Launched by Connecticut’s Social Equity Council (SEC) and the Department of Economic and Community Development (DECD), the loan programme aims to provide licensed cannabis business owners in the state with financial assistance, particularly, those who have been disproportionately impacted by prohibitionist drug policy.
Applicants that will be eligible for the programme include SEC-approved Social Equity Applicants (SEAs) as well as those with provisional licenses.
However, in order to be eligible the SEA applicant must own 50% or more of an Equity Joint Venture (EJV) or own 65% or more of a cultivator or cannabis business.
Businesses can use the funds for working capital and credit, tech infrastructure, machinery and equipment, leasehold improvements and expansions, environmental costs and more. However, non-eligble expenses include those such as taxes, licensing fees, refinancing, personal loans or business relocation, among others.
The loans will be fixed at prime plus 3% and there will be a 1.50% interest rate discount for applicants that enroll and complete the SEC accelerator programme.
SEC Executive Director, Ginne-Rae Clay, stated: “Access to fair, safe and equitable funding for cannabis businesses is critical to standing up and building strong companies.
“Connecticut is among the first states to offer direct state financial assistance to “budding” cannabis entrepreneurs. Access to capital means one less thing our cannabis supply chain must think about.
“We are excited to announce this loan fund as we continue to provide support and technical assistance that will ensure the success and stability of the social equity cannabis supply chain.”
“This new loan program is vital to helping applicants quickly access the funding they need to get their cannabis operations up and running. It is an important step forward in building Connecticut’s cannabis marketplace and capitalizing on the jobs, investment and many other benefits it will generate in the years ahead,” added SEC Chair and DECD Deputy Commissioner Paul O. Robertson.
“The Canna-Business Revolving Loan Fund is a great example of how the Social Equity Council is working to create new paths to economic empowerment for those living in communities adversely affected by the war on drugs.”
The programme has confirmed that a minimum equity investment of 20% will be required and fixed asset loans will not exceed $500,000, working capital and lines of credit will not exceed $200,000 and vehicle loans will not exceed $500,000.
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