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What You Need to Know About Cannabis Banking

Cannabis is a medicinal plant that is used for various conditions. Although, cannabis does not have a great history with the authorities. However, upon legalization, people are beginning to warm up to cannabis, especially after experiencing its effects firsthand by most people. 

With the legalization of cannabis come many benefits for the users. However, legal cannabis dealers are still trying to get the hang of things, from the influx and growth of customers to Heavy licensing fees and securing loans for their business. 

Although medical marijuana is now legalized, most banks are still reluctant to approve CBD merchant accounts. So merchants should employ hemp merchant credit card payment solutions and cannabis banking services

Although cannabis has been legalized, getting funding for this business is still a big issue to contend with, as different bank and government policies make it difficult to get bank accounts and talk less of securing bank loans to boost or start up their businesses. 

Cannabis banking 

Banks and government policy makes it difficult for cannabis merchant to get bank accounts and loans. However, that’s not the end of the road for cannabis farmers, as there are methods by which cannabis merchants can get proper funding for their businesses. 

These methods include; 

Debt funding

Debt funding is taking out a loan on which you will pay interest and finally repay the lender. Using a credit card to acquire goods or as working capital is also considered debt funding because you must repay the line of credit.

With debt funding, you can secure the loan you need to boost your business or use it as a startup while working up your way on the food chain to earn more to pay off the loan and gain more capital to stay in business. 

Equity funding 

The practice of trading shares of your company for funds is known as equity fundraising. This sort of cannabis company finance is more difficult for young enterprises since they cannot establish their profitability. It means they will have to work more to demonstrate that they are worthy of another entity’s investment.

For a cannabis merchant to enjoy this kind of loan, it is best to have an established enterprise, as you need to have a huge customer base and a fixed profit range to make this work for you. 

Business loans 

Business loans are a major lifesaver for cannabis merchants; this allows them to get the required capital they need to start or boost their businesses. Since bank policy restrict cannabis merchants from getting loans from banks, business loan and other financial options are what is left on the table, and some of these loans include; 

Business loan option 

While not every bank will approve you for a small business loan, you may be able to get one through a credit union or a bank that promotes its readiness to cooperate with the marijuana sector. 

Some banks are not afraid to be affiliated with the marijuana sector; with banks like this, you stand a higher chance of securing a business loan. 

Private loans

If you cannot secure a business loan from a bank, there are still different options on the table. One such option is the private loan. You can secure private loans by contacting reliable lenders and applying for a loan. 

Private lenders often offer short-term loans ranging from a month to three years, pick what’s best for you and gradually pay back.  

Family loans 

Family loans are easier to get as a result of familiarity with your family members. Before approaching banks or lending organizations, it is advisable to go to family first. 

Commercial real estate loans 

If fortune smiles on you and you get a commercial real estate loan, consider yourself very lucky. This loan can get you the capital you need to purchase your dispensary and the equipment you will need to start your own business. 

Equipment Financing

This loan can cover the cost of the purchase or the lease of the equipment you will need to expand your business. 


Government and bank policy may not always favor cannabis merchants; however, with the points highlighted above, you can still get the required funding to grow your business.

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