Cannabis Financing Update for Q4 2025 – Looking Forward to 2026

A Look Back at the Cannabis Financing Industry for 2025 and a Look Forward to 2026

A Year in Review

2025 was another turbulent year in the cannabis lending space, marked by a series of distinct waves.

The year opened with several long-standing cannabis lenders exiting the industry. Momentum briefly returned as the Federal Reserve lowered benchmark rates.

Then things tightened again when the federal continuing resolution included new hemp-related criminalization measures, and the year is ending with noticeably lower financing approval rates.

What the industry expected but didn’t get were major macro changes. Only Texas and Nebraska moved to legalize medical cannabis.

Rescheduling from Schedule I to Schedule III stalled in political gridlock, and the SAFE Banking Act failed to revive any meaningful traction.

Without these shifts, lending and banking access remained constrained.

As a result, pre-revenue and early-stage cannabis operators faced tougher paths to funding, while established, cash-flow-positive businesses benefited from improved rates and refinancing opportunities.

2025 Cannabis Lending Highlights

Schedule III moved forward materially

While full federal rescheduling wasn’t finalized, HHS’s 2024 recommendation continued through DEA review in 2025, and the industry began preparing for tax structure changes.

The key lending implication:

• Several cannabis lenders began pre-pricing deals assuming partial 280E relief in 2026–2027, improving underwriting models for profitable operators.

Consolidation accelerated, shifting lender appetite

Many MSOs and mid-tier operators sold underperforming assets to clean up their balance sheets.

Lenders in 2025 reacted by:

• Favoring operators with fewer licenses but better-performing stores
• Offering more asset-based cannabis financing and fewer cash-flow structures
• Increasing interest in sale-leaseback real estate again, particularly in limited-license states

Debt maturities triggered restructurings

A significant percentage of cannabis corporate debt issued in 2020–2021 hit maturity.

Key trend:

• Lenders extended or refinanced debt only for cash-flow-positive operators, pushing weaker operators toward mergers or shutdown.
  

Merchant processing became more accessible

Late 2025 saw a noticeable expansion of cannabis-friendly debit/ACH processors with stable sponsorship banks.

Implications:

• Lenders increasingly required verifiable electronic revenue trails, not cash deposits
• Working capital programs using bank-verified cash flow became easier to qualify for

Private credit firms increased exposure again

With traditional lenders exiting early in 2025 and then re-entering cautiously after mid-year rate cuts, private credit funds filled the gap

They offered:

• Higher rates, yes
• But faster approvals
• Broader collateral acceptance
• Larger national footprints

What Does this Mean for Cannabis Operators?

Early-stage operators

You’ll need to arrive at the lending table with stronger fundamentals. Expect requirements for additional guarantors, more cash reserves for debt service, higher-quality collateral (equipment or real estate), and stronger cross-corporate guarantees from related businesses.

Growth-stage operators

Clean and transparent bookkeeping becomes non-negotiable. Running revenue through cannabis-friendly banking partners and demonstrating consistent debt-service capacity will be essential.

Mature operators

With substantial debt maturities coming due, refinancing will be a priority. Many will be able to attract traditional lenders offering more competitive rates, helping reduce overall cost of capital.

Looking Forward to 2026

The indicators suggest cautious optimism. There remains a non-zero chance that rescheduling efforts or a revised SAFE Banking reform comes back into play. Even without legislative miracles, lenders that remained in the space throughout 2025 are expected to replenish funds early in the year, bringing renewed liquidity.

Additional Federal Reserve rate cuts should also benefit stronger borrowers who qualify for bank-style programs.

Outside of these developments, 2026 appears likely to mirror 2025 in available lending programs, with a gradual shift toward more selective underwriting. Lenders still need to put capital to work, and the cannabis sector will remain a key target for that deployment, even if credit standards stay tight.

Lending criteria will tighten even more

Expect:

• Higher personal guarantee requirements
• More debt service coverage ratio scrutiny
• Fewer unsecured options for early operators
• Preference for vertically integrated or multi-location operators in limited-license markets

If Schedule III finalizes, lenders will loosen mid-year

Schedule III is the biggest domino. If DEA finalizes it in 2026:

• 280E disappears
• Profitability increases
• Lender underwriting models improve
• A new wave of bank participation begins (slowly, but real)

Expect a 6–12 month lag between policy change and lending transformation.

Real estate financing will expand

As rates fall and REITs regain liquidity, 2026 should see:

• More sale-leaseback deals
• More construction and buildout financing
• Renewed interest from private real estate lenders who left the space in 2023–2024

Equipment financing rebounds

With new capital budgets and lower funding costs:

• Cultivation equipment financing expands
• Manufacturing equipment financing becomes more competitive
• Lease programs return for established operators

Working capital demand spikes

Because margins remain thin, you’ll see:

• More MCA replacements
• More term funding for refinancing high-rate debt
• More hybrid ABL programs tied to real revenue, not projections

Need help financing cannabis equipment, getting a cannabis real estate loan or an unsecured cannabis loan? 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.

Contact us today to schedule your no-obligation discovery call.