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Ever wonder how hemp and cannabis businesses get off the ground?
Green Check, a financial tech company connecting hemp and cannabis commerce, says it partnered with two entities to produce a research report examining cannabis debt and equity financing.
One of the firms is familiar to the Florida cannabis and hemp debate.
Whitney Economics of Portland, Oregon, will assist Green Check. Whitney recently finished a Florida cannabis and hemp study in 2023, often cited by advocates of a wide variety of hemp products. Whitney is a business consulting, data and economic research company.
The other partner is CTrust of Dallas, a credit-scoring and monitoring agency for cannabis businesses.
"This first-of-its-kind report, expected to be released in Q2 2024, will assess the total amount of debt invested in the cannabis industry and the percentage of debt financing required to support the industry’s continued growth," the three firms say in a joint Tuesday news release. "Findings will examine the extent to which cannabis startups and operators are using debt financing compared to equity and the shift in how cannabis businesses source capital."
The report will help customers better understand the current state of cannabis industry financing, allowing firms to develop the right strategies to address this changing market, says Kevin Hart, co-founder and CEO of Green Check.
"As more data becomes available about the cannabis industry, and the way cannabis is financed continues to evolve, we hope to highlight opportunities for financial institutions to enter into the cannabis market," says Hart. "By adding cannabis businesses to more investment portfolios, we can further our commitment to fostering a more inclusive financial system and thriving economy for everyone."
Investment in cannabis should function similarly to how other businesses are financed — by credit worthiness, says Dotan Melech, CEO of CTrust.
"As more and more data becomes available, business credit ratings will play an increasingly important role in the debt financing industry," says Melech.
Beau Whitney, Whitney chief economist, says it is critical to understand the current landscape and to have the necessary data "to develop strategies to remain ahead of the curve. This report will help the industry to understand the changing ratios of debt versus equity financing and to identify opportunities to increase participation by financial institutions."
Green Check of Bonita Springs was founded in 2017 by a team of technology, banking and regulatory officials. Green Check says it provides technology and advisory services to more than 140 financial institutions and more than 8,800 cannabis-related businesses.
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