Cannabis Lending Explained: Collateral, Covenants and Fund Structures
Pascal Wagner talks with Peter Sack about lending to cannabis companies, how loan terms and collateral work, and how public and private credit funds compare.
In this interview
Peter Sack explains why cannabis companies have few places to borrow, and why each state is its own market with its own licence rules. He describes how covenants, an owner’s personal promise to repay and a loan’s place in the capital stack shape a lender’s risk, from first lien loans down to common equity. He compares private credit funds with publicly traded mortgage REITs and business development companies, including the trade between price swings and being able to sell. He closes with what to check in any credit fund: the team’s background, its auditor and administrator, and how often its loans fall behind.
Chapters
- Meet Peter Sack
- What Chicago Atlantic does
- Why cannabis is a state-by-state market
- Why most lenders stay out of cannabis
- What legalization would change
- Private funds, public REITs and BDCs
- From first lien loans to common equity
- What to check in a credit fund
The picture is YouTube’s poster for this episode. Published September 11, 2025 by Pascal Wagner, founder of DealStack. DealStack does not rate or recommend firms. Chicago Atlantic does not pay DealStack, so this page is not a paid placement.
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