The prospect of federal rescheduling of cannabis has the lending community buzzing. We recently sat down with Alex Mazza, Director of Underwriting at Chicago Atlantic Group, as well as Michelle Haughton and Bobby Boyda of Needham Bank, to get their take on what rescheduling could mean for borrowers, lenders, and the broader capital markets.
Stronger Borrowers, Bigger Demand
One of the most immediate effects lenders anticipate is a meaningful improvement in borrower credit profiles, particularly for operators with retail operations. With the burden of Section 280E potentially lifting, operators should see more available cash on their balance sheets, thus deepening the pool of eligible borrowers. Mazza emphasized that this will drive increased demand for capital—but crucially, not an immediate increase in capital supply. In his view, new lenders are unlikely to rush into the industry given cannabis’ continued federal illegality and the robust internal processes required to set up a cannabis lending program.