Securing Cannabis Equipment Financing Without Excess Stress

Despite the restrictions and legal hurdles of securing cash, there are ways to get cannabis equipment financing with less stress. Learn the options here.
Written by:  Allison Reich
Published:  June 24, 2024
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Are you a “budding” entrepreneur scaling a cannabis-related company? If so, you know the first order of business is securing the funding and equipment necessary to produce high-quality cannabis products. Access to the right technology can help cannabis growers, processors, and dispensaries deliver great experiences and build their brands.

When running a cannabis company, demand and opportunity aren’t the main barriers standing in the way of success. Instead, obtaining financing is one of the biggest hurdles businesses in the cannabis sector must overcome. But getting the funding to launch or expand a cannabis-based business can be tricky on many fronts. Federal laws and banking regulations make obtaining the capital needed to build a strong, sustainable business more difficult. Smaller lenders may charge higher fees to justify the perceived higher risk profile of cannabis businesses.

Fortunately, there are funding alternatives that can help a cannabis startup thrive. While traditional business loans present obstacles, non-bank financial services can help companies get the support necessary to secure the best equipment and get operations off the ground.

This guide examines the basics of financing cannabis equipment purchases for a new or expanding business. It also explores possible alternatives for securing funding and supplies through a procurement platform like

Download the free ebook: Grow Your Cannabis Business–Overcome These Three Finance Challenges

What is cannabis equipment financing?

Cannabis equipment financing is the process of getting financial loans to buy or lease equipment for use in a cannabis business. Though cannabis businesses operate in a burgeoning industry, they often face challenges in accessing traditional banking services due to the legal complexities surrounding cannabis substance scheduling

The impending move to lower cannabis to a Schedule III substance, as well as the potential future passage of the SAFER Banking Act, may soon give cannabis businesses and banks a smoother path to operation. Until then, a cannabusiness needs feasible alternatives that allow them to access capital to fuel operations.

With cannabis equipment loans, dispensaries, growers, and other related businesses can acquire cultivation systems, lighting, security setups, and more without paying the full cost upfront. This financial support is crucial in facilitating growth and operational efficiency within the rapidly expanding legal cannabis market.

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Grow Your Cannabis Business: Overcome These Three Finance Challenges

The cannabis industry is experiencing a once-in-a-lifetime boom. Don't let poor cash flow keep you from cashing in.

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Types of equipment that cannabis businesses need

Cannabis is an equipment-heavy small business with many potential growing pains. Although launching a dispensary storefront may seem straightforward, a lot goes into building a functional backroom or production floor. The costs to start a dispensary vary widely, with some sources reporting a range of $250,000 to $750,000 and other estimates climbing as high as $2M in high-cost locations.

Cannabis operations require a range of equipment and tools to produce safe cannabis products that are appealing to recreational and medical cannabis consumers while meeting potency guidelines. These include tools for growing, processing, finishing, and retail sales. 

Growing equipment

  • LED grow lights: Essential for indoor cultivation, providing the necessary spectrum of light for plant growth
  • Watering/irrigation equipment: Automated systems to ensure plants receive the optimal amount of water without manual intervention
  • Hydroponic systems: Tools that allow for soilless farming, which optimizes water usage and delivers nutrients directly to the plants’ roots
  • Nutrient dosing systems: Precision equipment for administering the correct amounts of nutrients to cannabis plants at various stages of growth
  • Climate control systems: HVAC and humidity control units that maintain optimal temperatures and humidity levels within growing facilities

Processing equipment

  • Trimming machines: Tools to streamline harvesting cannabis by removing excess leaves from the buds
  • Drying racks and cure boxes: Equipment for properly drying and curing cannabis flowers to preserve flavor, aroma, and potency
  • Extraction tools: Equipment to separate cannabis oils and concentrates from plant material; includes CO2 extraction equipment and solvent-based extractors
  • Rosin presses: Specialized equipment for solventless concentrate extraction, applying heat and pressure to separate resin from plant material
  • Distillation equipment: A system to refine extracts to increase purity and potency levels
  • Waste disposal systems: Solutions for the responsible disposal of cannabis waste that adhere to environmental regulations
  • Testing and analysis equipment: Tools such as chromatography machines for testing cannabinoid profiles and detecting contaminants

