How To Get A Cannabis Business Loan For Your Dispensary

Medical and recreational marijuana has been legalized in states across the nation, but it is still illegal under federal law. These laws make it more difficult for owners of cannabis dispensaries to receive traditional funding to cover operating expenses or to scale their businesses.

Even though financing may be limited, it is possible to get a cannabis loan for your existing dispensary or startup business. Find out what funding options are available in this high-risk industry and how to get funds for your business.

Why Are Cannabis Business Loans Different From Other Types Of Business Funding?

Finding funding for any business is no easy task, but it’s even more difficult to find capital for a marijuana dispensary. In addition to finding a lender with the best rates and terms, navigating the application and underwriting process, gathering documentation, and waiting for weeks to receive their funds, dispensary owners also face additional challenges.

Federal Laws Against Marijuana

Even though more states are legalizing marijuana, it remains illegal under federal law. Most lenders want to avoid the potential legal repercussions of working with businesses in the cannabis industry, as these businesses are considered high-risk.

Even checking accounts, savings accounts, and payment processing for cannabis dispensaries is a hassle, while receiving financing through traditional lenders is nearly impossible.

Additional Costs For Dispensaries

If you do find a financial institution that will allow you to open accounts, there are many associated costs, including fees for background checks and for regular reports to the Treasury Department’s Financial Crimes Enforcement Network.

These costs (as well as ordinary operating expenses) pile up quickly, but due to legal issues, traditional financing is often not an option. Therefore, cannabis dispensaries either have to make enough capital on their own to keep the business moving forward, or these business owners have to seek out other means of financing.

Can I Get A Cannabis Loan From A Bank?

Banks are insured by the Federal Deposit Insurance Corporation. A bank that works with companies that violate federal law risks regulatory scrutiny and potential enforcement action, which is why most FDIC-insured banks avoid the cannabis industry entirely.

There are also potential legal issues that banks face when working with cannabis businesses. A bank could potentially be charged with money laundering for accepting deposits from a marijuana dispensary. Although the odds of this law being enforced are slim, lenders don’t want to take that risk.

For those reasons, most banks will not loan money to businesses in the cannabis industry.

Some state-chartered banks and credit unions in states where cannabis is legal do offer limited banking services and occasionally financing to cannabis businesses, though this varies significantly by state and institution.

Can Dispensaries Get SBA Loans?

Business owners who don’t qualify for traditional bank loans may qualify for Small Business Administration (SBA) loans.

Unfortunately, businesses in the cannabis industry are unable to take advantage of these low-interest, long-term loans. The SBA has reaffirmed and strengthened its policy prohibiting cannabis businesses from accessing 7(a) and 504 loan programs, with updated guidance effective June 1, 2025, explicitly reinstating restrictions on businesses with operations related to marijuana, hemp, and CBD.

The SBA’s restrictions extend beyond direct cannabis businesses. Ancillary businesses that derive revenue from or supply services to marijuana operators may also be ineligible, and lenders often take a cautious approach since the burden of compliance falls on them

Though this news may be understandably frustrating if you’re seeking an affordable loan, there are financing options available to you. You just won’t find them at a bank or through the SBA.

The Best Cannabis Loans For Dispensaries

Alternative lenders have made it possible for dispensaries and other businesses in the cannabis industry to obtain funding. While rates and terms may not be as favorable as traditional financing, solid revenues and a high credit score can help you score affordable loans to fund operations or expansion of your business.

Here’s a breakdown of loan options that may be available through alternative lenders.

Alternative Funding Sources For Dispensaries & Cannabis Businesses

If you own or plan to open a dispensary, sometimes you have to get a little creative when it comes to funding. Look beyond the more traditional sources of funding and consider raising capital through one of these methods.

How To Apply For A Cannabis Loan

Ready to get the funding you need for your cannabis business? Here’s what you need to know before you submit loan applications.

Choose The Type Of Loan You Need For Your Business

Before applying for funding, you’ll need to determine what type of loan you need. Start by deciding how funds will be used. If you need a flexible option that gives you access to cash as needed, consider applying for a line of credit or business credit card. If you need a specific amount to cover an expense, short-term loans, MCAs, or personal loans for business may be what you need. Don’t forget to consider alternative funding sources like crowdfunding.

Your credit score may impact your ability to receive certain loans, so make sure to pull your free credit score online to make sure you qualify.

Decide How Much Money To Borrow For Your Business

You’ll also need to determine how much money you need for your business. If you operate an existing business, you can research costs online, get quotes and estimates from vendors, or use your payroll and financial records to calculate how much extra capital you need.

If you’re seeking a startup loan to launch a dispensary or cannabis business, estimating costs can be a little trickier.

Research Cannabis Lenders

Many lenders have restrictions on lending to dispensaries. Before applying, make sure that you choose a lender that offers high-risk loans to businesses in the cannabis industry.

Gather Your Documentation For A Cannabis Loan

Documentation and information requirements vary by lender and the type of loan you choose. In general, expect to provide:

• Personal information including your Social Security number & contact information
• Business information including your business address & federal tax ID
• Business licenses & permits
• Business & personal bank statements
• Financial documents including P&L statements, income statements, & balance sheets
• Business plan

Fill Out & Submit Loan Applications

Once you’ve completed the previous steps, you’re ready to complete and submit applications to lenders. Make sure that all forms are filled out correctly and that you keep in touch with your lender throughout the process to speed up funding. Don’t forget to read your contracts carefully and compare your options whenever possible to ensure you get the best loan for your cannabis business.