
What you need to know: Cannabis Real Estate Financing

by Ashley Martin
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Guidelines to Cannabis Real Estate Funding
The cannabis industry is relatively new but can be a very lucrative business. Currently marijuana has been legalized for recreational use in 11 states and for medical purposes in 35 states. To start up in the cannabis industry you will need real estate to grow, process and sell your product; and in order to be licensed you will need properly zoned cannabis real estate or in a green zone. The strict guidelines and restrictions depend on the state, district, and zone of your cannabis property.
Federal banks and credit unions cannot offer loans and services for commercial cannabis real estate because marijuana is still considered a federal illegal controlled substance. This has left a booming market open to private lenders and local credit unions that are not subject to the same federal regulations.
Recreational + Medicinal

Your cannabis business can apply for a cannabis real estate loan for recreational or medicinal facilities as long as it falls within the laws of that particular state and district. There are loan options available to finance farming, manufacturing, and for dispensary locations. You will want to look into term loans and debt financing with alternative lenders for commercial cannabis real estate.
Many alternative lenders offer equipment loans for cannabis processing and growing equipment. Cannabis businesses can use these loans for any equipment that is necessary for growing marijuana and processing cannabis infused products. It is a process that requires particular growing conditions and extraction equipment. You will need temperature regulators, proper lighting, CO2 extractors and water systems. Upwise capital offer non-dilutive working capital for cannabis operators and marijuana related businesses.
Cannabis Lenders
The cannabis industry is not always viewed as a reputable industry and sometimes lenders will place strict and hard to meet regulations for borrowers. Lenders are also reluctant to make long term commitments with borrowers because marijuana laws and regulations are constantly changing. A cannabis real estate loan is usually secured by assets, meaning your property will act as collateral.
Lenders will have your property appraised to determine its value. Other business assets may also be used such as equipment and inventory. This can be good for start- up companies because revenue and credit are not the determining factor for a cannabis real estate loan. But because you need to secure a property to qualify, you will have to have upfront capital and may be asked to have the property appraised. Upwise will ensure the property is appraised at cannabis value by appraisers that have experienced appraising marijuana related businesses and properties.
What Cannabis Lenders Look For
Upwise Capital will typically lend 65 % LTV or 70% LTC depending on the use of funds and collateral used for due diligence. Underwriting will also review your personal and business credit history, personal financial statement of the sponsors, capital stack, equity raised, assets and outstanding debts. They will want to see a solid business plan, hard and soft costs, project budget, proforma, and projections. To qualify you will need to provide all the required cannabis licenses for the cannabis facility at hand. Typically, the borrower will also provide information on business partners, executive summary, customer off take agreements, purchase orders and products intended to be sold – if applicable.
Upwise vs Other Lenders
Upwise Capital differs from most lenders in the cannabis capital market because we lend 65% LTV based on cannabis valuation and lease comps in that specific state. We forward to helping you with your cannabis real estate financing needs. Your cannabis loan would be secured with a building, real estate, land, or equipment. Ideally, we are looking for facility’s with HVAC systems, walls, and a slab concrete floor. Purchase Orders, account receivables, equipment, crops, inventory, and EBITDA may also be considered when underwriting a file. Upwise Capital offers loans from 150K up to 200 million for terms ranging between 1 to 15 years for cannabis real estate loans. The interest rates can vary between 9 – 17 percent depending on experience, proforma, projections, and other factors. Upwise Capital promises a speedy process and borrowers can receive real estate financing up to $200 Million in as fast as two weeks and unsecured working capital loans up to $10 Million in as fast as two business days.

How to Apply for Cannabis Real Estate Loans
Real estate for your cannabis business can be considered one of the largest purchases a business owner makes in the life cycle of their business. If you plan your business finances well, the right piece of property should bring in a lot more revenue for your business and be worth the interest for the loan.
Our cannabis financing team at Upwise Capital is here to assist you with every step of the way to secure whatever assets is needed to help your business grow. If you have any questions regarding how equipment financing works, please call our team at 77-55-UPWISE or email [email protected]. You can also apply online for equipment financing, so you can get back to work and running your business.
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