Is Cannabis Lending In Your Future?

Perhaps the most frequently asked question by growth-oriented lenders is "How and when can we lend into the rapidly growing and already major industry of legalized marijuana?"

The answer is: "It is not so simple."

It is estimated that U.S. sales of legal marijuana exceeded $15 billion in 2020 (up from about $10 billion in 2019), $2 billion of which came from Colorado alone. These numbers are projected to double by 2024. The legal marijuana industry is certainly escalating, but roadblocks remain making it difficult to lend to cannabis-related businesses.

Let's start with a review of the state of the law. There is a cacophony of state and federal laws, many of which are at odds with each other. As of this writing, medical marijuana is legal in 35 states and Washington, D.C., while 15 of these states plus Washington, D.C., have legalized adult-use (recreational) marijuana.