PICKNEY, MI. – Michigan’s battered cannabis market is creating opportunities for stronger operators to acquire distressed dispensaries, cultivation facilities, processing operations and cannabis real estate at prices that would have been difficult to imagine several years ago. Meanwhile, Ohio’s rapidly developing adult-use market is creating a different challenge: operators need capital to acquire businesses, expand locations and build the infrastructure needed to compete in a growing market.
The common denominator is money.
Cannabis remains difficult to finance through conventional banking channels because marijuana remains federally restricted. That can leave otherwise profitable operators struggling to obtain the capital needed to complete acquisitions or expand their businesses.
Genus Credit Services says private lenders may provide another route.
The Pinckney, Michigan-based financial services company works with private capital sources willing to consider cannabis transactions that many conventional lenders will not.
For Michigan and Ohio cannabis operators, that could become increasingly important as the two markets move through very different stages of development.
Michigan: Distress Creates Acquisition Opportunities
Michigan has become one of America’s most competitive cannabis markets.
Retail marijuana sales remain substantial, but extremely low cannabis prices, intense competition and the state’s new 24% wholesale marijuana tax have increased pressure on operators.
Michigan’s 24% wholesale marijuana tax took effect Jan. 1, 2026, adding another expense for an industry already operating on tight margins.
The result is a market increasingly ripe for consolidation.
Some operators are closing. Others are selling licenses, cultivation facilities, processing operations, dispensaries or real estate. Still others may have viable businesses but need capital to restructure debt or improve cash flow.
For financially stronger operators, those problems can create opportunities.
Instead of spending millions of dollars developing a cannabis operation from scratch, an acquiring company may be able to purchase an existing operation containing licenses, equipment, real estate and infrastructure.
But recognizing an opportunity and having enough cash to close the transaction are two different things.
That’s where acquisition financing becomes important.
Genus: Private Capital Can Finance Cannabis Acquisitions
Bill Shaw, Managing Partner of Genus Credit Services, says his company works with private cap lenders interested in two verticals, cannabis and the senior living space.
The reason for the two industries is that lenders structured their businesses to specialize their capabilities to best serve the needs of the borrowers.
According to Genus, financing may potentially be used for:
- Commercial leased back capabilities
- Acquisitions and/or expansion
- Equipment purchases
- Working capital/inventory
Genus says its lending network can consider transactions ranging from roughly $50,000 into multimillion-dollar deals.
What Private Lenders Want To See
Private capital doesn’t mean easy money.
The primary consideration for the lender is the ability of the borrower to service the debt not only initial but on a long term basis.
This means lenders generally are interested in established companies with operating histories, revenue, assets or other evidence demonstrating their ability to support financing.
Collateral can vary significantly by transaction and lender.
Potential collateral may include commercial real estate, paid-for equipment, investment accounts, securities and other business assets.
The borrower’s primary residence generally can be used as an asset on the personal financial statement, (PFS).
Shaw’s advice to companies seeking financing is straightforward:
“If you comply, the deal will fly.”
In other words, companies that can quickly produce financial statements, tax returns, corporate documents, property information and other requested records can make it much easier for lenders to evaluate a transaction.
Distressed Doesn’t Necessarily Mean Worthless
This distinction could become particularly important in Michigan.
A cannabis company can be financially distressed while still owning valuable assets.
A struggling cultivation company, for example, could possess a building, sophisticated growing equipment, electrical infrastructure and a cannabis license.
A retailer could have a desirable location, establish customer base and municipal approval but lack the capital necessary to continue competing.
Those assets could have considerably different values in the hands of a stronger operator.
That creates the classic consolidation-market opportunity: stronger businesses acquire assets from weaker competitors and combine them into larger operations.
Private financing can potentially provide the bridge between identifying those assets and acquiring them.
Ohio Presents The Opposite Opportunity
Ohio’s cannabis market presents a different financing story.
Rather than primarily looking for distressed assets, companies are positioning themselves for expansion as the state’s adult-use cannabis industry develops.
Large transactions are already demonstrating the appetite for Ohio cannabis assets.
In July, Vireo Growth announced agreements involving four Ohio cannabis businesses representing eight dispensaries along with cultivation, processing and associated real estate. The company valued the aggregate purchase consideration at approximately $208 million.
Most independent Ohio cannabis companies aren’t contemplating transactions anywhere near that size.
But the underlying business challenge is similar.
Operators may need capital to acquire additional locations, expand cultivation, purchase real estate, upgrade equipment or buy competitors.
And unlike a startup cannabis market, some Ohio operators already have years of operating history because they previously participated in the state’s medical marijuana program.
That operating history can matter when lenders evaluate a borrower.
A Potential Midwest Cannabis Deal Market
Michigan and Ohio could therefore produce two complementary cannabis investment markets.
Michigan has mature infrastructure, experienced operators and potentially distressed businesses and real estate available for acquisition.
Ohio has a younger adult-use cannabis market where operators are looking for capital to grow.
Investors and cannabis companies could increasingly look across the state line.
A successful Michigan operator could potentially acquire assets in Ohio. An Ohio company could examine Michigan assets selling at depressed valuations. Existing multistate operators could consolidate businesses in both states.
The missing ingredient in many of those transactions will be financing.
Traditional banks still don’t provide cannabis companies the same access to commercial credit enjoyed by most other legal industries.
Private lenders are trying to fill that gap.
Before Shopping For A Deal, Find Out What You Can Finance
That suggests cannabis operators considering acquisitions may want to reverse the traditional process.
Instead of finding a company to buy and then scrambling to finance it, an operator can determine beforehand approximately how much capital it could qualify for.
A prospective buyer could assemble its financial statements, tax returns, collateral information and acquisition strategy and have Genus examine the transaction with its private lending network.
If financing appears possible, the buyer then knows roughly what size acquisition it can pursue.
That could become increasingly valuable as Michigan’s cannabis consolidation accelerates and Ohio’s market expands.
There may be no shortage of cannabis businesses available to buy.
The bigger question could be:
Who has the capital to buy them?
Cannabis Operators Seeking Financing
Genus Credit Services works with established cannabis companies seeking private financing for acquisitions, commercial real estate, expansion, equipment, inventory and working capital.
Financing is subject to underwriting, borrower qualifications, collateral requirements and lender approval.
For more information, call Bill Shaw at 810-423-1420
Editor’s Note: Genus Credit Services is a sponsor of MITechNews.Com.
