If you’re considering going into the hemp industry, you may be wondering what financing you’ll need. Hemp is a very different industry than cannabis. Nonetheless, many of the same restrictions apply.
That said, there is a lot of money in the hemp industry, and the risks are less than for cannabis industries. Here’s how to apply for a hemp loan and some more information about this lucrative industry.
The Legality Of Hemp
Cannabis and products related to them are having a bit of a gold rush right now. In many places, local gas stations and malls are home to CBD vendors.
Some states have legalized cannabis medically, while others have legalized it for recreational use. The hemp and CBD industry have grown for those not interested in using cannabis directly.
CBD can be derived from hemp, but hemp has a wide variety of other uses as well. Paper, clothing, and packaging material are all made from this cheap and strong material.
Why Go Into Hemp?
Hemp has tens of thousands of industrial uses. It is easy and efficient to grow. It can be grown places where other crops don’t do well. Hemp doesn’t have as negative of an impact on the environment as some other crops, like cotton.
Hemp is a very hearty plant that doesn’t need much water or land to grow well. Hemp fiber is naturally resistant to rot, which makes it an excellent option for all kinds of applications where cotton may otherwise be used. Since restrictions on hemp have been reduced, the global hemp industry is rapidly growing.
How Hemp Differs From Cannabis
Hemp is a sister plant to Marijuana. It contains very little THC, which means it doesn’t produce the high that we associate with Marijuana. Hemp is legal to grow, sell, and transport across state lines. It is no longer considered a schedule 1 controlled substance.
If you’re interested in the booming hemp and cannabis industry but don’t want to worry about the Federal regulations around Marijuana, hemp is a great choice.
What Is The Best Way To Get A Hemp Loan?
Hemp is still in a gray area in many ways, despite its important differences from cannabis. Traditional financial institutions may be very hesitant to invest in a hemp business, even if there is no cannabis involved.
For this reason, a financial institution that caters specifically to the Cannabis industry is your best choice for getting a loan for your hemp-related business.
How To Apply For A Hemp Loan
In most ways, applying for a hemp loan is the same as applying for any other loans. The primary difference is that you’ll be applying to a financial institution that caters to the cannabis industry rather than a traditional institution. Here are some things that you can expect to need:
- Credit report, ideally higher than 700
- Three to six months worth of bank statements that show consistent spending and earning habits
- Balance sheets that are up-to-date and show detailed reports of your business expenses, assets, and liabilities
- Income statements that show consistent income over as long a period as possible
- Detailed explanations of your needs for capital
- Important management personnel and active licenses. *May or may not be needed, depending on the lender and the loan*
Get Started With A Hemp Loan
Hemp is a rapidly-growing industry which appears to be quite secure, especially in light of the growing acceptance of cannabis throughout the country. Apply for a hemp loan and get your piece of this extremely lucrative industry. Whether you focus on hemp goods or hemp-derived products like CBD, you can feel confident that this is an investment that will pay off.