Cannabis Rescheduling And Credit Risk: What Industry Insiders Are Saying
“Rescheduling will definitely help… but it’s not like Bank of America is going to step into lending to cannabis as soon as rescheduling happens,” said Joseph Lustberg, CEO of Upwise Capital at the recent Benzinga Cannabis Capital Conference in Chicago.
As cannabis rescheduling to Schedule III inches closer, industry leaders gathered to discuss the potential benefits and limitations of this change, during a panel called: “Credit Risk and Rescheduling: The Impact on Cannabis Company Borrowing.”
See Also: EXCLUSIVE: Only 27% Of Cannabis Businesses Are Profitable, Economist Says
The panel, moderated by Stacy Litke, VP of Banking Programs at Green Check Verified, covered various aspects of rescheduling from credit risk and lending to competition from larger players.
Credit Risk And Capital Access: Slow Changes On The Horizon
Litke began by addressing the industry’s hopes regarding how rescheduling could reduce borrowing costs and increase access to capital.
She prompted Lustberg to share his thoughts on how rescheduling might influence lending. Lustberg, whose company deals with about a hundred lenders in cannabis, acknowledged the potential benefits but stressed, “Rescheduling will help… but the same lenders will still be in the space.”
Dan Neville, CEO of Advanced Flower Capital Inc., joined the conversation, agreeing that rescheduling is “credit positive” but warned about the high levels of leverage in the cannabis industry.
“There’s a decent amount of leverage, and while some companies can grow into it, it’s still a federally illegal business …