NJ LEAF Coming Soon – New State Funding for Cannabis Businesses

One of the greatest challenges facing startup cannabis businesses is gathering the capital to start and sustain operations until they achieve profitability. Real estate, high-tech equipment, and skilled labor are all expensive inputs required to maintain a successful operation whether you are a cannabis cultivator, manufacturer, or testing facility.

To help these cannabis businesses, the State of New Jersey is preparing to launch a fixed-interest financing program called the “New Jersey Lending for Equity, Access, and Financing Program,” or NJ LEAF. Funding is available only to for-profit entities holding recreational Class 1 Cultivator, Class 2 Manufacturer, or Testing Laboratory licenses. Medicinal-only ATCs and Testing Labs are not eligible.

The purpose of this program is to help small New Jersey cannabis businesses stabilize their operations through flexible financing options and fixed interest rates. Fixed assets including owner-occupied real estate, equipment, and machinery can be supported by loans ranging from $100,000 to $1,500,000. Businesses can also apply for working capital loans ranging from $100,000 to $500,000. Loan terms may range from 7 years (for working capital) to 30 years (for real estate). Eligible small businesses must employ less than 250 full time employees, and have gross annual revenue of no more than $5 million.

When this program launches, it may be a key part of a small cannabis business’ plan for getting through the tough early stages of operations. Loan applications will be reviewed on a first-come, first-served basis for three years from the opening of applications or until the State’s funds are exhausted, whichever comes sooner. Cannabis businesses seeking to obtain financing should keep an eye out for the launch date so they can apply promptly.

A knowledgeable cannabis attorney can help navigate the State of New Jersey’s application systems and obtain financing if it is available. It is important to discuss your business’ financing needs with experienced counsel to identify and secure the best options available.