The short answer
Banks often decline cannabis property. Private lenders and specialty finance companies fund some deals.
Loan size, pricing and documents vary by lender. Size the loan first, then ask for written terms.
On this page
- What lenders fund cannabis real estate
- What a public cannabis lender reports
- Loan sizing: loan-to-value, coverage and closing costs
- Owner-occupied vs investor property
- What underwriters want before a term sheet
- Bridge-to-permanent refinancing paths
- Licensing and zoning issues that kill deals
- A worked example: a $2 million property
- Mistakes to avoid
- Terms to know
- Frequently asked questions
What lenders fund cannabis real estate
Private lenders, credit funds and a few regulated institutions lend against cannabis property. Chicago Atlantic is a public company in this market. Its 10-K describes senior secured loans, primarily to state-licensed cannabis operators.
Banks that serve the sector must follow FinCEN guidance. FinCEN counted 755 depository institutions banking marijuana businesses in September 2021.
| Lender type | What they usually weigh | Watch for |
|---|---|---|
| Specialty finance and credit funds | Property, license and cash flow | Pricing and fees set by the lender |
| Private and hard money lenders | Collateral and speed | Short terms and high carrying cost |
| Community banks and credit unions | Existing relationship and controls | Narrow appetite and slow review |
| Seller financing | Seller's goals and your down payment | Balloon dates and default terms |
What a public cannabis lender reports
Chicago Atlantic files annual reports with the SEC. Its fiscal 2025 10-K gives numbers most lender sites do not.
At December 31, 2025, loans yielded 16.3 percent to maturity, weighted average. The range ran from 9.7 to 26.9 percent.
That is the lender's return, including fees. It is not the rate on one borrower's note. It does show where all-in cost can sit for this kind of debt.
The same filing reports a weighted average maturity of 2.2 years. It states a target of real estate collateral coverage of at least one times principal.
Loan sizing: loan-to-value, coverage and closing costs
Lenders size a loan from two angles. Loan-to-value asks how much the property is worth. Coverage asks whether income pays the debt.
Property Loan Sizer
Estimate loan size, payment and coverage for a cannabis property loan.
How to use this: Enter the property value and the terms a lender quoted. The tool shows the loan, your equity, the payment and debt service coverage. Nothing is stored.
* Illustrative only. Not investment advice.
Closing costs to expect
- Appraisal and environmental report.
- Legal fees for both sides.
- Title and recording costs.
- An origination fee paid to the lender.
Ask for a full fee list before you pay for any third-party report.
Owner-occupied vs investor property
Some buyers own the building and run the business. Others buy the building and lease it to an operator.
| Structure | Who holds the license | What lenders check |
|---|---|---|
| Owner-operator | You | Your operating history and your license |
| Investor landlord | Your tenant | Lease strength and the tenant's license |
Investor deals add a second party to the risk. Expect the lender to review the lease closely.
What underwriters want before a term sheet
Entity and license
Formation papers and active license.
Property file
Contract, survey and zoning letter.
Financials
Statements, tax returns and a forecast.
Reports
Appraisal and environmental review.
A complete package lets the lender price the deal faster. Gaps restart the clock.
Bridge-to-permanent refinancing paths
Many buyers start with a short bridge loan. They refinance once the license and operating history are in place.
Cannabis property debt sits in the same capital stack as any other. See how the stack works and senior debt structures.
See our bridge loan guide for costs and exits.
Licensing and zoning issues that kill deals
- Local approval has not been granted yet.
- The license does not transfer with the property.
- A buffer rule makes the site ineligible.
- The lease or contract has no license contingency.
Many licenses attach to a specific address. Confirm that before you spend on due diligence.
A worked example: a $2 million property
These numbers are an illustration. They match the sizer above.
A property is worth $2,000,000. A lender offers 60 percent loan-to-value at 11 percent over 25 years.
The loan is $1,200,000. Equity before costs is $800,000. The payment is about $11,761 a month.
Annual debt service is about $141,100. With $220,000 of income, coverage is about 1.56 times.
| Item | Result |
|---|---|
| Loan | $1,200,000 |
| Equity | $800,000 |
| Monthly payment | About $11,761 |
| Debt service coverage | About 1.56x |
Mistakes to avoid
- Paying for an appraisal before you know the lender's terms.
- Assuming a license moves with the building.
- Skipping the environmental review.
- Ignoring the prepayment clause.
- Shopping one lender only.
Collect two or three term sheets in the same month. Compare total cost, not rate alone.
Terms to know
| Term | Plain meaning |
|---|---|
| Loan-to-value | The loan as a share of the property's value. |
| Debt service coverage | Income divided by loan payments. |
| Appraisal | A professional estimate of value. |
| Phase I environmental | A review of past site use and contamination risk. |
| Condition precedent | A requirement that must be met before closing. |
| Cross-collateral | Pledging more than one asset for a loan. |
Quick Check
See what capital you qualify for in under 3 minutes.
No origination fees for initial capital review. Terms depend on the deal and the lender.
Check Capital Eligibility →Frequently Asked Questions
Sources and further reading
- Chicago Atlantic Real Estate Finance, Form 10-K for fiscal year 2025 (SEC)
- FinCEN guidance FIN-2014-G001, BSA Expectations Regarding Marijuana-Related Businesses
- FinCEN, Marijuana Banking Update (SARs filed through September 30, 2021)
- Chicago Atlantic, company website
- SBA Form 1244 (12-2021), applicant certification
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