Marijuana Business Factbook 2019

287 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 7.13: Interest Rates Paid & Equity Given By Cannabis Businesses For Prelaunch & Postlaunch Funding Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Interest Rates Paid & Equity Given By Cannabis Businesses For Prelaunch & Postlaunch Funding Median 10% 10% 25% 20% Interest Paid Equity Given Prelaunch Funding Postlaunch Funding Median Launch Equity Given The median interest rate paid on loans by cannabis companies is 10% for both prelaunch and postlaunch funding. This is a higher interest rate than would be paid on a business loan in the traditional economy, but paying a premium on loans is common because of continued federal illegality of marijuana. The median amount of equity granted by cannabis companies in the prelaunch fundraising phase is 25% while the post-funding median is 20%. More equity is given before a company launches likely because the company is not yet generating any revenue, increasing the risk of the investment. A riskier investment allows investors to demand more from the exchange.