Cannabis Entrepreneurs Are Licensed, Growing, and Undercapitalized: Here’s How Private Lending Is Filling the Gap
The U.S. cannabis industry is booming — with projections topping $40 billion in annual sales by 2028. But if you talk to the entrepreneurs on the ground, a different picture emerges.
Despite legalization in over half the country, most cannabis operators are locked out of traditional funding. Banks, credit unions, and even some private institutions are hesitant or outright unwilling to lend, citing federal restrictions, regulatory risk, or compliance concerns.
And yet, the cost to launch or grow a cannabis business is massive — often reaching $250K to $2M+, long before a single dollar of revenue comes in.
So how are successful operators funding their growth?
The answer: private lending, including hard money loans, bridge loans, and asset-based capital tailored specifically for the cannabis sector.
Why Cannabis Businesses Struggle to Get Funding
Even with state licenses in hand, cannabis business owners face a unique set of obstacles when seeking capital:
Federal illegality: Because cannabis remains illegal at the federal level, traditional banks avoid the industry to protect their FDIC status.
No SBA access: Cannabis businesses can’t apply for SBA loans, even if they’re legally operating in a state-compliant market.
Complex compliance: Financial institutions must comply with FINCEN guidelines and conduct extensive due diligence, which many aren’t willing to do.
Underwriting bias: Even when banks do lend, they often offer worse terms, demand full collateralization, or outright reject cannabis-related applications.
This leaves even well-run, licensed businesses in a difficult position: legit in the eyes of the state — but unbankable in the eyes of lenders.
The Real Cost of Starting and Scaling a Cannabis Business
Operators in the cannabis space need substantial capital — not just to launch, but to survive long enough to turn a profit.
Typical upfront costs include:
Licensing and legal fees: Can range from $10K to $250K+, depending on state and license type
Real estate acquisition or leasehold improvements
Facility build-outs: HVAC, lighting, security systems, and grow equipment
Inventory and packaging: Especially for vertically integrated operations
Staffing and payroll: Hiring before revenue kicks in is common
Marketing and compliance systems
It’s not uncommon for operators to burn through $500K to $1M before they make their first sale — especially in cultivation or manufacturing.
How Private Lending Fills the Cannabis Capital Gap
Private lenders — particularly those specializing in hard money loans for cannabis businesses — are stepping in where banks won’t.
At HMMB Funder, for example, we focus on funding strategies that are:
Fast
Flexible
Secured by real assets (property, equipment, etc.)
Here’s how private lending supports cannabis operators:
Hard Money Real Estate Loans
Need to acquire or refinance a dispensary, grow house, or warehouse? Hard money loans allow operators to leverage real estate, even if traditional lenders won’t touch the deal.Bridge Loans
When you're waiting on a license approval, a round of investment, or a delayed supplier — bridge loans provide crucial short-term funding.Fix-and-Flip Capital for Property Improvements
Renovating or repurposing real estate for cannabis operations? Private funding can help cover tenant improvements, build-outs, and code upgrades.Asset-Based Lending
Operators with valuable equipment or property on hand can access funding based on their collateral value, not just credit history or cash flow.
Why Cannabis Entrepreneurs Choose Private Lenders Like HMMB
It’s not just about getting a loan — it’s about working with someone who understands the unique risks and timeline of the cannabis space.
At HMMB Funder LLC, we help cannabis entrepreneurs by:
Evaluating deals based on the asset, not just financials
Closing fast — sometimes in as little as 7–10 days
Lending in cannabis-friendly states like California, Colorado, Michigan, Florida, and New York
Partnering with real estate investors, builders, and operators in the cannabis industry
Our team has deep experience working with borrowers across high-risk, high-growth industries — including cannabis.
The Bottom Line: You’re Licensed. Now Get Funded.
The cannabis industry may be growing fast, but many of its operators are undercapitalized and overlooked.
If you’re struggling to get funded for a licensed grow operation, dispensary, or cannabis-related business — you’re not alone. And you don’t need to wait for banks to catch up.
HMMB Funder helps cannabis operators secure private capital to fund real estate, cover startup costs, and bridge cash flow gaps — fast.
Ready to talk? Let’s explore funding strategies tailored to your business.
