The American Dream of Home Ownership With Cannabis-Related Income

Cannabis grower tending to his crop

The History of Cannabis in The US

During the early to mid-1800s in the United States, cannabis was legal and used primarily for medicinal purposes. As the late 1800s approached, the medical community began to question the efficacy of cannabis, even going as far as recommending that it be categorized alongside regulated narcotics. Around the same time, recreational use began to spread throughout the country as did the movement to regulate it.

The Harrison Act of 1914 declared drug use a crime and shortly thereafter, California became the first state to criminalize cannabis possession. Over the 20-plus years that followed, cannabis possession became illegal in 22 more states, taxation was imposed, and the drug was removed from all government-supported medical and pharmaceutical literature. The government was doing everything it could to stigmatize cannabis and in 1956 it was added to the Federal Narcotics Act – ushering in the age of federal prohibition and control.

In the late 1970s, opinions about cannabis for medical use began to shift at the state level. In 1996 California became the first state to legalize cannabis for use in medical applications. This move paved the way for over 35 other states to allow cannabis use for medical purposes, and in recent years 20+ states and counting have made it legal for adult recreational consumption. With cannabis reform sweeping the nation one state at a time, new business opportunities have emerged. With the spirit of entrepreneurship raging, most parties involved in this growing industry have found it difficult to navigate the financial hurdles of banking, taxation, and credit due to federal laws, which still categorize cannabis as a Schedule 1 illegal substance.

Financial Woes of a Legal Illegal Business

With cannabis still considered illegal federally, financial institutions are reluctant to offer accounts to cannabis businesses because banks are licensed federally and cannot wittingly accept and/or do business with funds that come from federally illegal means. Since these business owners could not establish bank accounts, there are a multitude of other problems like the inability to set up credit card machines, making it a cash business.

With hordes of cash, comes security risks and the need to hire onsite security… but how do you pay them? Since banks are not an option, employees, like the onsite security, are often paid in cash and will receive a 1099 at the end of the year. For the business owner that means a lot of transacting with personal accounts or in cash. The cannabis industry is quite lucrative and those working within have a great opportunity to earn a lot of money, though often under the table.

Cannabis companies must still file and pay federal taxes. Due to the nature of the business, there are fewer deductions because of the product type. Business owners and their CPAs must be creative because the IRS views anything associated with the cultivation and/or sale of cannabis products as trafficking of controlled substances.

Buy The American Dream With Cannabis-Related Income

Business owners and their employees may encounter issues with banking, credit cards, insurance, loans, and investments. Agencies like the Department of Cannabis Control in California offer resources that can be helpful, but options are limited. For situations where in-depth financial scrutiny is required, such as with mortgage lending, services like those offered by provide comprehensive Non-QM (non-qualified) home loans for individuals with legal cannabis-related income.

Non-QM mortgage loans offer borrowers with unique financial circumstances a path to homeownership where traditional lending options are unavailable. Cannabis industry workers can buy homes with nothing more than a 1099, 12-24 months bank statements, or a 12-month CPA-prepared P&L statement to prove income. No W2s or tax returns are required, though they are also accepted. With loan amounts up to $3MM, cannabis industry workers can expect to qualify for a great home loan and rest at ease knowing that they have achieved the American dream!

To learn more about qualifying for a mortgage with legal cannabis-related income – Click Here to inquire online or call (877) 329-7960.