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Compare cannabis financing in New Jersey

It's now legal to grow, manufacture and sell in the state — but federal laws limit financing.

The New Jersey Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Act has opened up recreational use of cannabis throughout the state. But as municipalities work to establish their own regulations and federal law continues to restrict funding, you may find it difficult to get financing. Select your annual revenue, credit score and time in business to find business loan options available to you.
Name Product Filter Values Loan amount APR Requirements
Lendio business loans
Finder Rating: 4.75 / 5: ★★★★★
Lendio business loans
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 300 legit business lenders.
National Funding business loans
Finder Rating: 4.75 / 5: ★★★★★
National Funding business loans
$5,000 – $500,000
4% to 8%
Be in business at least one year and make at least $150,000 in annual sales. Other loan types have additional requirements.
Working capital loans and equipment financing, some high-risk industries may be eligible.
ROK Financial business loans
Finder Rating: 4.7 / 5: ★★★★★
ROK Financial business loans
$10,000 – $5,000,000
Starting at 6%
Eligibility criteria 3+ months in business, $15,000+ in monthly gross sales or $180,000+ in annual sales
A connection service for all types of businesses — even startups.
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7 types of cannabis financing available

Unfortunately, the Controlled Substances Act still influences your financing options in New Jersey, even with recreational cannabis legalization. You do have options, but they're limited and may be more expensive because of the high risk associated with the cannabis industry.

Term loans

Term loans are the traditional option for most businesses. They can cover working capital, inventory and other expenses. But for cannabis-based businesses, it may be more difficult — and sometimes impossible — to obtain funding from a bank or credit union due to federal regulations.

There are some lenders, like Diamond Business Loans, that offer term loans to businesses in the cannabis industry. However, the amount your business can borrow is limited, and you may face a high origination fee.

Startup loans

Startup loans are typically only available to businesses that have been in business for at least six months and meet a minimum annual or monthly revenue set by the lender. This means that many new businesses in New Jersey won't qualify, despite being startups.

But as licenses open up and cannabis-based businesses become more established in the state, you may be able to snag a loan. Just keep in mind that, like term loans, your options will be limited because of federal laws.

Equipment loans

Equipment loans are used to purchase expensive items, which serve as collateral for the loan. These are structured like term loans, but typically have lower interest rates. While they can be found for any type of equipment, you may still have trouble finding financing — even if the equipment isn't for the production or sale of cannabis.

Check local sellers to see what in-house financing they offer. Because medical marijuana has been legal in New Jersey for years, you may also be able to find used equipment at a more affordable price.

Inventory loans

Like equipment loans, inventory loans can use the inventory you buy as collateral. These are generally short-term loans that require weekly or even daily repayments, but you can also find term loans and lines of credit to finance your inventory.

For businesses that sell cannabis and related products, inventory loans can be used to purchase seeds, plants and other supplies. There may be in-house financing or payment plans available as well, but it'll depend on the supplier.

Commercial vehicle loans or leases

Commercial vehicle loans are useful for businesses involved in the transport of cannabis either between businesses or directly to consumers. Again, financing is limited because of federal laws. But some dealerships in your area that work with local lenders could have specialized options for your business.

Commercial real estate

Commercial real estate loans can be used for leasing or buying property for your business. This includes land for growing cannabis, greenhouses, storefronts and office space.

Because each municipality in New Jersey will set its own restrictions on where cannabis can be grown or sold, it's unlikely that you'll immediately be able to borrow a loan for commercial real estate. But as regulations are set, more financing options should open up to support your business.

Cannabis financing restrictions in New Jersey

Beyond federal regulations and limited financing options, there aren't many specific restrictions in New Jersey. State law has set a transitional phase to determine the amount of licenses and operation of cannabis businesses within each municipality.

Each municipality can determine the location and business hours within its jurisdiction. However, only the Cannabis Regulatory Commission can set the time of operation for delivery services. A municipality can also choose to pass an ordinance to prohibit cannabis-based businesses of one or more classes within the first 180 days after the bill's enactment.

Bank lending for cannabis businesses in New Jersey

Federal law still plays a large role in what banks can and can't do when it comes to controlled substances like cannabis. In particular, the Money Laundering Control Act regulates how revenue made by a cannabis-based business is used. Many banks consider the risk of violating federal law too high and won't offer services to any business involved in cannabis.

But this largely affects only federal banks and credit unions. Local, state-based options may be more flexible — although they still need to abide by federal laws.

The SAFE Banking Act first introduced in 2019, has recently been reintroduced. If passed, it would allow financial institutions like banks and national lenders to work with businesses in states where cannabis has been legalized. This could open up a large variety of options for the industry, so keep an eye on its progress as the cannabis industry expands in New Jersey.

Cannabis business license requirements

New Jersey is in the process of establishing six types of licenses for the cultivation, manufacture, sale and delivery of cannabis products in the state. New businesses won't be able to hold multiple classes of licenses during the first 24 months after the bill's enactment.

Class 1: Cannabis Cultivator

Growing and cultivating cannabis

Class 2: Cannabis Manufacturer

Manufacturing, preparing and packaging of cannabis items

Class 3: Cannabis Wholesaler

Obtaining and selling cannabis items for resale to other licensed businesses

Class 3: Cannabis Wholesaler

Obtaining and selling cannabis items for resale to other licensed businesses

Class 4: Cannabis Distributor

Transporting cannabis plants or items in bulk between licensed businesses

Class 5: Cannabis Retailer

Selling cannabis items and supplies to consumers at a retail location

Class 6: Cannabis Delivery

Transporting cannabis products to consumers

To qualify for a license, each person with investment interest in the business must be at least 21 years old and must pass a criminal history background check. The criminal history background check doesn't include any prior convictions for the distribution or simple possession of marijuana or hashish — provided at least five years have passed since the conviction or completion of parole or imprisonment.

For the first two years, the number of licenses issued to businesses in each class will be limited. Priority will be given to businesses located in certain zones: Areas of New Jersey that have been negatively impacted by the criminalization of cannabis.

Priority for licenses will also be given to minority-owned businesses, woman-owned businesses and businesses owned by veterans with disabilities. At least 25% of the overall licenses issued will be to microbusinesses owned by New Jersey residents with less than 10 employees.

Businesses must also apply separately for an endorsement to operate an indoor or outdoor consumption area on the premises.

Fees

The Cannabis Regulatory Commission hasn't provided a list of licensing or business establishment fees in the act. Because licenses are limited for the first two years, you'll need to contact the commission to learn about the full cost of opening a cannabis-based business in New Jersey.

Bottom line

New Jersey's recent recreational cannabis law opens up new opportunities for businesses, especially minority-owned businesses in areas that have been historically impacted by cannabis criminalization. And while federal law still limits your options, you can compare the best business loans for cannabis to start financing your venture.

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