CANNABIS FINANCE · DEBT SERIES, PART 3 OF 3
By Melissa Diaz, CPA · High Rock Accounting
Here’s a hard truth about cannabis lending. The best time to talk to a lender is before you need one. The worst time is when you’re out of options and out of runway.
I’ve seen both. And the difference in outcomes is huge. Prepared operators get better rates, better terms, and more respect at the table. Desperate ones take whatever they can get (and pay for it).
So let’s talk about how to be the prepared one.
Start with your books. I mean, really start there. Lenders don’t fund vibes. They fund numbers they can trust. If your financials are messy, late, or built on your best guess, you’ve lost before you’ve begun. Clean, current, accurate books are the price of admission. Not a nice-to-have. The ticket in the door.
Next, know your maturity calendar cold. Every loan you have. Every due date. Every covenant, which is just the set of promises you made to your current lenders. You’d be surprised how many operators can’t say when their debt is due off the top of their head. That question comes up in the first ten minutes of any lender meeting. Have the answer ready.
Then, get honest about cash flow. Not just what came in last month. Where it’s headed. Smart operators build three versions of the future: a base case, a slower case, and a stressed case. This shows a lender you’ve thought about what happens if sales dip. It tells them you’re not naive. And it tells them you’ll still make payments when things get tight.
Stop thinking of the lender as a judge. Think of them as a nervous partner. They don’t want your dispensary. They want to be paid back on time and in full.
That mindset shift matters. Your whole job in the meeting is to make them believe repayment will happen. How do you do that? You make your case better than the operator walking in behind you. Because there’s always another operator walking in behind you. Show stronger margins. Show cleaner records. Show that you understand your own numbers better than anyone else in the room. In a tight lending market, being the safe choice is everything.
A few more things worth doing before you sit down.
Separate your core assets from the rest. Know which stores and licenses drive your business, and which ones you could sell if you had to. Lenders like knowing you have options. So should you.
Review your leases, your taxes, and your insurance before the lender does. Surprises in those areas can sink a deal fast. If there’s a problem, find it first and bring a plan for it.
And be realistic about growth. If your pitch depends on doubling revenue next year, a good lender will see through it. Modest, believable projections build more trust than big dreams.
Your pre-meeting checklist
Clean, current books. A full map of every maturity and covenant. Cash-flow models for base, slow, and stressed cases. Leases, taxes, and insurance reviewed. Core and non-core assets sorted. Realistic growth projections.
Now here’s the thing I really want operators to hear: None of this happens the night before your meeting. Investor-ready books take months to build, not days. The maturity map, the cash flow models, the clean lease files, all of it takes lead time. Which is exactly why the work has to start now, long before you need the money.
The good news? Every one of these steps is within your control. You can’t change 280E. You can’t force a bank to open its doors. But you can walk into that room as the most prepared operator they’ll see all week.
That preparation is the cheapest capital you’ll ever raise. It just doesn’t come from a lender. It comes from the work you do before you ever ask. Reach out to High Rock Accounting today to get an honest take on where your books stand and what you need to get them capital ready.
More in this series
Part 1: The Cannabis Debt Wall Is Here
Part 2: Why Cannabis Loans Cost So Much More Than Normal Business Loans
Sources
Lender-readiness steps: map maturities, reforecast cash flow, prepare a financial package, sort core assets: Cannashield
How lenders evaluate borrowers and what they want from a deal: Loanviser
Why passive strategies fail struggling operators: HBK
About the author
Melissa Diaz, CPA is a founding partner at High Rock Accounting, where she leads outsourced accounting and fractional CFO work for cannabis operators. She helps dispensaries and multistate operators build investor-ready books, manage cash flow, and get in front of financing decisions before they turn into emergencies.
Talk to High Rock about your debt position: highrock.co/contact
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