A Jersey City dispensary is listed at $2.8 million. A Passaic County store did roughly $2.2 million in reported sales over the last twelve months. Both owners picture the same closing day: signatures, handshake, and a wire for the whole number.
That is not how these deals get paid for. There is no bank in the room, so the seller is very often the lender. If you end up seller financing a cannabis business in New Jersey, the terms of that note will do more to decide what you actually collect than the price on the front page ever will.
Why there is no bank in your deal
The SBA is closed
The agency's revised lending SOP, effective June 1, 2025, keeps marijuana businesses ineligible for SBA-backed loans — and reaches marijuana-adjacent businesses too: software, hydroponics suppliers, packaging, even service firms with meaningful cannabis revenue. April's rescheduling order, which reached only marijuana under a state medical license, did not reopen that door.
SAFE Banking is still a bill
It returned this Congress as S. 4942 (Merkley, Murkowski, Warren, Daines) and H.R. 9471 (Joyce). A version has passed the House seven times since 2019 and never gotten a Senate floor vote; the high-water mark was a 14–9 Senate Banking Committee vote in 2023.
Private credit prices accordingly
Chicago Atlantic Real Estate Finance reported a gross unlevered weighted-average yield to maturity of 15.8% on roughly $453 million of loan principal across 26 portfolio companies as of June 30, 2026. That is what institutional cannabis debt costs, and a single-location retailer is rarely that lender's customer.
That leaves your buyer's own cash, outside investors, and you.
What seller paper actually looks like here
Every deal is its own animal, but the shape repeats. Cash at closing usually covers half to three-quarters of the price. The balance goes onto a note, commonly two to five years, at a rate that is negotiated rather than quoted — mid-single digits to low double digits, depending on how much risk the seller keeps.
Take this year's most public New Jersey example. When TerrAscend agreed on July 1 to a 35% option in Aunt Mary's Dispensary in Flemington — a Hunterdon County store doing over $10 million annualized — the reported $9 million was structured as a $3 million five-year unsecured convertible note at 6.0% plus $6 million cash on exercise, subject to regulatory approval.
A public operator that could have wired cash chose paper. Read that as permission: being asked to carry a note here is not a verdict on your business. It is the market.
The New Jersey wrinkle: your note has a regulator
- Carrying paper makes you a “financial source.” N.J.A.C. 17:30-1.2 defines one as anyone lending any amount of capital to a licensee who is not an owner, passive investor, or principal. Those agreements go to the CRC's Office of Compliance and Investigations.
- An equity kicker can turn you back into an owner. An “owner” is anyone holding a five percent or greater aggregate interest. Convertible notes, warrants, and profit interests can quietly cross that line.
- There is a two-year lockup on control. N.J.A.C. 17:30-9.3 restricts transferring more than 50 percent of a license holder's ownership interest during its first two years of operations.
- Approval costs money. A transfer-of-ownership application carries a $20,000 fee, and a permit is not assignable without Commission approval.
None of that blocks creative structure. It just means designing it with a cannabis attorney in advance, on a calendar that assumes a regulator reads every page.
What the note gets paid out of
A seller note is only as good as the buyer's after-tax cash flow. Adult-use cannabis remains Schedule I — April's federal order reached only marijuana held under a state medical license — so an adult-use store services your note out of 280E cash flow, not the cash flow on the P&L. Statewide July 2026 sales were $101.2 million at an average item price of $29.83: real revenue, thin after-tax margin. Have your CPA model the buyer's debt-service coverage, not just your proceeds. I am a broker, not an attorney or an accountant, and none of this is legal or tax advice.
- Set your walk-away cash-at-close number before you negotiate price. Price and structure are one conversation, not two.
- Get a personal guarantee from the buyer's principals. A note secured only by the business you just handed over is not security.
- Your collateral is not the license. Take security in equity, equipment, inventory, and receivables, and have counsel paper it.
- Write reporting covenants into the note — monthly P&L, POS and Metrc summaries, proof of tax deposits. Hear about trouble in month three, not thirteen.
- Solve default before closing. If you are financing 40 percent of your own sale, the rate and covenants are your compensation for that risk.
The owners who do badly with seller financing are almost never the ones who agreed to carry paper. They are the ones who agreed to it as an afterthought — end of a long negotiation, tired, structure sketched on the last page of an LOI. By then the leverage is spent on the headline price.
Do it the other way around. Decide what you need in the bank on closing day, decide how much risk you will keep afterward, then talk about the number. A well-structured note on a $2.4 million deal beats an unsecured handshake on a $2.8 million one every time. For why two stores with the same revenue price so differently, see the two New Jersey cannabis markets — and when you are ready to talk structure rather than price, start a confidential conversation.