Finishing and retail equipment

  • Packaging machines: Automated systems for sealing products, ensuring compliance with regulatory standards
  • Labeling equipment: Machines that accurately apply labels with product information, batch numbers, and potency data
  • Point of sale (POS) systems: Commerce software tailored for cannabis retail operations, including managing sales, tracking inventory, and compliance reporting

Challenges for cannabis businesses looking for equipment financing

Federal prohibition of cannabis presents a major stumbling block to businesses operating legally within state statutes. Although some individual states support and benefit from cannabis sales for recreational and medicinal use, banking institutions must follow federal banking laws in administering loans. This makes it harder for cannabis businesses to get financing for their operations.

Specifically, two banking acts prevent most institutions from offering competitive loans to cannabis-related industries: the Anti-Money Laundering Act (AML), which requires banks to report suspected money laundering or illegal activities, and the Bank Secrecy Act (BSA), which requires them to report all transactions over $10,000 and all transactions involving cannabis and other scheduled substances. 

For this reason, many lenders refuse to participate in cannabis-related loans. Those that do, including smaller institutions like credit unions, often charge higher rates or holding fees to reflect the increased risk of administering cannabis-related loans. 

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Grow Your Cannabis Business: Overcome These Three Finance Challenges

The cannabis industry is experiencing a once-in-a-lifetime boom. Don't let poor cash flow keep you from cashing in.

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Cannabis equipment financing strategies: pros and cons

Choosing to finance the purchase of cannabis equipment is a pivotal decision for many businesses in the industry. Most aspiring cannabis business owners lack the substantial upfront capital to buy these essential tools outright. Cannabis financing allows borrowers to secure the necessary machinery and technology to operate efficiently and comply with regulations without depleting their reserves. 

However, like any financial commitment, a business financing program has advantages and disadvantages. Financing can offer payment plans and better cash management but may also lead to interest expenses and long-term debt. Understanding these pros and cons is crucial for cannabis businesses navigating their growth strategies in a competitive market.

Benefits of financing cannabis equipment

  1. Access to the latest technology: Financing the purchase of equipment allows cannabis businesses to access the most advanced equipment without the hefty upfront costs, ensuring they stay competitive and compliant with industry standards.
  2. Flexible payment terms: Financing provides flexible payment options tailored to match business cash flows or seasonal fluctuations, making budgeting easier.
  3. Improved cash flow management: Financing reduces large capital expenditures to manageable payments, improving cash flow and aiding in more effective financial planning and stability.
  4. Easier budgeting: Fixed financing payments facilitate better long-term budgeting and financial planning since costs are predictable and spread out over time.

Drawbacks of using financing to secure cannabis equipment

  1. Interest and fees: Financing solutions often come with interest rates and additional fees that can significantly increase the total cost of ownership over time. For a cannabis business that may be facing higher rates due to perceived risks, this can be particularly burdensome.
  2. Equipment obsolescence: The fast pace of technology increases the likelihood a dispensary will be stuck making payments on outdated equipment that is less efficient than newer options on the market.
  3. Strict eligibility criteria: Some cannabis businesses may struggle to qualify for financing due to stringent eligibility criteria set by lenders wary of the industry's regulatory and legal uncertainties.
  4. Potential for repossession: In default cases, financed equipment is at risk of repossession. This can disrupt operations and potentially lead to significant losses for a cannabis business that relies heavily on specific equipment for production or testing. If the business makes a down payment as part of financing, that money may also be at risk. 
  5. Long-term commitment: Financing agreements lock businesses into long-term payment schedules, limiting flexibility and adaptability in an industry known for rapid changes and regulatory shifts.
  6. Impact on credit score: Failure to meet financing terms can negatively impact a business's credit score, making it more difficult and expensive to secure future financing. For cannabis businesses already facing financial scrutiny, this can compound challenges.

Should you lease cannabis equipment?

Cannabis equipment leasing presents an appealing alternative for cannabis companies, offering financial flexibility and reduced upfront costs. However, this option also comes with its own set of challenges, including possible higher long-term expenses and contractual obligations. It's essential to weigh these pros and cons carefully before deciding. 

