Signs of Optimism in Cannabis Real Estate Financing for Q1

We’ve spent the better part of the last decade laser focused on sourcing lending options for the cannabis industry. Back in 2018-2019 traditional cannabis real estate lender rates were as low as 6%. Oh what a time it was.

Then came COVID, massive inflation and increases in the FED rates and Prime Treasury resulting in the traditional cannabis lender rate windows increasing to 10% to 13% on average. 

After years of these rate increases we finally have some good news to report. Traditional cannabis lending rates are finally starting to fall!

What do Traditional Cannabis Real Estate Financing Programs Look Like Today?

To get a sense of what traditional cannabis real estate lending programs look like in Q1 2026, let’s take a look at some examples offered today. Keep in mind, these include some banks and many credit unions that will finance cannabis operators.

Credit Union: (Serving New Jersey, and some of New York, Pennsylvania and Connecticut)

• Purchase and refinance only
• $150K to $3M
• Repayment terms of 15 to 25 years
• Starting rate 7.5%
• 1 to 2 lender points charged
• Single tenant LTV cap of 65%
• Multi tenant LTV cap of 75%
• Owner occupied LTV cap of 60%
• 2 years time in business required
• Minimum debt service coverage ratio of 1.3

Credit Union: (Serving New York State)

• Primarily purchase and refinance only
• Will consider renovations in some cases
• $50K to $7M
• 15 year term with 30 year amortization and 5 year rate adjustments
• Starting rate 9%
• No lender points charged
• 3 years time in business required
• Maximum of 65% loan to value for plant touching entities
• Maximum of 80% LTV for landlords if less than 10% of rental income is from cannabis plant touching tenants
• Minimum debt service coverage ratio of 1.25 and no higher than 40% DTI
• Require 90 days of banking relationship prior to funding

Bank: (Serving Massachusetts)

• $250K to $5M
• Purchase, refinance, construction and renovation
• 5 to 25 year terms
• 7% to 10% rate window
• .5 to 1 lender point charged
• Pre-revenue OK if the collateral and guarantors are very strong
• Require banking relationship prior to lending
• 65% to 85% loan to value
• Non-plant touching or landlords only

Bank: (Serving the US but with a focus on Arizona, Colorado and Oklahoma)

• $4M to $6M
• Purchase, refinance, construction and renovation
• 5 year P&I with a 20 year amortization
• 9% to 13% rate window
• 1 to 1.5 lender points charged
• 2 years time in business required
• Up to 65% loan to value

Bank (Serving California)

• $3M to $10M
• Purchase, refinance, construction and renovation
• 10 year term
• 7.5% to 9.9% rate window
• 1 to 2 lender points charged
• 3 years time in business required
• Up to 65% loan to value

These are just some examples of cannabis credit union and bank financing programs available. If you are a strong borrower, reach out to learn more about coverage and programs in your area!

How Do I Know if My Cannabis Company Qualifies for a Traditional Lender

Although traditional cannabis lenders offer the best rates and terms on commercial real estate they are very risk averse. Here are some qualification criteria to help identify if you might qualify.

• Your company has been in business for at least two years
• Corporate financials indicate a debt service coverage ratio of 1.25 to 2
• Personal guarantors can demonstrate they have enough income and cash reserves to service the debt if the company cannot
• Real estate is located in an area with a population of at least 100,000
• Building is brick and mortar or metal and concrete
• Valuation is on a commercial use basis, not a cannabis use basis
• Loan to value requested is 65% or lower
• The lender has access to the first position on the property
• All due corporate taxes have been filed and paid
• Your company is moving all revenue through your bank accounts and can be verified
• You have time. Traditional lenders do not move as quickly as private lenders
• You can bring your primary operating account to the lender

Want to learn more about our traditional cannabis lending programs? 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.

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.