A new report released today by Whitney Economics (WE) highlights the significant financial needs of the U.S. cannabis industry, projecting that between $65.6 billion and $130.7 billion in sustainable growth capital will be necessary to support new cannabis businesses and refinance existing ones over the next decade.
This investment could generate an estimated $1.0 billion to $2.4 billion in interest revenue for financial institutions that engage in cannabis lending.
Published with support from CTrust—a business credit scoring and monitoring agency for the cannabis industry—and Green Check, a fintech connector for the emerging market, the report emphasizes the industry’s expanding financial landscape. It projects U.S. cannabis retail sales to grow from $28.8 billion in 2023 to $87.0 billion by 2035. To sustain this growth, the number of cannabis licenses is expected to increase from approximately 40,000 today to between 65,000 and 70,000, providing new opportunities for lending and investment.
WE founder and chief economist Beau Whitney stressed that traditional funding methods won’t suffice to meet the industry’s needs. “The funding needed to realize this growth cannot be supported solely by friends and families,” Whitney explained. He added that the report seeks to encourage more financial institutions to participate by offering a comprehensive analysis of the risks, rewards, and regional opportunities in cannabis lending.
The report identifies states like California, Florida, Illinois, New York, Pennsylvania, and Texas as key markets for financial investment in the cannabis sector over the next decade. It aims to help banks and credit unions develop a better understanding of the unique challenges and opportunities in the cannabis market, potentially opening the door for more informed and strategic lending partnerships.
CTrust CEO Dotan Y. Melech highlighted the cautious approach banks have taken toward the cannabis industry due to regulatory challenges but sees the report as a step toward fostering new partnerships. Similarly, Kevin Hart, CEO of Green Check Verified, emphasized the importance of this data for financial institutions and noted that the current network of over 170 banks and credit unions involved in cannabis lending could benefit significantly from the insights provided in the report.