Here are some things to consider when weighing your leasing options:


  1. Lower initial costs: Leasing equipment generally requires less initial capital than purchasing, making it more accessible for businesses with limited upfront funds.
  2. Flexibility: Leasing agreements often offer the flexibility to upgrade or change equipment as needed, which is particularly beneficial in the rapidly evolving cannabis industry.
  3. Tax advantages: Lease payments can sometimes be deducted as business expenses on tax returns, potentially offering financial benefits.
  4. Maintenance and repairs: Depending on the lease agreement, maintenance and repairs may be covered or managed by the lessor, reducing additional operational burdens on the business.


  1. Higher long-term cost: While leasing offers lower upfront costs, the total payments can exceed the cost of purchasing equipment outright over time.
  2. Contractual obligations: Lease agreements come with fixed terms that might not always align with business needs or growth pace, potentially leading to wasted resources or inadequate equipment.
  3. Lack of ownership: At the end of a lease term, the business has no equity or ownership in the leased equipment, which could be seen as a missed investment opportunity.
  4. Limited customization: Leased equipment often cannot be modified or customized to meet specific operational needs without violating lease terms or incurring additional costs.
  5. Potential for higher insurance costs: Some leasing companies require additional insurance coverage on their equipment, which could increase a cannabis business's operational expenses.

How approaches cannabis financing gives cannabis-related businesses access to the capital and purchasing power to launch and grow a successful cannabis business. Using the purchasing platform and access to Financial Offerings preferred advances and extended net terms, cultivators, processors, and dispensaries can buy the equipment and supplies they need for daily operations without incurring additional fees or higher interest rates. 

Here’s how it works:

  • A cannabis business signs up with and onboards its preferred vendors to purchase equipment and supplies. Don’t have a vendor for a specific item? The platform features thousands of high-quality suppliers for everything your business needs.
  • provides buyers with flexible net terms through an easy verification process. Unlike a traditional bank loan or line of credit (LOC), acts as the vendor of record. This allows cannabis companies to get what they need while avoiding the restrictions of traditional lending.
  • For businesses that need access to capital, Financial Offerings can provide access to up to $500,000 of working capital to fund equipment and supplies purchases. 

Extended terms and preferred advances with allow businesses to get what they need and start turning purchases into revenue. These financial offerings help growing companies balance their cash flow, leverage lending effectively, and build their business without red tape or limitations. 

Case Study: How Standard Wellness unlocked cash and free time

There’s always something to order or coordinate in a cannabis business, especially when that business cultivates, processes, and dispenses its product. This is the case for Ohio- and Utah-based Standard Wellness, and the company needed a way to streamline its processes, take care of the bottlenecks, and access financing. 

Standard Wellness partnered with in Spring 2022 to help align its ordering and approvals process. The company also took advantage of the capital advance and net terms options it couldn’t find through traditional means. The partnership allowed Purchasing and Procurement Coordinator Mikey Haverman to recoup valuable time previously spent chasing orders and open up better cash flow opportunities to fuel growth. 

Says Mikey, “Having one centralized place that has all of the orders in it with the vendor numbers and the tracking is extremely helpful.” Even better, Standard Wellness was able to leverage the financial benefits quickly and easily. When the company needed to purchase a flower filling machine, purchasing it using traditional financing proved difficult. helped them overcome the challenge, “We were able to secure the cash in two days,” Mikey explains. 

As a result of the partnership with, Standard Wellness now pays just one invoice a month, saving 10 hours of manual work per work while doubling its ROI in cost savings. They’ve even used extended net terms to gain an additional 30 days to pay vendors. These increases in time and flexibility allow Mikey to turn his attention to other projects and growth strategies.

Get better cannabis equipment financing options with

If you’re a cannabis-related business intent on fast and sustainable growth with less frustration, can help. With access to preferred vendors, competitive pricing, excellent purchase and payment options, and other next-generation procurement features, makes it easier for cannabis entrepreneurs (and businesses of every industry) to get up and running quickly or refine their existing procurement process. 

Unlock capital advances of up to $500k. Enjoy extended 30, 45, or 60-day net terms for all purchases and other valuable benefits with, an easy and affordable partner for your business’s growth.
If you want to get the working capital and purchasing support to grow your cannabis business, schedule a demo of to learn more.

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