Coronavirus’ Effect on the Cannabis Industry in the U.S.
After two years of the Coronavirus Pandemic, life has permanently shifted for everyone. As we adjust to a new way of living, our dependence on goods and services evolves, and new industries come to the fore. In the wake of coronavirus, the cannabis industry saw an unprecedented surge as consumers came to rely on cannabis’ leisurely and pharmaceutical effects.
The importance of the cannabis industry was so profound that many states deemed it an essential business during the most stringent lockdown periods. While the coronavirus infects our lives and puts strains on us all, the cannabis industry has offered considerable support for those in need. For cannabis business owners and those interested in starting, now is the time to capitalize on an important and lucrative industry. This article will detail the effects of coronavirus on the cannabis industry and loan options for cannabis entrepreneurs growing or starting their small businesses.
The Legalization and Rise of the Cannabis Industry
After a long period of the U.S. government considering marijuana as a controlled subject, decriminalization and legalization are swiftly on the rise. So far, eighteen states have legalized cannabis, with the latest addition of Connecticut in 2021. As cannabis becomes legalized for medical and recreational use, the industry is booming at an unprecedented rate. In fact, in 2021, the industry was valued at 16.25 billion. Compare that to 2020 at 12.81 billion and a projected 54.41 billion growth by 2026.
Now is the best time to build or grow your cannabis small business and seize success in this industry. However, there is a limiting factor in owning a cannabis business in the U.S. Traditional banks are wary of marijuana’s label as a federally controlled substance. Despite the enormous opportunities available, they consider the cannabis industry too risky. Fortunately, small business loan lenders such as BitXFunding have many cannabis loan options for your business.
The Impact of the Coronavirus Pandemic on Cannabis Small Businesses
While the cannabis industry was already rising, 2020 brought unprecedented changes to the global economy. As we descended into a new standard, life as we know it permanently changed. Access to essential goods became limited, and we stopped using many consumer items we previously took for granted.
However, the cannabis industry remained strong and persevered amid the Coronavirus epidemic. While still in the process of legalization across states, it has boomed as a mental health treatment that’s effective and cost-efficient. The coronavirus pandemic took a toll on us all. That being said, the cannabis industry has been in an effective spot to combat that toll. In fact, many states legalizing cannabis make up for the economic losses from COVID-19 through cannabis taxes.
Some of the best opportunities for cannabis growth are through small businesses. As this trend continues and more states legalize cannabis, the industry will continue to boom. However, if you’re a small business entrepreneur starting or growing your cannabis small business, you need suitable loans. Luckily BitXFunding has you covered with the most effective cannabis loan options.
Cannabis Industry Small Business Loan Options
Small business owners who join the cannabis industry are in a great spot to do it. For those entrepreneurs who already own a small cannabis business, now is the best time to grow. However, to appropriately respond to our dynamic financial landscape, we need the liquidity to do the job right.
Below are several loan options available to get your business thriving. Do note that applying for these loans will require at least one year in business and about $100,000 in annual revenue. Additionally, cannabis small businesses are considered “risky” to banks, and your best option for loans is online loan lenders.
Line of Credit
One of the best ways to stay ahead of unforeseen business costs is with a business line of credit (LOC). Rather than taking out a set loan for your business, you have a revolving LOC you can withdraw funds from and pay back as you need. This option is best if you want to stay ahead of unforeseen costs or grow your business. Further, business LOCs put a premium on flexibility, as you can use the funds for various business expenses.
This option is open to pre-revenue and existing businesses. However, if you need a large sum of funds for specific improvements, other loan options may be more suitable.
Requirements
- 1+ Year in Business
- 700+ Credit Score
- 100k Annual Revenue
Business Cash Advance
If your cannabis business relies on an asymmetrical cash flow, such as with growing operations, business cash advances (BCA) are the optimal loan choice. With a BCA, you borrow money upfront in return for the promise of future credit card sales or fixed automated clearing house (ACH) withdrawals. Cash Advances are quick, secure, and don’t take long to apply for. Further, these loans have a 6-12 months repayment period for a fast turnaround.
Requirements
- 1+ Year in Business
- 500+ Credit Score
- 100k Annual Revenue
Equipment Financing
Any cannabis venture, from storefront to outdoor growing operations, requires significant equipment. Whether it’s lighting, farm equipment, or security systems for your business, these unexpected costs can become a nuisance if you’re not prepared for them. Luckily with the suitable options, you can set up your first cannabis equipment loan in no time.
Equipment financing works by taking a loan to purchase any equipment you’ll use in your business. The equipment acts as collateral to the loan until it’s paid off. Once you pay off the loan, it belongs to your company.
Requirements
- 1+ Year in Business
- 630+ Credit Score
- 100k Annual Revenue
Fund Your Cannabis Business today with BitX Funding
In the wake of the coronavirus epidemic, life changed forever, and many industries saw an unprecedented shift in their business. However, several vital sectors stood out in their ability to aid those affected by the Pandemic and become essential to U.S. consumers. One of the most notable examples is the cannabis industry, which has skyrocketed in recent years and only done better throughout COVID-19.
As marijuana becomes legalized across the country, more people are joining in the trend of success and investing in a growing industry. While it’s not easy to start and run a cannabis small business, it’s possible with suitable loan options. Even though banks are hesitant to join this lucrative trend, BitX Funding has you covered with our extensive loan solutions. If you’re interested in our cannabis or small business loans, BitX Funding can get you set up within days.
For more information on working capital loans, contact BitX Funding by phone, email, or by filling out the form below.
Follow us on Facebook, Twitter, and LinkedIn!
Published by Chris Davies, Creative Copywriter at The Labate Group in Westport, CT.
The post Coronavirus’s Effect on the Cannabis Industry in the U.S. appeared first on Small Business Loan Marketplace.