Lending has emerged as an important component of cannabis banking programs. By understanding the risks and taking the appropriate measures to mitigate them, bankers can make informed decisions about lending to cannabis-related businesses.
According to a research report conducted by New Frontier Data, the U.S. cannabis industry is projected to generate sales of $72 billion per year by 2030. The economic opportunities are significant, and while the risks of banking this industry are complex, a growing number of banks and credit unions are entering this line of business, creating increased competition.
Lending has emerged as an important component of a cannabis banking program, for both bankers who are new to the industry and those with significant cannabis banking experience. Cannabis-related businesses (CRBs) are actively seeking bank lending, from real estate loans to equipment financing, while bankers are increasingly viewing the cannabis industry as a prime source of new earning assets and a way to gain additional yield.