Why Investors Are Turning Toward Cannabis in 2017

The marijuana industry has come a long way in the last 5 years. The cannabis market as-a-whole is one of the fastest growing industries in North America, and is quickly becoming one of the most profitable. States that have passed some form of legalization are reporting gross sales in the billions, and these numbers will be increasing as more states legalize marijuana.

Many investors are turning toward the cannabis industry to supply capital to this cash starved industry. Whether from venture capital firms or private money investment, the marijuana space is seeing more investment from private non-bank sources than ever before. Despite marijuana being illegal at the Federal level, investors are enamored with the higher returns and the appeal of the growing industry.

Continued Research and Positive Reception
Marijuana-related products continue to gain popularity for both medical and adult use. The largest contributor to the cannabis market’s expansion is the mounting medical research showing its benefits. Able to help with ailments ranging from anxiety to cancerous tumor growth, cannabis and derivative products like CBD (Cannabidiol) oil are now receiving recommendations from doctors in many states. Attention to its medical benefits is gaining worldwide acceptance.

There are 28 states that have now legalized some form of marijuana use, where 8 of these states do not require a medical recommendation. There were 4 additional states which voted to legalize adult use in the November 2016 Elections, which has only proven to be an economic boom for states like Colorado that have had increased employment, increased tourism, real estate values and other economic benefits. Colorado reported nearly $1 billion in cannabis product sales in 2015, and the figures for 2016 are expected to be larger.

Banking Challenges
One of the largest issues marijuana businesses are faced with is the difficulty and cost of obtaining banking and traditional loans to expand their business. Despite being legal in some form in 28 states, it remains difficult for cannabis-based businesses to open a business bank account, obtain a loan, or open a line of credit. This is where private investors provide value to the industry.

Private capital is one of the preferred options available to the business owners, who want to maintain control of their company without further diluting their equity.  Dynamic Alternative Finance has been able to secure more than $25 million in funding for cannabis-based businesses in the past 2 years. The need for capital continues to grow as more businesses are expanding into other states and larger facilities.

High Returns from Sound Investments
One of the reasons investors are looking at the marijuana industry is for the above average returns and the profit potential. Investors can receive monthly cash flow and obtain returns in the 12% and higher range. The cannabis industry is constantly evolving and investors are providing new and innovative products to serve this need for capital to expand their business.

Several of these cannabis businesses are large, multi-location, vertically-integrated operations with multiple product offerings. At Dynamic Alternative Finance, we arrange financing for established marijuana businesses that require more than $250,000 to expand their operations.

The Opportunity is Only Growing
The opportunity for investors is expanding as more states legalize marijuana and cannabis business owners have a need for equipment, real estate and working capital loans. Continued legalization of cannabis and related products means that not only will more companies open in the market, but more companies will decide to move into the market. Food and beverage companies are starting to explore and expand with marijuana-infused offerings and tobacco companies are investing in cannabis vape brands. Cannabis derivatives like CBD are presenting companies the opportunity to include the health benefits of marijuana in their products, without the psychotropic effects.

Recent Transactions with DAF

At Dynamic Alternative Finance, we help business owners acquire the funding they need to expand and grow their business when traditional resources aren’t available. Most recently, we have helped businesses with expansion projects, inventory woes and final touches before opening. Read more about each below:

Cannabis Company Expansion $350,000
A vertically-integrated marijuana company wanted to expand past it’s 2 stores and grow operation without searching for equity capital. We were able to arrange a $350,000 deal in less than 3 weeks.

Marijuana Storefront Build-Out $350,000
A vertically-integrated cannabis company wanted to open a 4th store in the Denver area without diluting their equity. We were able to secure a $350,000 working capital loan for the build-out of their new location. They were drawn to the speed and flexibility of the lender, and the ability to obtain exceptions during the underwriting process.

Grower’s Working Capital $325,000
A wholesale adult-use cannabis grower in their first year of operation needed additional capital for marketing, equipment and supplies. Losing money, and unable to invest resources in raising equity capital, we were able to secure a $325,000 private money real estate loan using equity in the real estate and green house as collateral. This deal closed in a mere 10 days from the first call.

World of Cannabis & Marijuana Business Conference – November 15-18, 2016

World of Cannabis Conference
Las Vegas, NV
November 15-16, 2016

Marijuana Business Conference & Expomarijuana-business-conference-expo
Las Vegas, NV
November 16-18, 2016

Jim Tarbell, DAF’s President, and Director of Business Development Scott Jordan will be in Las Vegas, NV November 15-18 for two of the cannabis industry’s biggest events.

Starting November 15th, they will be at the World of Cannabis Conference at the Palms Hotel. Then, starting November 16th they can also be found at the Marijuana Business Conference & Expo at the Rio All-Suites Hotel just across the street. If you have an existing business that has been operational for over one year, or are seeking to buy or lease your real estate for a cultivation or retail marijuana business, these are must-attend conferences. They look forward to seeing you there!

Scott Jordan for Marijuana Investor News: Writing an Effective Executive Summary to Secure Cannabis Funding

scottjordannews-750xx1250-704-0-12Scott Jordan, Director of Business Development for Dynamic Alternative Finance, shares the 10 things that your marijuana business plan’s executive summary needs to include in order to secure funding for Marijuana Investor News. Read what lenders are looking for and how you can stand out from the crowd.

Read the full article by Scott Jordan here.1a845dd

Cannabis World Congress and Business Expo – June 15-17, 2016

Cannabis World Congress and Business Expocwcbe-logo-450x105
New York, NY
June 15-17, 2016

DAF’s Scott Jordan will be presenting “How to Borrow Money to Fund Your Marijuana Businesses Growth”
during the High Finance Seminar Track on Thursday,  June 16th at 4pm in Room 1A10 of the Javits Center.

Discover how to obtain private, non-bank debt based financing for working capital, equipment, or real estate loans. You will learn the top 10 sources for financing any marijuana business, the options available for financing, and how you can create wealth by owning your commercial real estate. If you have an existing business that has been operational for over one year, or are seeking to buy or lease your real estate for a cultivation or retail marijuana business, this is a must-attend seminar.

Thinking about attending? Be sure to use the promo code DYNAMIC for $100 off an exhibits-only registration. You can register here.

During his seminar you will also learn what to do and what not to do when seeking a loan, as well as hidden opportunities for investors in real estate and cultivation development deals.

Find out more about attending this seminar here.

Scott Jordan for Marijuana Investor News: 6 Mistakes Marijuana Businesses Make When Seeking Funding – Part 2

scottjordannews-750xx1250-704-0-12Scott Jordan, Director of Business Development for Dynamic Alternative Finance, explains the next three things marijuana business owners do wrong when seeking funding for Marijuana Investor News. Read what other common mistakes you should avoid, and be sure to read the first 3 recommendations here!

Read the full article by Scott Jordan here.1a845dd

Scott Jordan Contributes to Financing Options Article for Cannabis Business Times

cannabis business timesScott Jordan, Director of Business Development for Dynamic Alternative Finance, dives into the DAF process and how debt-based financing works as part of an article by Cannabis Business Times. Find out what you should expect from the funding-acquisition process, and why so many businesses are choosing to keep their equity.

Read “9 Options for Financing in a Non-Traditional Business Environment” here.