Attitudes towards cannabis businesses have changed drastically over the past few years. Even though cannabis startups looking to cash in on the new green rush are more accepted and less stigmatized as of late, they still face hurdles and challenges that companies in most other industries would not.
Despite the victories of cannabis activists and the successes of the industry proving that legal herb can be a viable part of certain state economies, most banks and private lenders still frown upon giving any type of loan to those startups. Many dispensaries and retail locations in Colorado still have to bank with, conduct transactions with, and pay their employees entirely with cash.
The great thing about a truly free market is that smart entrepreneurs identify customer needs and work to satisfy them for a mutually beneficial exchange. That’s exactly what is happening in the cannabis industry right now when it comes to financing startups. The marijuana industry-banking crisis might be hurting the big banks that would otherwise make money off of their loans; but it’s helping other consultants and lenders who are ready to help fund legal cannabis businesses. Such is the organic ebb and flow of economics.
Ten years ago, you’d have to go to a loan shark to fund a cannabis business. Nowadays, consulting firms like Simplified Capital offer completely legit and legal solutions to the problem of finding startup capital for cannabis businesses – for a consultation fee, of course. The consulting firm chooses from a list of hundreds of lending partners to find the right match for the cannapreneur. They also assist clients in more traditional industries. As an added bonus, the lender they connect you with they won’t break your legs for missing a loan payment. I wouldn’t recommend doing that, though.
According to Simplified Capital’s founder Phillip Stuart, his firm does not require cannabis entrepreneurs are in the R&D or even proof of concept stage of development in their business to get financing. This is quite different from many private investment firms.
“All potential clients need to have to work with Simplified Capital is an idea, good credit and the dedication to make their business work,” Stuart said in a recent press release.
With more and more innovative firms like this helping cannabis entrepreneurs with financing, the legal cannabis industry is only sure to reach its current projected estimate of $45 billion by the year 2020.