- August 24, 2020
- Posted by: Shane Dwyer
- Category: Medical Marijuana News
You might be considering starting your own cannabis business, you probably have seen profitable it can be if ran correctly. Cannabis is one of the most profiting business’s out there right now and it is only going to get more profitable as more states start legalizing marijuana. But starting a cannabis business is not all that easy and could require a good amount of paperwork. The reason why is that the government is still very strict when it comes to cannabis. After all, they only legalized it a few years ago, and some states still have it illegal to this day.
We’re going to look at what you need in order to get a cannabis business loan for the state of California. We recommend that you check with your local state laws as to some laws are different between states.
When looking to get a cannabis business loan, We recommend that you do your research. Your going to want to do this in an orderly fashion so you do not miss anything and make the process harder than it is
Let’s explore what steps you need to take before you apply for cannabis business loans.
- Create a work plan- You are going to want to create a solid work plan. It should be about a 5 step plan including
1 Create your vision and goal- you are going to want to define what your business is going to be. Be sure that it is a strong and solid vision and goal.
Selecting the right property- Start looking for where you are going to operate your business the best idea is to make sure that you feel good about the place and that it fits with you. Do not rush in the process. Having the right space that you feel comfortable about is extremely important.
3. Create operations and standards- This is going to be where you plan how your business operates and the morals that your business holds. A good successful business always has good morals.
4.Financial and tax compliance- Make sure that you are financially prepared to take this task on and are able to pay the taxes that are required, you do not want to fall back on your taxes that can cause a lot of other mess in the future.
5. Crate work plan- This is where you will create your work plan and include all of this in it.
- Prepare site- This is where you will want to get all your documents together and start looking at the places that could possibly be your future site.
- Creating your business plan- Regulators are going to want to see some type of healthy business plan. You’re going to want to create a lasting vision that screams success Other wise your chances of getting approved could be significantly less. Some of the basics of a good business plan include
Financial projections- Having goals of what you want financially is important. You want to ensure that you are doing everything you can to make the most money.
Safety and security- You want to ensure that your work environment is safe and has the right amount of security. Most dispensaries are required to have some sort of security.
Licenses- You need to know what licenses are required and how long they all are active for be renewing them. You cannot let your licenses expire as that can get your business shut down and get you possibly fined a lot of money.
- Obtain state approvals- Now that yo have everything it is time for you to obtain state approvals this is the licensing part. You are probably going to be subjected to a background check.
- Apply for cannabis loan- You can now officially apply for a cannabis business loan Some of the things you are going to need are
Credit Score- Your lender is going to want to see that you have a healthy credit score, You check your credit report by accessing it through one of the major credit bureaus, or you bank can run one for you.. It is better that you check first so that you do not have an unnecessary inquiry on there. Banks and lenders usually feel comfortable above the 700 points of your credit score. You might need to work on your credit score a little bit before applying for a loan. Make sure that you pay all your bills on time and that you do not go over 30% of any credit card limits that you may have.
Bank Statements- Your lender is going to want to see how much money is coming in. That’s going to play a big part in their decision making of you getting approved for the loan or not. Yes, a good credit score is important but so is actually money. If you do not have a lot of money coming in or a lot of assets banks and lenders might not feel comfortable lending to you. It is best to have at least 6 months of bank statements with you. Bring statements from all your accounts and any stock market accounts that you might have. Again the more money you have the better your chances of getting approved.
Background report- A background check is going to most likely be required when applying for a cannabis business loan. As some federal requirements prevent certain people with criminal records from holding a cannabis license. It is best to check with a business lawyer about what is a disqualifying event. Nonetheless, a background check should be brought with you when applying for the loan.
Licenses- You are going to need to have licenses for cannabis operation prior to applying for your loan. The appropriate licenses basically tell the lender that you have been approved by the federal government to sell cannabis products. The licenses vary from what kind of sales you are looking to do