Recreational marijuana is straddling a thin line with the continued federal prohibition on its sale. Despite progress with the SAFE Banking Act, the reality remains that many new entrepreneurs have very limited funding options to break into the industry.
Partner Bob Lickwar explained that because underwriting models have not been established for marijuana businesses, there's a distinct possibiity newer entrepreneurs in Connecticut who don’t already have strong investor backing won't have access loans and other financial services.
In Michigan, which has an established legal recreational market, credit unions are willing to lend to cannabis companies at much higher interest rates, usually greater than 15%. But with a state like Connecticut, which only recently legalized marijuana, there's a lot more uncertainty.
“While there’s a bucket of resources out there, will they be available to everyone looking to enter the market?” Lickwar asked.
Read the full article published by Hartford Business Journal.