Buying a home is one of the biggest and most exciting purchases that you will make in your lifetime. However, if you work in the cannabis industry, you may have a more difficult time buying a home.
Due to a federal prohibition on cannabis, most mortgage lenders are unable to qualify cannabis industry workers, even if you live in a state that has decriminalized cannabis.
If you happen to be one of these workers, don’t give up hope just yet. Buying a home may still be possible!
What’s Ahead:
Why it’s so hard to get a traditional mortgage if you work in the cannabis industry
Traditional mortgages are not easy to obtain while working in the cannabis industry. Federally, the cannabis industry remains illegal, making any income derived from it illegal in the eyes of the federal government.
Due to this, banks who are Federal Deposit Insurance Corporation, or FDIC, insured are unable to consider cannabis-derived income a valid income stream. If a bank handles money from the cannabis industry, it can be federally charged with money laundering.
How to improve your chances of getting approved
Earning money from a job within the cannabis industry can be limiting when it comes to getting a traditional mortgage. In order to improve your chances of being approved for a mortgage, it is recommended that you live in a state with an established, legal, cannabis industry.
In these states, it may be easier to find a lender who is willing to use your income to provide you with a loan. It is also important to ensure that you have a well documented, stable income stream.
What can you do if you are denied a traditional mortgage?
If you are denied a traditional mortgage, don’t give up quite yet. Your dreams of owning a home don’t have to be over!
Although being denied a traditional mortgage can be discouraging, it is not an end-all.
Cash
Cash is king in the cannabis industry and it might just be one of the best options for cannabis workers looking to purchase a home. While saving up enough to buy a home outright might seem like a lot, it might be less of a headache than looking for alternative lending options.
To save some money, consider purchasing a fixer-upper!
Alternative lenders
Alternative lenders, some even being local credit unions, may sometimes approve loans for workers within the cannabis industry. These lenders are best found in states (like Colorado, for example) that have a long history of legal cannabis.
If you are lucky enough to be approved by an alternative lender, be prepared to pay higher interest rates and fees than a traditional mortgage.
Co-borrowers & co-signers
Co-borrowers are one of the most obvious methods of approval for cannabis industry workers. These co-borrowers are usually spouses who work outside the cannabis industry but are able to be approved for a large enough loan to cover the cost of a house with their income alone.
But know that co-borrowers are as legally bound to repay the loan as the primary borrower and have ownership of the property.
Alternately, finding a cosigner for your mortgage might be the right path. If you find a cosigner for your loan, their income can be considered when applying for a mortgage. Unlike co-borrowers, cosigners typically take on no commitment to actively pay-off the loan and do not take on ownership of the property.
If the primary borrower defaults on the loan, co-signers are held responsible for any remaining payments. If you choose to use a co-signer, it is important to make sure that the co-signer is informed of their responsibilities to the loan.
Cannabis in America
Cannabis has a long, complex history in America. Before we can dive into the cannabis job market, we need to discuss how we got to this point.
Cannabis prohibition
The Drug Enforcement Administration, or DEA, is a federal agency that is responsible for controlling drug distribution and trafficking within the United States. Under the DEA’s classification system, marijuana is considered a schedule one drug. To help you understand what that means, another drug that is schedule one is heroin.
This means that even though marijuana has been legalized medically or recreationally in thirty-three states, it is still considered illegal on a federal level. Marijuana users, even those with medical certifications within their state, can still be prosecuted under federal law.
Jobs in the cannabis industry
Cannabis is a growing industry, on track to be worth $31.4 billion by 2021, and many people are taking advantage of the growing number of jobs the industry has created. Over 211,000 full-time jobs currently exist within the cannabis industry, including positions like:
- Budtender – a knowledgeable staff member who discusses medical and/or recreational cannabis with patients or customers.
- Cannabis Trimmer – a staff member who trims away leaves and stems from cannabis buds, preparing them for processing or sale.
- Cannabis Grower – someone who grows cannabis
- Security Guard – a staff member, or contractor, who ensures a safe environment for workers and customers.
- Edibles Chef – a chef who develops and makes cannabis-infused treats.
- Harvester – a staff member who harvests cannabis plants.
- Cannabis Tester (Quality Control) – a staff member who tests cannabis for potency, cannabinoid makeup, terpene profile, and more.
- Cannabis Courier – someone who delivers, or transports, cannabis.
Where is cannabis legal?
This is always a question that’s on everyone’s mind, so we’ve put together a handy table to show where cannabis is medically and recreationally legal.
| State | Medically legal | Recreationally legal |
|---|---|---|
| Alabama | Yes (CBD only) | No |
| Alaska | Yes | Yes |
| Arizona | Yes | No |
| Arkansas | Yes (Not yet taking patients) | No |
| California | Yes | Yes |
| Colorado | Yes | Yes |
| Connecticut | Yes | No |
| Delaware | Yes | No |
| Florida | Yes | No |
| Georgia | Yes (CBD only) | No |
| Hawaii | Yes | No |
| Idaho | No | No |
| Illinois | Yes | No |
| Indiana | Yes (CBD only) | No |
| Iowa | Yes (CBD only) | No |
| Kansas | No | No |
| Kentucky | Yes (CBD only) | No |
| Louisiana | Yes | No |
| Maine | Yes | Yes |
| Maryland | Yes | No |
| Massachusetts | Yes | Yes |
| Michigan | Yes | Yes |
| Minnesota | Yes | No |
| Mississippi | Yes (CBD only) | No |
| Missouri | Yes | No |
| Montana | Yes | No |
| Nebraska | No | No |
| Nevada | Yes | Yes |
| New Hampshire | Yes | No |
| New Jersey | Yes | No |
| New Mexico | Yes | No |
| New York | Yes | No |
| North Carolina | Yes (CBD only) | No |
| North Dakota | Yes | No |
| Ohio | Yes | No |
| Oklahoma | Yes | No |
| Oregon | Yes | Yes |
| Pennsylvania | Yes | No |
| Rhode Island | Yes | No |
| South Carolina | Yes (CBD only) | No |
| South Dakota | No | No |
| Tennesse | Yes (CBD only) | No |
| Texas | Yes (CBD only) | No |
| Utah | Yes | No |
| Vermont | Yes | Yes |
| Virginia | Yes (CBD only) | No |
| Washington | Yes | Yes |
| Washington D.C. | Yes | Yes |
| West Virginia | Yes | No |
| Wisconsin | Yes | No |
| Wyoming | Yes (CBD only) | No |
Summary
If you are a cannabis industry worker and want to purchase a home, your chances of being approved for a mortgage might seem slim. Luckily, there are still some options for those who are denied a traditional mortgage.
If you have exhausted all measures, remember how far the industry that you are in has come. Cannabis laws are on ballots across the nation and acceptance of the cannabis industry as a legitimate industry continues to grow.