Can I get a small business loan for a dispensary?

[whats the score]

IIRC it costs around 100K to open up a shop. If I have 20 percent down and great credit, do you think banks will lend to me?

Sorry for the noob question. I am just starting my research here.

 

[dbcooper]

From what I can tell it's nearly impossible due to it being illegal. Know of a supplier in Co. that said the same, been awhile guess you could try. And before you say it's allowed in your state assuming your in the states , it's still illegal everywhere. Banks follow federal regulations

 

[whats the score]

Damn. Thanks.

Do you think the 100K figure I quoted is about right? I could maybe get 50K together, but more than that I couldn't do.

 

[praisehim.]

NO. Would YOU invest in a dispensary knowing theres so many risks ? lenders put risk and benefit into consideration. Their benefit would'nt be nearly enough.

you need private investors bro.

 

[dank.frank]

NO bank will give you funding if you tell them out right that you are attempting to build a business that has something to do cannabis. PERIOD.

I know this first hand from attempts to seek funding to bring to reality an idea of my own and it doesn't even apply implicitly to the MMJ field. It has other practical applications in a completely "legitimate" industry as well...however, the intention to share this with the medical community automatically makes me a red flag and a hazardous investment.

No bank I have found will give you such a loan...and I've been looking for about 1.5 years.

What you would be better of hunting, as I discovered...is the proper lawyer. A lawyer who knows the absolute limit of the law and how to work it in his/your advantage.

The first and foremost step before ANYONE should consider getting involved in the MMJ industry, is getting yourself a trusted, tried and true, attorney on your pay roll. (never forget, your money paid = your employee) Without him/her you are up the creek without a paddle no matter how well you plan. PERIOD.

Step #1 = RETAINER.


dank.Frank

 

[whats the score]

Fair.

I guess I'll have to start in delivery and build up for a while.

Thank you for your honesty.

 

[Abja Roots]

I think the delivery option is much more sensible. There seems to be much less regulations and restrictions on this. Hopefully this will allow you to stretch your funds. If you build a solid customer base, you might one day be able to flip it into an established dispensary. Finding a solid lawyer can't hurt in the pursuit of either of these options.

For the record I can see it costing upwards of 100-150k to get anything started. It will vary by area, but I'm sure there are all kinds of rules as to which spaces are acceptable, security, staff, background checks, and much more.

 

[PoopyTeaBags]

from what i know fifth third is the only bank that works with MMJ patients... dont mean theyd give you a loan though....

 

[dank.frank]

5/3rd literally held the door open for me to leave....

Maybe I'm not as good at presentation as I thought. The Zegna suit didn't even help.


dank.Frank

 

[PoopyTeaBags]

haha thats funny... just what i have heard though...

 

[Stoner4Life]

Here's my .02 on the matter:

in california statutes require that dispensaries operate as a nonprofit business, why would a bank lend to anyone who's prohibited from making a profit? Try convincing the banker that your clever business tactics will allow 'X' amount of profit and he/she'll assume you're making an end run around the laws which then enable LEO to enter and seize everything, including the banks equity.


it just ain't gonna happen.......

 

[PoopyTeaBags]

Here's my .02 on the matter:

in california statutes require that dispensaries operate as a nonprofit business, why would a bank lend to anyone who's prohibited from making a profit? Try convincing the banker that your clever business tactics will allow 'X' amount of profit and he/she'll assume you're making an end run around the laws which then enable LEO to enter and seize everything, including the banks equity.


it just ain't gonna happen.......

Blue cross blue shield is a multi million dollar non profit... i bet banks would lend to them...

also theres a difference from non profits... and not for profit companies...i do beleive alot of cali companies are not for profit... not non profit.

 

[Marick23]

Hey Score, all the above advice is good to listen to. Especially the lawyer on retainer. If your growing anything make sure you have a lawyer. I can't stand my lawyer. Hated him 2 minutes after I met him. Thats why he's still my lawyer. Remember when it comes to the judicial system, you want the biggest prick you can find to fight off all the other pricks.


As far as getting a loan for a dispensary. Seeing that you have already tossed the idea just from a few pieces of advice. Probably not going to happen. Just because someone hasn't gotten a loan for a dispensary before doesn't mean that it can't be done. Has anyone tried applying for a loan for an alternative healing center. Play up the acupuncture and healing salts. Don't mention the MMJ. Run your holistic healing center. Then start your dispensary. Keep them seperate. Lease out space in your holistic healing center to your dispensary. (then you can charge your self whatever you want for rent and still stay not for profit)


Theres always a way. You just haven't found it yet. Just because someone on IC hasn't done it yet, doesn't mean it can't be done. Banks aren't the only source of loans. Angel networks, credit unions, private investors....

One things for certain. Your never going to get a loan if you don't apply.

 

[Abja Roots]

The above advice is sound. However anyone who has applied for a loan recently, even for a home, realizes how much more stringent the banks have become about lending. Even established business' are having a tough time securing lines of credit. It's not to say that it can't be done, but have no doubt that there are going to be a huge amount of hurdles to clear.

No way in hell a credit union is going to finance this. Your best bet is private investors.

A lot of it will depend on your track record, and your ability to prove that you can make this happen. Just the application fee can be over 10K, which is nonrefundable, regardless of whether or not you get approved for your dispensary permit. The people I've seen approved have had successful careers in other fields, and have almost all been self financed.

 

[Tudo]

No




And it can be done with a lot less so do it yourself

 

[GMT]

If you are 100% sure that you will be able to cover the cost of the loan, instead of looking for a business loan, you can apply for a personal loan. This depends on your current occupation and income rather than the potential Income from the business. Charities and non profit organisations may not pass profits to shareholders/founders, but they can retain surplus cash income and can pay employees what ever they want.

 

[LiudwigXIX]

I think in this case only those investors who are not associated with companies will help you