Q/A: Cannabis Banking and Funding (Minnesota Focused) January 23 - REPLAY
Navigating the cannabis industry to secure reliable financing can be challenging. Although many cannabis business owners have discovered alternative solutions, compliance remains a complex issue. Cannabis financing provides the necessary capital to cover expenses such as inventory, equipment, hiring staff, overhead costs, property purchases, and more.



​ZOOM PANEL
Keith Dragisich (LinkedIn)
Market President @ MidCountry Bank
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Ryan Freitas (LinkedIn)
Chief Revenue Officer @ FundCanna
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Dave Woodbeck, MBA (LinkedIn)
Accounting and CFO Services @ DOPE CFO
Bill Gallager (LinkedIn)
Head of Partnerships @ FundCanna
MODERATOR
Matt Carpentier "Carp" (LinkedIn)
Owner/Advisor @ Carpfish Creative
Summary (Summaried with ai, please ignore any minor errors)
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Meeting Attendees and Agenda Overview
Carpfish and Keith discussed the meeting's attendees, who were expected to join in a staggered manner. Carpfish mentioned that some attendees were already present, including Corey Lake from the insurance sector, and others would join later. The meeting's agenda included a high-level overview of the work being done, with a focus on pre-qualifying potential clients. Carpfish also mentioned that some attendees were working and would view the recording later. The meeting was ongoing, with Ryan and Bill expected to join soon.
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Challenges in Cannabis Industry Finance
The meeting focused on the challenges of obtaining finance and banking in the cannabis industry, which is federally illegal. Matt Carpentier, the owner and advisor of Carpfish Creative, moderated the discussion. Keith Dragosic, the market president at Midcountry Bank, shared that his bank is set up to handle deposits for cannabis companies and is tracking compliance through Green Check Verified. He also mentioned that they are interested in lending opportunities, but require a license to be approved for a loan. Dave Woodbeck from Dope Cfo and Ryan and Bill from Fundcanna also participated in the discussion, with the latter linking up with banks and helping businesses explore multiple funding options.
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Keith's Work With Cannabis Clients
Keith discussed his work with various brands, particularly in the cannabis industry, and his role in onboarding new clients. He clarified that his approval process for checking accounts typically takes a couple of hours. Keith also addressed the issue of loan denials, stating that he hadn't encountered any denials yet. He mentioned that they are currently approached by several individuals looking for commercial property loans, but these are contingent on investor approval. Keith emphasized the need for a solid business plan and outside income to support loan payments. Carpfish raised concerns about clients with no business background or assets, and Keith acknowledged that these cases are challenging.
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Cannabis Business Planning and Challenges
Keith and Carpfish discussed the challenges and requirements of starting a business in the cannabis industry. Keith emphasized the importance of knowing one's numbers and having a clear plan for equipment needs and costs. He also mentioned that they are still evaluating loan to value ratios for equipment loans. Carpfish agreed with Keith's points and suggested that potential clients should provide more detailed information in their pitch decks. Both agreed on the need for thorough planning and preparation before starting a business in this industry. Keith also expressed his availability to meet with potential clients outside of regular banking hours.
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Cannabis Industry Challenges and Solutions
Carpfish and Keith discussed the challenges and opportunities in the cannabis industry, particularly in relation to financing and zoning. Keith emphasized the importance of early communication with banks and city planners to avoid potential roadblocks. Carpfish also highlighted the need for insurance and introduced Ryan and Bill from Fundcanna, a financial solutions provider for the cannabis industry. Ryan explained that Fundcanna offers a flexible line of credit for short-term needs, catering to both licensed cannabis businesses and ancillary services. He also expressed excitement about the potential of the Minnesota market and the cannabis beverages category.
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Fundcanna Financing for Cannabis Businesses
Ryan and Bill from Fundcanna discussed the company's role in providing financing for cannabis businesses, particularly in the absence of the Safer Banking Act. They noted that their services are designed to be independent of the Act's implementation and can provide funding regardless of its passage. They also mentioned that they have seen some interesting financing scenarios, such as personal loans and credit card programs, but these are not done at scale. Bill further explained Fundcanna's partnership approach, where they work with banks, accountants, and other service providers to offer short-term working capital products to cannabis businesses. Carpfish introduced Bill's upcoming visit to Minnesota to meet with potential clients and projects. Dave from Dope Cfo also joined the meeting, representing a full-stack accounting and CFO services organization.
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Financial Leadership and Capital Raising
Dave discussed the importance of financial leadership in the industry, emphasizing the need for entrepreneurs to understand their business numbers and assumptions. He also shared an idea for raising capital, which he called a "capital party". This involves inviting friends, family, and acquaintances to a party where they can hear the entrepreneur's pitch and potentially invest. Dave stressed the importance of having a tight, crisp, and energetic presentation. Carpfish added that linking up with a Minnesota celebrity could be another creative way to get financing. Dave concluded by noting that capital is tough to raise in the SMB market, especially for those without established revenue.
Cannabis Industry Financial Constraints
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Dave, Carpfish, Ryan, Bill, and Keith discussed the financial constraints and opportunities for businesses in the cannabis industry. Carpfish asked about the possibility of using revenue from an existing business in another state to fund a new venture in Minnesota, to which Ryan and Bill confirmed that cross-collateralization is possible. They also discussed the potential impact of the federal government's decision to cut $3 trillion in funding on grants and programs. Keith mentioned that their bank, MidCountry, does not charge high fees initially and only applies different fee structures once a business is fully operational. The team also discussed the possibility of using revenue from a cannabis grow store to meet the 6-month revenue requirement.
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Connecting for Answers and Upcoming Events
Carpfish discussed the need for Keith and Nick to connect for answers and mentioned that he would send out a recording of the meeting, along with smaller clips for easier sharing. He also mentioned upcoming events at Lucky Leaf in February and at Earl Giles restaurant and distillery in Minneapolis. Dave confirmed that he had no planned events past February, except for Cannabicon in August. Carpfish also mentioned that he would be working on banking and financing issues, and that he would send out a video copy of the meeting along with links to other resources. He encouraged everyone to get involved in the community and to work together to achieve their goals.
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An online webinar series designed to educate and empower cannabis entrepreneurs in Minnesota. Each session will focus on a critical aspect of launching, managing, and scaling a cannabis business in compliance with state regulations.
Cannabis Business Success: Navigating Minnesota's Emerging Market
Speakers and Panelists
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Legal Experts: Cannabis attorneys specializing in Minnesota law.
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Industry Leaders: Leading Cannabis Vendors as well as successful cannabis business owners.
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Financial Advisors: Specialists in cannabis taxation and funding.
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Marketing Professionals: Experts in branding and advertising in restricted markets.