Investors searching cannabis property loans, dispensary real estate financing, and cannabis warehouse bridge need a lender who underwrites licensed real estate — not inventory, not plant counts, and not unlicensed ops.
Jaken Finance Group considers cannabis-related commercial real estate bridge on qualified files. Rates: 8.99%–13.5% interest-only, terms 12–24 months. Underwriting is collateral-first: building, lease, license transferability, and a documented exit.
See the commercial property type matrix · industrial warehouse loans · special-use commercial
What we finance — and what we do not
| In scope (real estate) | Out of scope |
|---|---|
| Acquisition of licensed retail, grow, or processing RE | Unlicensed or federal-prohibited activity |
| TI / security buildout on titled real property | Financing plant inventory as primary collateral |
| Sale-leaseback of real estate to licensed operator | Speculative land without license path |
| Refinance bridge when bank takeout is delayed | Operating lines for inventory / payroll alone |
Property subtypes and underwriting focus
| Subtype | Primary metrics | Typical leverage |
|---|---|---|
| Dispensary retail | License, lease, sales per SF (ops support) | 55%–65% LTV |
| Indoor cultivation | Power capacity, HVAC, security, certificate of occupancy | 55%–65% LTC |
| Greenhouse / outdoor | Water rights, zoning, security perimeter | Deal-by-deal |
| Processing / manufacturing | Industrial buildout, environmental | 55%–65% LTC |
| Distribution warehouse | Clear height, security, industrial lease | 60%–68% LTV |
Industrial shell underwriting often overlaps industrial warehouse loans — cannabis files add license and security layers.
Purchase vs. value-add
| Scenario | Structure | Notes |
|---|---|---|
| Stabilized leased to licensed tenant | Bridge on NOI / lease | Confirm license transfer clauses |
| Dark industrial → grow buildout | LTC + milestone draws | Power upgrade is often the critical path |
| Dispensary TI for new license | Acquisition + TI holdback | Timing tied to local approval |
| Sale-leaseback | Bridge then private permanent | Document rent vs market |
Worked example — licensed grow in industrial shell
State-legal market — 28,000 sf warehouse conversion to indoor cultivation:
| Line | Amount |
|---|---|
| Purchase (industrial shell) | $2,400,000 |
| Grow buildout (HVAC, lighting, security, rooms) | $1,100,000 |
| Soft costs / interest reserve | $220,000 |
| Total cost | $3,720,000 |
| Bridge at 60% LTC | $2,232,000 |
| Sponsor equity | $1,488,000 |
| Rate | 12.5% IO · 18-month term |
| Lease to licensed operator | Absolute NNN · 10-year |
| Stabilized NOI | ~$310,000/yr |
| Exit | Private credit / credit-union CRE or cash sale |
Power upgrade and certificate of occupancy for cultivation use gate the second and third draws — not square footage alone.
License and diligence checklist
| Item | Why lenders care |
|---|---|
| Active state / local license | Occupancy legality |
| Transfer / change-of-ownership rules | Post-close continuity |
| Lease cannabis clauses | Landlord default risk |
| Security plan (cameras, vault, access) | Insurance and compliance |
| Phase I ESA | Prior industrial use |
| Utility letters | Amp capacity for grow |
Permanent exits — the hard part
Many agency and CMBS programs will not take cannabis-tenant real estate. Plan exits early:
| Exit | Reality check |
|---|---|
| Private credit / specialty CRE | Most common takeout |
| Credit union / community bank | Jurisdiction-dependent |
| Cash sale to operator or REIT niche | Model marketing time |
| Conventional bank | Often unavailable |
Bridge without a named exit path is a carry trap — disclose takeout conversations at application.
Risks unique to cannabis real estate
- License denial or delay after close
- Banking disruption for the tenant (rent payment friction)
- Municipal ban / overlay changes
- Buildout cost overrun on HVAC and electrical
- Limited buyer pool if exit is a sale
Real estate vs. operating company — keep the stacks separate
Bridge files clear faster when sponsors present:
| Stack | Documents |
|---|---|
| Real estate | Purchase contract, appraisal, survey, Phase I, entity owning title |
| License | State/local license packet, transfer rules, local zoning compliance |
| Occupancy | Lease or affiliate lease at market rent, security plan, CO for use |
| Exit | Named takeout conversations or sale comps for similar licensed RE |
Blurring ops P&L into the mortgage without a lease structure is the most common reason cannabis real estate files stall in underwriting.
If the cash need is payroll, security, packaging, or a merchant cash advance rather than the deed, that is unsecured loans for cannabis businesses — a separate application on this site, not this bridge.
Security and insurance CapEx bands (illustrative)
| Item | Why it hits LTC |
|---|---|
| Cameras / access control / vault | License and insurer requirements |
| Odor / HVAC filtration (grow) | Neighbor and municipal compliance |
| Electrical service upgrade | Grow and processing power loads |
| Specialty property insurance | Higher premiums than vanilla industrial |
Budget these before locking purchase price — they are not “soft” afterthoughts.
