Full suite of Farm Credit Canada’s financial lifelines open to cannabis businesses

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Farm Credit Canada; cannabis, Full suite of Farm Credit Canada’s financial lifelines open to cannabis businesses

Farm Credit Canada (FCC), a government-owned agricultural lender, says the full suite of its lending products is available to legal cannabis producers across the country – ensuring operators have access to the capital they need to overcome any short-term cash-flow challenges.

While the lending products are not tied to the COVID-19 pandemic, any liquidity offered through FCC could be helpful for cannabis companies feeling the widespread economic and financial fallout from the virus.

Many of Canada’s regulated marijuana companies were already strapped for cash before the pandemic put the brakes on the global economy.

The Regina, Saskatchewan-based Crown corporation told Marijuana Business Daily it will consider loan applications from all federally licensed producers of cannabis, whether they’re producing for the regulated medical, adult-use or hemp markets.

“If a business is struggling from circumstances beyond its control, we can look at a variety of options to address short-term cash-flow issues,” FCC spokesman Trevor Sutter told MJBizDaily.

“But we urge the business owner to connect with our relationship manager sooner than later, so more options might be available.”

FCC added in an email: “This is a prudent approach, since licensed producers operate under strict standards.”

To date, the agency has serviced a small number of cannabis producers.

Loan products

Farm Credit Canada has a large number of loan products, but the ones that might be most relevant for cannabis producers is:

  • FCC credit line: This financial product gives producers immediate access to short-term capital, up to a maximum of 150,000 Canadian dollars ($103,000) to finance operating expenses, including for fuel, fertilizer, seed and feed.

“It also serves as a preapproved, revolving loan that can be tailored to individual production cycles,” Sutter said.

He said that under FCC’s credit line, short-term, interest-only payments are also available.

Farm Credit Canada recently extended its crop input loan payment date to April 15 to provide producers an extended marketing and repayment period.

It also gives producers an additional month to repay their input loan without a higher interest rate.

  • Flexi-loans: These are also available to producers, which help businesses adjust payment schedules to address short-term financial needs.

Sutter said FCC will consider deferring principal payments, as well as making other loan payment-schedule amendments, to reduce the financial pressure these pronounced circumstances can create.

“FCC continues to consult with industry stakeholders in exploring other options to provide additional support to Canada’s agriculture and food sector,” he added.

Other loan products can be found here.


Eligibility for the financial products is weighed on a case-by-case basis, as the lender does for all its customers.

Before filing a loan application, all cannabis customers are required to possess a Health Canada license for cultivation or sale.

“FCC has an eye to the long-term success of our customers and the industry,” Sutter said. “We have a well-established enterprise risk management process designed to identify potential events that may affect business operations.”

The agency will also consider reimbursing producers for the cost of some construction.

Farm Credit Canada provides financing to reimburse cannabis producers for up to 50% of the cost of construction after the project is completed and they have received their cultivation license, Sutter said.

New loans are usually amortized over a seven- to 10-year period.

FCC has 97 offices across Canada, and its lending portfolio totals some CA$38 billion.

That’s about one-third of the lending capacity for agriculture businesses in Canada.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at mattl@mjbizdaily.com.