For much of the early history of the cannabis industry, cash was king: all sales and almost all business purchases had to be carried out mostly or entirely in cash. However, new laws, new regulations, new payment platforms, and new products have opened up the exchange of capital from buyer to seller, grower to distributor, and owner to vendor. Today, many pieces of cannabis business equipment can be financed instead of requiring cash upfront to be purchased.
HVAC equipment remains particularly expensive, a problem that scales with the amount of space that needs to be climate controlled. A grow-op may have an entire acre of plants that must be kept at the same temperature and humidity, necessitating a large heating/cooling solution. Luckily, this major expense can be directly financed: manufacturers will often provide a financing solution for larger products, while lenders are also willing to put up the cash for a major purchase and a repayment over time.
Just as plants must be grown at the correct temperatures, they must also be grown with the correct quality and quantity of light. In a tight market, competing for customers requires putting out the highest-quality product. Cannabis plants grown under a basic heat lamp are nowhere near as appealing as those grown under specialty lights. Blacklights and UV lights are able to get plants growing round the clock for faster production, higher quality, and greater density. These lights can be financed, luckily, since they are often purchased in bulk—and most growers will need a lot of bulbs for their crops.
For a small grower, all that is needed to produce oils is to grind the plants and collect the residue. To get far better oil (such as hash oil, THC oil, or CBD oils), however, an industrial grade CO2 extractor is necessary. This may legitimately be the biggest equipment purchase of a dispensary's lifespan, and with a five-figure price tag, may even cost more than the real estate the dispensary is located on. Even so, a CO2 extractor is crucial for expanding operational business and product offerings, making it a key purchase. By considering a lease, you'll be able to give your cannabis business much greater flexibility and cash flow.
To be a modern cannabis consumer is to be a chemist in miniature. Any person who steps into a dispensary to buy a product wants to know very specific data, like THC percentage. If you don't have this information, the customers will leave your shop for a competitor who can answer their questions about any particular product. Testing equipment isn't just necessary for customer curiosity, but for the law: most states that have legalized recreational cannabis have slapped on regulations about how potent the product can be. Tests to determine everything from soil pH to growth rate are necessary to know what you're selling and how good it is.
The days of customers purchasing cannabis in sandwich bags have long passed. Today's customers want vacuum-sealed packaging that gives precise information on the product's weight, strain, and potency. This makes cannabis packaging far more expensive than, say, garden seed packages—meaning that you need to invest in your product's appearance if you want it to get out the door. Financing the packaging equipment is especially necessary for bulk orders, and if a dispensary is selling dozens or even hundreds of grams of cannabis a day, bulk orders at large scale are the most cost-effective way to ensure the shelves remain stocked.
The appeal of quick cash makes cannabis dispensaries a juicy target for thieves: not only do they carry a huge amount of cash in their registers, but the products themselves can quickly be turned around and sold without ever leaving a trace. Not only is security equipment like locks, cameras, and alarms crucial for preventing crime, but owners need to ensure that their employees are following policies to the letter. Security equipment can be financed more easily than most other cannabis industry equipment, given that most security companies sell package deals as a one-time expense.
In a perfect world, a dispensary would have the cash on hand to purchase its equipment and never think twice about it. In reality, cash flow is unpredictable, and some months there's not enough to cover more than basic expenses. Cannabis financing from Canna Business Financing can help to ensure the biggest purchases are covered without requiring a major upfront expense. If you start today, you can get pre-approved within 48 hours.
Posted by Canna Business TeamFacebook
In an industry that is constantly evolving, Canna Business Financing provides business owners with a reliable source to gather the most up-to-date information. From resources to fund the growth of your business to insights on best practices to scale, look no further!