Legal Marijuana Sales Could Hit $20 Billion by 2020

How do legal marijuana business entrepreneurs raise money to start or expand their business? The big banks won't open a checking account for them, let alone lend them money, because cannabis production, processing, production and selling is still illegal at the federal level. Banking and financing options are limited, but there is a need and funding can be found.

A plethora of reasons could spark the need for an influx of capital. Peter McCowen of The Edibles Maker, Inc. said distribution of his products expanded rapidly in Colorado, and are now stocked in over 100 dispensaries. That success comes with new expenses to service the additional accounts and manage inventory. The company has also been creating new products including two types of chocolate covered cannabis coffee beans, and is working on swallow able tablets for those who want a zero calorie option. Besides research and development costs, each product needs packaging designed, production lines set up and marketing communications created.

Some entrepreneurs can self-fund from personal savings or business profits. Others need to seek money elsewhere.

Both debt and equity financing resources exist for the cannabis industry, according to Tom Lynch who works with marijuana entrepreneurs as President of California based- VerdeGroup Investment Partners. The firm has arranged for millions of dollars in loans and equity investments for cannabis companies seeking capital.

Because there are few traditional lending sources available and no SBA or similar government programs for cannabis businesses, Lynch says that small business owners typically take out a home equity line of credit, use credit cards or raise funds from friends and family.

The first step for entrepreneurs seeking funding of their business is to decide between debt (a loan) and equity (selling a piece of the company). Debt based lenders work mostly by the numbers and have a fairly straight forward application process according to Lynch. "They are focused on what I call the five C's: credit score, character, capacity to repay, cash flow and collateral," he said. Business owners going to a bank for help should be able to communicate how much they need, and how it will be spent, and have well organized financial information including credit score, balance sheet, and valuation of assets that can be used for collateral.

Equity investors will require a more formal pitch deck describing the team, the product or service, market size competition, etc. said Lynch. Investors provide funds based on the potential and future expansion of the business and typically seek a larger return on their investment than a debt provider does.

Lynch's company helps marijuana companies find the funds to start, expand, buy real estate and equipment along with working capital. One of the company's client's, a small chain of cannabis dispensaries in Colorado, was able to expand from four locations to seven with the help of VerdeGroup Investment Partners.

Lynch believes that VerdeGroup Investment Partners has found a unique niche in private lending, and that the legal marijuana industry now in its infancy will demand more financing for growth. VerdeGroup Investment Partners offers secured financing for legal marijuana businesses in 32 different states. The Company provides loans to an array of marijuana related businesses. The loans are secured by real estate, equipment, licenses and products. In addition to lending capital, VerdeGroup also takes equity stakes in the companies they work with.

VerdeGroup offers to investors the opportunity to take part in the legal marijuana industry by offering 12% annual return on, 24-Month Convertable Notes. For more information please visit VerdeGroupInvest.com or call 1-800-403-1993 for an investor package.

Our investors realize a 12% annual return every year.

Call now at 800-403-1993 to inquire.

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