How this differs from vanilla industrial bridge
| Industrial NNN | Cannabis-tenant RE | |
|---|---|---|
| Takeout pool | Bank / CMBS deep | Narrow — private credit common |
| Leverage | 65%–75% typical | Often 55%–65% |
| Diligence | Phase I, clear height | License + security + power |
| Rent proof | Standard lease | Cannabis clauses + transfer risk |
Start with industrial warehouse loans for shell and lease metrics, then layer cannabis-specific license and security diligence from the sections above.
Underwriting mistakes sponsors make
- Pitching plant revenue as if it were NOI without a real-estate lease
- Ignoring local buffer zones from schools and parks
- Underestimating security and insurance CapEx
- Assuming a standard industrial bank refi will clear at maturity
- Closing on a building before confirming cultivation or retail use is allowed at that address
Federal schedule still sits under the lease
Marihuana remains on Schedule I of the Controlled Substances Act. 21 U.S.C. § 812 lists it with substances that, in the statute’s words, have a high potential for abuse and no currently accepted medical use in treatment in the United States. State licenses do not rewrite that federal list.
Banks that touch the rent or the sale proceeds still look at FinCEN’s 2014 guidance, FIN-2014-G001, issued February 14, 2014. That guidance says the Act makes it illegal under federal law to manufacture, distribute, or dispense marijuana. It also tells a financial institution to verify that the business is licensed with the state, to read the license file, and to keep monitoring public information. A bridge file that cannot produce the license packet will not clear that diligence, even when the appraisal looks ordinary.
Do not model an SBA guaranty as the exit. The 7(a) and 504 programs serve eligible operating businesses, and marijuana is still listed on Schedule I. Unless a lender has already confirmed this tenant in writing, plan the exit as private credit, a credit union that will take the file, or a cash sale. Name that exit in the application.
What to pull from the license file before escrow
| Question | Why it changes the loan |
|---|---|
| Can the license move to this address, or is it site-specific? | A building without a transferable license is industrial shell only |
| Who must approve a change of ownership? | A 90-day state review can outlast a short bridge |
| What buffer applies to schools, parks, or homes? | A compliant building on the wrong block fails at inspection |
| Does the local permit expire if operations pause? | A dark period during buildout can void the license |
| Is the operator the tenant, or an affiliate of the borrower? | Affiliate rent needs a real lease, not a journal entry |
Bring the state denial letter too, if one exists on a prior address. Lenders read those.
Power, certificate of occupancy, and draw order
Indoor cultivation fails on amps more often than on square footage. Ask the utility for a written load letter before you waive contingencies. Split the budget into a shell close and later draws.
Illustration, not a quote. A 22,000 square foot industrial bay is under contract at $1,850,000. The utility letter says the building has 400 amps and the cultivation plan needs 1,600. The upgrade quote is $640,000, with a seven-month utility timeline. Security, odor control, and rooms are another $480,000.
| Line | Amount |
|---|---|
| Shell purchase | $1,850,000 |
| Electrical upgrade | $640,000 |
| Rooms, HVAC, security | $480,000 |
| Interest reserve, 18 months | $210,000 |
| Total cost | $3,180,000 |
| Bridge at 60% of cost | $1,908,000 |
| Sponsor equity | $1,272,000 |
Do not fund the room build before the utility date is in writing. Jaken Finance Group bridge loans are 8.99%–13.5% interest-only for 12–24 months, and a complete bridge file can close in 7–10 business days. The electrical upgrade, not the closing calendar, is usually the long pole.
Insurance and security are loan proceeds, not leftovers
Cameras, access control, a vault, and odor filtration are license conditions and insurer conditions. Put them in the sources-and-uses. A premium that is triple a normal industrial quote belongs in the interest-reserve conversation, because it hits the tenant’s ability to pay rent.
If the operator’s bank will not accept rent payments, the lease should say how rent moves. Cash rent that cannot be documented is not NOI. Keep operating expenses, payroll, and plant inventory off this deed. Those needs belong on unsecured loans for cannabis businesses, which is a different application.
A sale-leaseback still needs a real rent
Some sponsors want to sell the building to a new owner and lease it back. The deed can move. The license may not. Confirm the change-of-ownership rule before you set a closing date. The new lease should state base rent, term, who pays taxes and insurance, and what happens if the license is suspended.
Illustration. The operator sells an industrial shell for $2,100,000 and signs a ten-year absolute net lease at $210,000 a year. That is a 10% rent-to-price ratio on the example, before you decide whether the rent is supportable. A bridge at 60% of price is $1,260,000. At 12% interest-only, the annual interest is $151,200. The $210,000 rent covers that interest with room for taxes if the lease is truly absolute net. If the tenant can offset rent with a related-party credit, the coverage is fiction. Underwrite the lease a third party would pay, and name the takeout before the bridge is drawn.
Related financing guides
- Industrial warehouse property loans
- Special-use commercial property loans
- Retail strip center loans
- Commercial property loans by asset class
Get approved · Commercial real estate financing · Submit scenario · (833) 264-7776
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. Cannabis-related real estate is evaluated deal-by-deal where state licensing and collateral support the file. Jaken Finance Group does not finance illegal activity. All loans are subject to full underwriting.