breaking news Guide to Commercial Cannabis Lenders in New Jersey • Benzinga

Becoming one of the fastest growing sectors of the New Jersey economy, the cannabis industry brought in nearly $80 million in its first quarter of recreational sales. With New Jersey slowly issuing more commercial cannabis licenses, new businesses face a minimum start-up cost of nearly $50,000, while being barred from most financing options.

Signed in 2021, the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization (CREAMM) Act legalized the sale and recreational use of cannabis for adults 21 or older. Previously, cannabis was only legally available for medical purposes under the Medical Marijuana Use Act signed in 2010.

Priority applications

Due to the large number of cannabis-related convictions in some communities and to increase the diversity of business owners, New Jersey has launched priority applications. Priority applications allow minorities, women, disabled veterans, and people with cannabis convictions to be given priority in starting cannabis businesses.

Three types of cannabis businesses are given priority review – diversely-owned businesses, social equity businesses, and impact zone businesses. Although not guaranteed to be approved, these three types of businesses are first in line for a cannabis license in New Jersey.

Types of Cannabis Loans

Due to the cannabis industry’s multifaceted ecosystem, business owners can access a wide range of loan types ranging from agriculture to lab. This article explores some of the most common loan options for cannabis products and businesses.

Home loans

Almost every business will need real estate, whether to grow, store, or sell cannabis products. The types of business operations you have will determine the type of real estate you will need, which can cost anywhere from $100 per square foot to $400 per square foot in New Jersey.

Equipment loan options

Since cannabis businesses have multiple functions, the equipment needed to support these uses can be expensive. Equipment loans would be more helpful to New Jersey licensed cannabis processors, extractors and testers for their labs. Equipment loans can cover items such as extraction lines, packaging and bottling equipment, and laboratory equipment.

Unsecured business loans

For purposes not included in these categories, an unsecured business loan can be used for business purposes.

Working capital financing

Intended to act as a stopgap for short-term fluctuations in cash flow, working capital financing can benefit any type of cannabis-related business, but is generally not available to startups.

Private Loans and Other Funding Sources for Marijuana Businesses

Due to the need for cannabis-related financing, more private lenders are specifically catering to the cannabis industry with loan options designed specifically for marijuana-related businesses (MRBs).

Is it important to find a cannabis-friendly lender?

Since MRBs are excluded from major banks and major credit card processors, financing can be complex. Using a cannabis-friendly lender allows you to avoid the bureaucracy of an industry that is already notoriously difficult to break into. It is essential to find lenders that focus specifically on the cannabis industry and to understand the different types of loans that will be needed for your MRB.

Finding the Best Commercial Cannabis Lenders in New Jersey

The right cannabis lender doesn’t just have the money you need – they understand the industry and what someone needs to get started in it.

Type of loan options

When choosing a cannabis lender in New Jersey, the types of loans offered are just as important as the amount available. Loans such as real estate, leasebacks, equipment, unsecured commercial loans and working capital loans.

Interest rate

Interest rates for cannabis-related businesses can be up to three times higher than their non-MRB counterparts. Most interest rates are typically 15% to 18%, but lenders start as low as 8%. With all the fees associated with creating and selling cannabis products, having the lowest interest rate you can find is essential.

Funding speed

With the costs of starting up an MRB, the expanding metropolitan New Jersey economy, and limited retail opportunities for cannabis businesses, speed of funding is critical. Cannabis expert lenders can offer working capital loans in just one week and home loans in 3-4 weeks.

Work with cannabis experts

It’s important to work with expert cannabis lenders who are focused on the industry, as they can structure your financing to meet your needs. Proven lenders will also protect you against borrowing mistakes by taking an insightful look at your business.

Proof of successful funding

One of the main reasons to use a cannabis-focused lender is to know that they are successful in your specific cannabis industry secretariat. Successful financing is the only way to retain ownership of your business without having to free up equity.

Looking for a cannabis loan in New Jersey?

Seed to Sale has funded $85 million in loans since its inception in 2019 across all sectors of the cannabis industry. As one of New Jersey’s premier commercial cannabis lenders, Seed to Sale has over 100 years of combined expertise, highly competitive rates and excellent terms. With a proven track record and vast knowledge of loans for cannabis products, Seed to Sale can be the right lender for your cannabis business.

Frequently Asked Questions

questions and answers


Is marijuana legal in New Jersey?


Yes. Medical marijuana was legalized in 2010 and recreational use was legalized in 2021.


Do New Jersey financial institutions lend money to marijuana businesses?


Most banks are legally or corporately prohibited from lending to Marijuana Related Businesses (MBR).


What are some common challenges you face running a cannabis business?


One of the biggest difficulties in running a cannabis business is the constraint imposed by many financial institutions. Most marijuana-related businesses only sell cash, as VISA, Mastercard, and many banks shun the cannabis industry.


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