Since more states are legalizing marijuana every year, it seems like funding options would be great. This is false, due to many reasons. Even though more and more companies are in need, regulations put a halt on who can lend to legalized marijuana businesses. The Feds, namely, have caused major issues by not lowering or deleting the illegalization and drug schedule of marijuana, making it pretty much impossible to obtain any funding from a bank. This leaves you with few options, and some are better than others.
At the end of 2016, 25 states and the District of Columbia will offer up either medical marijuana and/or legalized marijuana for recreational usage. An estimated 100,000 Americans will have a medical marijuana card to access the drugs in a legal dispensary for medical issues. With these numbers – which will obviously grow – funding shouldn’t be hard to find, but it is. You can make a lot of money in these legalized fields, but since legalization is done by the voters and the states, and not the Feds, banks are not going to dole out any funds, because the banks are overseen by the Feds – which deems marijuana in any use illegal. It can become complicated quickly, but there are alternative funding solutions available.
Crowdsourcing is the hot guy on the market when it comes to funding high risk companies, or pretty much any small business in America. It works like this: You post a social media campaign, talking about your company, and why you need the funds. Social media friends, fans, and those who see the postings can donate funds to your cause. The problem is that you are not guaranteed any funding. This can leave you without anything, and with time wasted on making the campaign.
A better solution – and one that is time-tested – is a cash advance from a merchant account provider. While there are certain criteria that you must make, the criteria is lenient compared to a bank loan. FICO scores under 500 are allowed, for example. With this process, the funds are deposited into your merchant account for your usage. When it comes time to pay the funds back, the process is simple: A small amount is taken from each credit card sale you make. That’s it. Simple as that.
With the boom in states that allow medical and recreational marijuana, businesses are looking for extra funds. But the search is tough and long for many. The first – and typically only – place you need to look is to your merchant account provider for help.