Bespoke Financial, first-ever to provide cannabis operators with a revolving inventory line of credit
By Edlyn Cardoza
Bespoke Financial, the nation’s first cannabis-focused FinTech lender, has also become the first to provide cannabis operators with a revolving inventory line of credit, allowing companies to achieve a competitive advantage by better managing needed operational expenses while maintaining other financial resources for long-term capital and growth initiatives.
“Businesses in traditional industries have enjoyed access to this tool for decades but until now, cannabis operators were often forced to choose between funding short-term operational expenses and pursuing long-term growth plans,” said George Mancheril, CEO of Bespoke Financial. “This gives operators a significant advantage over their competitors that lack access to flexible financing, and truly puts cannabis operations on a par with modern business practices of more established industries.”
For example, Bespoke Financial recently secured a $5 million inventory line of credit for Claybourne Co., a California-based cannabis company producing several of the state’s most popular flower and pre-roll products. Claybourne’s plans include expanding their cultivation capacity, an expensive long-term growth investment that could strain the company’s ability to launch new products and maintain production to meet sales. The flexibility provided through the line of credit is allowing Claybourne to meet current and future long-term needs.
“We have found success in the market by offering a diverse portfolio of products, so that is a core component of our business and expanding those products is key to our continued growth,” said Nick Ortega, CEO of Claybourne Co. “However, we also have significant short-term working capital needs such as labor and utility expenses as we phase on our additional cultivation capacity. The flexibility of this line of credit is something that simply hasn’t been readily available to the cannabis space in the past.”
Businesses need funding to grow. But with federal prohibition still the law of the land and differing regulations from state to state, securing financing is difficult if not impossible. Conditions in the cannabis industry make it challenging for businesses to even demonstrate good credit, and credit companies still shun the industry. But the inventory line of credit from Bespoke Financial has allowed Claybourne Co. to launch two new retail products and expand its product line, all while maintaining the ability to pursue its long-term growth plans.
“This ensured we would have the financing as needed, as well as the working capital to scale the business,” Ortega said. “We have been seeking a working capital line of credit for some time but it’s just not readily available to the cannabis space regardless if you are a leading brand or not.”
IBSi Prime News
October 21, 2021
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