How should a cannabis business prepare and structure a financing?
Start with financials that tell a clear story despite 280E, a model built on drivers you control, and a structure that fits your licenses, tax position and growth plan. Our financing advisors build the model and investor materials, structure the debt or equity terms, and support you through lender and investor due diligence to closing.
Looking for lenders or investors? Financing advisory prepares and structures your raise. Our Funding Buds team finds the capital: lenders, investors and partners that work with cannabis. Most raises use both.
Cannabis lenders and investors need financials they can trust despite 280E, projections they can test, and terms that account for licensing and regulatory risk. We prepare operators for that scrutiny and structure financings that fit the business. To find lenders and investors, see Funding Buds.
The challenge: standard financial packages don’t work for cannabis
280E distorts the margin and cash flow measures investors usually rely on. License value does not appear on the balance sheet. Regulatory risk is hard to quantify. Operators who approach capital sources with generic materials often face rejection or poor terms. A financing needs cannabis-specific preparation.
What’s included
- Normalized financial statements and a financial package that holds up in due diligence
- Driver-based financial models with 280E-aware tax modeling and scenario analysis
- Investor pitch decks and supporting materials
- Debt and equity structuring, including license and regulatory review effects
- Term sheet analysis and negotiation support
- Due diligence management through closing
How we work
Assess capital needs
We confirm how much capital you need, what it is for and when. Then we evaluate which structures are realistic: debt, equity, sale-leaseback, equipment financing or a combination.
Prepare investment-ready financials
We normalize your financial statements, show true cash flow, build credible projections, and assemble a package that withstands diligence.
Develop investor materials
We build a pitch deck that communicates your market, competitive position, team and growth plan, and addresses investor concerns about regulatory risk.
Structure and negotiate terms
We review cannabis-specific provisions such as license security, compliance covenants and 280E-adjusted financial metrics, and support negotiation.
Support diligence and closing
We coordinate responses to lender and investor requests and support you through closing.
Who it’s for
Operators raising debt or equity for new locations, equipment, inventory or working capital; operators refinancing existing debt; and operators preparing for an acquisition that needs outside capital.
Why it matters for cannabis operators
State-licensed medical cannabis moved to Schedule III on April 28, 2026 (the order is being challenged in court). The DEA has so far registered only medical-only dispensaries, and the IRS hasn’t said whether 280E relief depends on that registration, so medical-only operators are in the clearest position, while relief for operators with both medical and adult-use licenses is unresolved. Adult-use cannabis remains Schedule I pending the DEA administrative law judge’s recommendation, so 280E still applies to it. Lenders and investors will ask how much of your activity falls on each side and what happens if the medical change is reversed, so your model should show both. See our rescheduling tracker for the latest status.
Frequently asked questions
How is financing advisory different from Funding Buds?
Financing advisory prepares and structures the deal: the financial model, the investor materials, the terms and the diligence process. Funding Buds finds the capital: it assesses whether you are ready to raise and introduces you to lenders, investors and partners that fit. Most raises use both, and the two teams work as one.
What goes into a financing model for a cannabis business?
Historical results normalized for owner adjustments and one-time items, projections tied to operating drivers you can influence, and tax modeling that reflects 280E where it applies. We add capital structure scenarios showing how different financing choices affect returns, cash flow projections showing when and why capital is needed, and sensitivity analysis showing how the plan holds up if assumptions change.
How do you help with investor pitch decks?
We go beyond slide design. We help you sharpen the investment thesis, explain the business model in terms cannabis-focused investors respond to, build the financial story behind the capital ask, and structure the deck to answer the regulatory and market-risk questions investors raise before they ask them.
How do you structure a cannabis financing?
Structuring covers the choice between debt and equity, the terms attached to each, the treatment of existing owners, protective provisions for both sides, governance rights that come with new capital, and exit mechanics for investors. In cannabis we also check how the new ownership structure affects licenses, whether the change triggers state regulatory review, and the tax effects at closing and over the life of the financing.
What cannabis-specific terms appear in financing agreements?
Lenders and investors often ask for security interests tied to licenses, covenants requiring ongoing regulatory compliance, and financial metrics adjusted for 280E. We explain what each term means for your business, flag provisions that look acceptable at signing but cause problems later, and help you negotiate terms that fit how cannabis businesses actually perform.
How does 280E affect a cannabis financing?
Where 280E applies, the business pays federal tax on income a comparable non-cannabis business would not, which reduces the cash available to service debt or return to investors. That limits the capital structure the business can support and affects valuation, so models must show after-tax cash flow, not pre-tax results. 280E still applies to adult-use activity; the rescheduling section below explains where medical activity stands.
How do you support lender and investor due diligence?
We organize the financial package and data room before diligence starts, then help you answer information requests across financial, tax, operational and compliance areas. Because our accounting, tax and compliance teams contribute directly, responses are consistent and well-prepared, and your internal team carries less of the load.
How involved are you in negotiations?
As involved as you want. Some operators want an advisor in investor meetings and leading term sheet negotiation; others want us to prepare them and analyze terms while they negotiate directly. Either way, we review every term sheet and counter-offer and coordinate with your legal counsel through closing.