Cannabis regulators are responsible for providing transparency and compliance within the cannabis industry to ensure the health and safety of the public are a top priority. They use the powers of oversight, rule-making, and enforcement to ensure the legal cannabis industry in their state is operating by the rules. They may also partner with the industry, working with licensees and regulatory affairs professionals to identify challenges and create solutions that will improve the marketplace for businesses, investors, and consumers.
Debt financing is the predominant source of funding for the cannabis industry to expand and improve on operations. From the regulator’s perspective, there are two key challenges that exist in the debt financing model:
- Lack of transparency into the capital funding the industry, as most agencies do not have the resources or capacity to take a deep dive into the creditor’s financing the industry.
- Inability for creditors to legally collateralize licenses without the appropriate suitability investigations required by regulators, creating a higher cost of capital for licensees and potentially leading to legal challenges that can end up in receiverships and court battles.
CTrust’s solution for regulators creates a framework they can trust by expanding oversight and transparency into capital and the health of the industry in their jurisdiction, while reducing the time and resources required to evaluate and monitor the activities of licensees borrowing the capital.