Marijuana Business Factbook 2019

283 Cannabis Business Funding & Investing | Chapter 7 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. MJBIZDAILY.COM CHART 7.09: Source Of Capital To Launch: Operational Cannabis Businesses Based In The U.S. Note: Multiple-choice question; respondent total may be greater than 100%. Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Source Of Capital To Launch: Operational Cannabis Businesses Based In The U.S. Founders' Own Savings/Personal Debt Friends & Family Investment(s) Running Funds/Profits From A Pre-Existing Company Angel Investor(s) Venture Capital/Private Equity Other Sources Bank Or State Agency Loan 84% 22% 15% 11% 8% 4% 1% Percent Of Businesses Despite increased interest in the marijuana space from investors, the vast majority of cannabis businesses in the United States are privately owned and self-funded by the founders. The figures in the chart above have not changed much from a year ago. Traditional funding sources, such as banks, venture capitalists and angel investors, remain cautious about investing in cannabis businesses. As a result, more than 80% of U.S. cannabis business founders use personal savings and debt ― such as personal loans, home equity loans and debt financing through credit cards ― to get started. These percentages hold regardless of when a cannabis company is well-established or has recently launched. As the industry matures, it becomes increasingly expensive to launch a marijuana business. Going forward, the startup costs associated with a marijuana business are likely to be higher than what can be borrowed from friends and family or financed through home equity or personal savings.