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Joe Lustberg: We'll Find You the Cheapest Cost of Capital

How he helps greenlight construction projects and equipment purchases, the realities of the "cannabis tax," and his new perspective as an operator in New York.

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This week, Joe Lustberg, managing partner of Upwise Capital, joins the Cannabis Equipment News podcast to discuss how he helps greenlight construction projects and equipment purchases, the realities of the "cannabis tax," and his new perspective as an operator in New York.

In 2014, Joe Lustberg was the top sales rep for a large unsecured financing lender. While "secured" financing is tied to collateral like real estate or equipment, "unsecured" financing is based on the company's revenue and is typically viewed as a riskier investment.

Lustberg saw firsthand the lack of access cannabis operators had to capital, so in 2017 he set up his own shop, which he rebranded as Upwise Capital in 2020. Lustberg stresses that he is more than just a "capital guy." He's passionate about the plant and understands the flower. He doesn't just help companies secure financing; he also advises clients to help make sure they are doing the best they can to run profitable businesses.

Upwise Capital is a New York-based platform of about 100 different lending sources, including 38 banks, that procure small business funding. Lustberg says Upwise is the top marketplace for cannabis operators to find financing, particularly for construction projects and equipment financing. He's the middleman who will help operators find the cheapest capital cost for which they qualify.

Lustberg says that until federal legalization passes, the cost of cannabis capital will remain expensive. He admits that there is indeed a "cannabis tax" as rates are typically higher for cannabis businesses. Still, he runs one of the only shops in the space that will execute financing for cannabis startups.

Lustberg has a unique perspective because his business partner (and brother) recently won an operator license in New York. He now sees just how difficult everyday life is for cannabis operators.

Jump around:

  • Why is it still so difficult for cannabis operators to find financing? (5:36)
  • How rescheduling will impact cannabis financing. (7:51)
  • Gaps in cannabis business acumen. (11:16)
  • What you need to fund a cannabis startup. (16:07)
  • Becoming emotionally invested with borrowers. (22:34)
  • His customers that are just killing it right now. (23:49)
  • The state of cannabis in New York. (28:43)
  • Upwise's new partnership with Growcycle. (32:59)
  • A new perspective: Learning how difficult it is to run a cannabis business. (34:31)

Please make sure to like, subscribe and share the podcast. You could also help us out by giving the podcast a positive review. Finally, to email the podcast or suggest a potential guest, you can reach David Mantey at [email protected].

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