Hemp and cannabis business loans can have a lot of applications that make it possible for you to increase your profits and improve your branding. Are you thinking about starting or expanding a business in the cannabis industry? Consider how these four ways to use loans can help you find success.
Purchase Extraction Equipment to Make Oils, Tinctures, and Other Products
Many people use cannabis for health as well as enjoyment. Even recreational cannabis consumers may turn to products for relief from pain or anxiety. For some of these consumers, smoking cannabis or hemp flowers seems counter-intuitive to health. They might worry about harsh smoke that burns their throats or irritates their lungs.
Cannabis extractions, such as oils and tinctures, give people ways to benefit from cannabis without smoking flowers. Many market researchers expect the demand for cannabis extractions to grow considerably over the next few years.
Commercial hydrocarbon extraction systems can cost tens of thousands of dollars. A cannabis business loan makes it possible for you to purchase extraction equipment that puts you in control of your products.
Making your own extracts also helps you reap more financial benefits from products. You can sell your plant materials to a company that will extract chemical compounds. In fact, plenty of cultivators make good money selling plant materials to extraction specialists. But, you can potentially increase your profits by making the extracts yourself and selling them directly to retail stores.
If you don’t have enough cash on hand, a 420 business loan makes extraction systems affordable.
Open a Turnkey Store to Reach More Customers
The thought of opening another storefront for your cannabis business might sound like a challenging process. Even the most cannabis-friendly states have complicated laws, regulations, and licenses. Simply getting approval can take years in some places.
A turnkey solution will cost more, but it lets you connect with more customers quickly.
Depending on your area, you can expect to spend about $500,000 on a turnkey licensed store for recreational cannabis. (You can explore specific retail opportunities at 420 Property to get details on buying a turnkey solution in your region.)
Sure, that’s a considerable investment. You will probably spend more money on a licensed, turnkey store than starting a new retail store from the ground up. Eliminating the headache of licensing, equipping a new location, and other steps becomes much easier when you have access to cannabis business loans.
When you borrow money, you can start generating revenues quickly. Plus, you get to start building a reputation in your new community immediately.
Expand or Upgrade Your Grow Operation to Produce More Cannabis
It makes sense for new cannabis cultivation businesses to start small. A small space limits the amount of money you spend on real estate, equipment, and supplies while you optimize your growing process.
Once you perfect your cultivation process, you might want to move into a larger space that lets you produce more cannabis.
Cultivating more cannabis in a larger space often involves spending a lot more money on real estate. You can also expect higher expenses for your utilities, equipment, and inputs. You have to expand your operations to make more money, though.
Showing a lender that you already have a successful – although small – cannabis grow operation could increase your chance of getting a loan with a low interest rate. You have proven that you know how to run a business, hire experienced professionals, and connect with distributors that want to buy your products. All of these factors make you look like a low-risk borrower.
Offer Delivery Services to Expand Your Customer Reach
If you have a storefront in a state that allows cannabis delivery, you have a remarkable opportunity to reach more customers and grow your revenues.
Starting a delivery service isn’t necessarily as easy as it might seem, though. You will need responsible drivers with clean records, vehicles that will not attract attention, and insurance policies that cover business use. Delivery isn’t the most expensive part of running a dispensary. Still, it certainly costs enough that you might not have enough cash on hand to pay for it – especially when you have a lot of your money dedicated to inventory.
Getting a cannabis business loan for delivery services lets you start growing your operation without redirecting the funds you need to keep your shelves stocked.
You may want to start out with one or two vehicles, in which case you don’t need to borrow a tremendous amount of money. Eventually, though, you could want to grow your fleet to serve customers in a densely populated urban area.
Delivery is a lucrative service, but you will need the money to get started. Loans open the door to growth.
Find a Cannabis Business Loan That Matches Your Needs
You probably already know that the banking industry doesn’t like working with the cannabis industry. Unfortunately, they have to follow federal laws. According to federal law, cannabis is a schedule 1 drug without medical applications.
The majority of people know that the federal government has an inaccurate position. Still, banks can’t fight back without facing legal issues.
A private lender can step in to help you meet your cannabis business goals. Instead of waiting to accumulate the money you need to start or expand your business, get a loan that funds your business plan.
Fill out a business loan application from Canna Business Resources so we can help you explore your options to get affordable funding that leads to business success.