Legalization efforts at the state level have made the cannabis market one of the biggest growth industries in Massachusetts. Pioneer Valley Extracts — PVx for short — started doing business in 2021 to help meet this growing demand.
Currently, PVx provides manufacturing services such as cannabis extraction, packaging, and distribution, and it also handcrafts its own cannabis chocolates, gummies, pre-rolls, and vapes. The company is passionate about giving more people access to the elevating and healing powers of cannabis. However, to succeed as a cannabis business, it takes more than just passion and new state-of-the-art facilities.
PVx has had to overcome financing problems faced by businesses involved in the legal cannabis industry, especially those rooted in federal law.
PVx Working Capital Constraints and Solutions
At the federal level, cannabis sale and use remain illegal. Moreover, there are strict regulations and complicated reporting requirements for financial institutions that work with the legal cannabis industry, so most banks refuse to collaborate with businesses in the cannabis industry.
As such, PVx decided to seek collaboration from other nontraditional financial institutions to keep free capital flowing and maintain the financial flexibility needed to operate smoothly and meet demand. It turned to Bespoke Financial — a licensed lender that supports manufacturers, retailers, and other members of the legal cannabis industry through unique financing solutions, which fill the void left by traditional lenders.
With Bespoke Financial’s timely assistance, PVx could address some of its pressing problems.
Capital to Purchase Ingredients
As PVx was ramping up its business, it needed a growing amount of ingredients to meet the demand for its products. Essentially, the company needed the flexibility to buy in bulk and pay cash on delivery in order to get the best prices.
Bespoke Financial provides an inventory financing service, which includes direct payments to vendors and flexible repayment terms — exactly what a growing company like PVx needed at the time.
With this service, PVx could purchase raw materials and packaging in bulk, achieving volume based discounts. This initial help proved vital for PVx in that it could start building its inventory without a hitch.
Establishing a Line of Credit
PVx also needed the financial flexibility to make multiple payments at once to cover taxes, make payments to vendors, as well as pay for any other expenses. It found the flexibility it needed with Bespoke’s revolving Line of Credit — allowing PVx to draw down capital as needed to pay expenses while maintaining the ability to quickly jump on good pricing from vendors.
As it grows, PVx has the option of using this line of credit to upgrade its facilities and keep up with technological changes or to expand its operations.
A Partnership Success Story
Thanks to the financing options provided by Bespoke Financial, Pioneer Valley Extracts has been able to grow its business and meet demand by increasing its inventory. It has also gained the increased financial flexibility necessary to improve its business. Today, PVx credits Bespoke for refining its own processes to make their relationship work even better.Don’t let a lack of traditional funding stop you from improving or expanding your operation. If you need help navigating the financial challenges of your cultivating, manufacturing, retail, or ancillary cannabis business, you can explore Bespoke Financial’s various financing solutions, which include not only invoice financing and line of credit but also purchase money financing and inventory financing.