# Cannabis Equipment Financing Fundamentals Canonical URL: https://fundmyequipment.com/learn/cannabis-equipment-financing-fundamentals/ Last modified: 2026-05-29T19:39:17+00:00 Type: efin_guide ## Summary Cannabis Equipment Financing Fundamentals. Comprehensive guide. ## Content Cannabis equipment financing covers cultivation lighting, extraction equipment, processing, and packaging used by state-legal cannabis operators, processors, and dispensaries. Equipment categories and typical financing EquipmentTypical priceUseful life LED cultivation lighting$200-$1500 per fixture7-10 years HVAC for cultivation$50K-$500K per facility15-20 years Extraction equipment (CO2)$100K-$500K10-15 years Trimming machine$20K-$100K10-15 years Packaging line$50K-$300K10-15 years Curing / storage equipment$15K-$100K15-20 years Security and compliance tech$30K-$200K5-10 years Dispensary build-out$300K-$2Mvaries Industry-specific considerations Federal illegality issue. Cannabis is federally illegal. Traditional banks and lenders typically cannot finance cannabis operators directly. SBA programs are unavailable. Specialty lender pool. Cannabis financing is dominated by private credit funds, sale-leaseback specialists, and cannabis-focused finance companies. Rates are significantly higher than mainstream. State-by-state variation. Lender appetite varies by state. Operators in mature markets (CA, CO, OR, WA) have more options than newer markets. Real estate sale-leasebacks. Many operators sell their real estate and lease it back to access capital. Specialty REITs serve this market. Equipment ownership structures. Some structures keep equipment in a separate non-cannabis-touching entity to access mainstream financing. Typical financing terms Rate range: 12% to 24% APR depending on credit tier and equipment age Term: 24 to 60 months Down payment: 0% to 25% depending on credit and equipment SBA eligibility: Limited; some restrictions apply Lender pool Cannabis-specialty lenders: AFC Gamma, Chicago Atlantic, Pelorus Capital, several private credit funds Specialty REITs for real estate-attached equipment: Innovative Industrial Properties, others Equipment sale-leaseback specialists NOT available: SBA, traditional banks, most major equipment finance companies What can go wrong Industry-specific regulatory changes (emissions, licensing, safety) affecting equipment value Customer or contract concentration affecting cash flow Equipment age limits in lender underwriting boxes Seasonal revenue mismatched with monthly payments Inadequate maintenance reserves leading to deferred-service buildup Action steps Identify specific equipment with model and configuration Get quotes from at least one dealer and any captive financer Pull last 6 months of bank statements and 2 years of tax returns Run payment scenarios at different down payments Consider soft-pull prequalification before committing to a specific lender Apply with cannabis equipment specifics in the notes See also our insurance requirements guide and Section 179 strategy for tax planning.