The Cannabis Debt Wall Is Real. Here’s How to Get in Front of It

The Coming Cannabis Debt Crunch

Across the U.S. cannabis sector, roughly $6 billion of debt is scheduled to mature by the end of 2026, with the five largest multi-state cannabis operators carrying about $3.4 billion of that load.

After years of limited access to traditional bank loans, many cannabis companies leaned on high-cost private debt. Those maturities are now clustering into what analysts are calling the industry’s “debt wall.”

Through 2025, debt has made up more than 80 percent of all new capital raised in cannabis financing rounds. That heavy reliance on leverage leaves operators exposed to refinancing risk at a time when lenders are cautious, spreads remain wide, and equity capital is still scarce.

Compounding the strain: federal prohibition limits bankruptcy protection, and IRS Section 280E continues to choke after-tax cash flow until or unless marijuana is formally rescheduled. The result is a narrow and unforgiving refinancing window.

What this Means for Cannabis Operators

Refinancing is possible, but selective. Some MSOs have successfully pushed maturities into 2028–2030 through secured note exchanges or new private-credit deals, but pricing remains high and collateral expectations are strict.
Sale-leasebacks are less generous. Real-estate investors are tightening underwriting as tenant defaults and re-tenanting costs rise.
No Chapter 11 safety net. Cannabis plant-touching businesses remain excluded from federal bankruptcy, forcing distressed operators to rely on Article 9 foreclosures, receiverships, or assignments for the benefit of creditors instead.
Tax drag continues. Until rescheduling is finalized, 280E disallows normal business deductions, inflating effective tax rates and squeezing cash flow.

A Practical Cannabis Financing Plan for the Next 6 to 12 Months

1. Map the debt stack and stress-test it

Build a full maturity and covenant calendar by facility with realistic scenarios for pricing, amortization, and fees.
Model base, downside, and “no 280E relief” cases for coverage, liquidity, and minimum cash.
Flag collateral shortfalls and intercreditor frictions now, not in diligence week.

This is the foundation for any credible cannabis lender outreach in a market where debt dominates new capital formation.

2. Start lender dialogues early and in parallel

Term-out risk: approach secured private credit to refinance near-dated maturities into 2028–2030 paper, even at higher coupons, if it removes default risk and covenant noise. Recent transactions show this remains doable with the right security package and scale.
Extend-and-amend: existing creditors are often the fastest path to time. Bring data, not hope. Propose tighter reporting, milestone triggers, or additional collateral in exchange for runway.

3. Use real estate strategically, not reflexively

Sale-leaseback (SLB) or mortgage take-outs can refinance capex-heavy sites, but underwrite cap rates and base rent coverage conservatively. Stress for pricing drift and re-tenanting risk in specialized facilities.
Where SLB math doesn’t pencil, consider senior mortgages with amortization tailored to cash cycles rather than locking in high fixed rents for 15–20 years.

4. Finance cannabis equipment and inventory to free working capital

Cannabis equipment financing and ABL/inventory lines can untrap cash without diluting equity. In cultivation and processing, these structures often carry lower effective cost than unsecured working-capital notes and reduce reliance on SLB.

5. Tighten operations for lender confidence and cash yield

Execute COGS discipline and 280E-aware accounting to preserve gross margin until rescheduling lands. Document it; lenders price what they can see.
Rationalize SKUs, renegotiate leases, and normalize store-level labor to protect 4-wall contribution. Lenders will demand store and asset-level performance packets during diligence.

6. Prepare a contingency stack for downside protection

If refinancing markets tighten, have non-bankruptcy tools lined up: consensual out-of-court exchanges, Article 9 processes, receiverships, or ABCs. These preserve optionality in a sector where Chapter 11 relief is limited.

Where Loanviser Cannabis Financing Services Fit

Loanviser is your conduit to specialized capital that already underwrites cannabis risk. In this cycle, that matters.

Cannabis real estate financing and selective SLB: match operators with lenders comfortable with cannabis-zoned assets, credit-tested rent coverage, and pragmatic TI structures, prioritizing mortgage alternatives where SLB pricing isn’t competitive.
Cannabis equipment financing: refinance cultivation, extraction, and packaging lines into term facilities that better match asset life and release working capital.
Unsecured or quasi-secured working capital for cannabis: where coverage supports it, place shorter-tenor capital to bridge to a 2026–2027 take-out or to fund high-ROI operational fixes; structure covenants to avoid tripping senior facilities.
Cannabis ABL/inventory loans: for operators with reliable turnover and disciplined cost accounting, asset-based lines tied to inventory/AR can reduce reliance on expensive last-mile debt.

What Could Change the Trajectory

Rescheduling and the end of 280E would boost after-tax cash flow and debt service capacity, likely improving pricing and widening the lender universe. It could also reignite M&A, providing strategic exits or scale for better terms. Timing and litigation risk remain variables.
Rate path: lower base rates help, but spread discipline will still apply as private credit stays selective post-2023–2024 risk lessons.

Bottom Line for Cannabis Operators

Build the debt map and covenant calendar
Open talks now with multiple capital providers
Use cannabis real estate and equipment finance surgically
Protect cash flow with 280E-aware operations until the rules truly change
Keep a clean contingency plan that doesn’t rely on Chapter 11

Loanviser can help source and sequence these options so companies aren’t negotiating from a position of urgency in late 2026.

How Can I Find Out if My Cannabis Company Qualifies for Debt Restructuring?

That is where we can help! We work with over 100 cannabis lenders and can help you determine what programs you might qualify for and what the range of rates and terms may look like.

Reference Articles

About the Author: Daryl Eames is the founder of Loanviser and the NH Cannabis Association. He has advocated for cannabis legalization in the state of New Hampshire and has deep experience in cannabis financing and cannabis merchant processing, servicing the cannabis industry since 2019.

The Cannabis Debt Wall Is Real. Here’s How to Get in Front of It