
Without access to traditional financing and with inconsistent cash flow, operators quickly get frustrated trying to scale with cartridge-filling equipment.
They often know it’s exactly what they need to grow, but all face the same question when purchasing: buy, lease, or finance?
When it comes to cannabis equipment leasing, not all companies are created equal. So, before you enter into a cannabis equipment loan or begin to explore cannabis equipment financing, there are a few things to know to navigate the industry successfully.
In this guide, we’ll cover the debate over whether to buy or lease cartridge filling equipment and how adding it to your fleet can support your operation.
Why Operators Turn to Cannabis Equipment Leasing
Despite operating in an industry responsible for producing $8 billion in vape sales from 2025 to 2026, thanks to regulatory challenges, many cannabis operators are cash poor. This makes executing capital expenditures like purchasing cannabis equipment that much more difficult.
Even 14 years after legalization in some states, operators are still subject to IRS code 280E. Because cannabis remains a Schedule I controlled substance, this federal code prevents cannabis businesses from deducting many ordinary and necessary operating expenses from their federal taxable income, significantly increasing their effective tax burden.
Making matters worse, without the opportunity to take advantage of SBA-backed loans, many operations feel hopeless when seeking cannabis equipment loans. Fortunately, as the industry matures, so does its availability of cannabis-specific lenders and cannabis equipment leasing companies filling that gap.
How to Choose Which is Right for Your Operation: Buy, Lease, or Finance

When a piece of equipment is a necessity for the growth and longevity of your company, there’s no question that you need it. The only question is whether you should buy, lease, or explore cannabis equipment financing.
Next, we’ll cover what’s right for individual operations, depending on cash flow, growth stage, and tax posture.
Paying Cash: When Buying Outright Makes Sense.
Paying cash makes the most sense for operators who can afford it. Purchasing outright is often the most cost-effective way to acquire equipment over its full life. The advantages of doing so are simple:
- No interest or financing fees
- Immediate ownership
- No monthly payment competing with cash flow
Of course, not every operation can afford the cost outright. That means paying in cash for cannabis equipment is best for established operators with a healthy cash reserve and enough working capital that the purchase won’t constrain day-to-day operations.
Another consideration, even for established brands, is Section 179. While manufacturing equipment often falls within the type of machinery that can qualify for Section 179, Section 280E makes it complicated for cannabis businesses to take advantage of the tax benefit.
For eligible businesses, however, Section 179 can materially change the after-tax cost of equipment. Before buying equipment in cash, check with your CPA to see how the benefit applies under your specific 280E and accounting.
Leasing Your Cartridge Filling Line
Cannabis equipment leasing is another option to scale volume and lower the upfront barrier to entry. However, over time you will typically pay more in financing fees and interest rates in exchange for preserving cash and gaining flexibility today.
Leasing provides start-ups and early-stage companies with predictable monthly payments and preserves working capital for payroll, inventory, packaging, and other expenses. In many cases, the labor savings and additional production capacity equipment can generate will outweigh its monthly payment.
That means if you’re a growing operation with the sales to benefit from additional product capacity now but would rather preserve cash, leasing is a viable option to consider. It can also offer operators an easier upgrade path as production volume increases or when you need to scale up equipment.
When leasing cartridge filling equipment, keep a few things in mind. For instance, depending on the lease structure, you may not own the equipment at the end of the term, so it’s wise to compare lease terms from vendor to vendor.
Cannabis Equipment Financing and Loans: What’s Actually Available
Lastly, despite traditional loans being out of the question for most cannabis businesses, cannabis equipment financing does exist. However, operators generally have fewer options than in federally legal industries, and financing terms are typically much more expensive.
To fill the void left by SBA-backed loans and traditional lenders, specialty cannabis lenders, alternative commercial lenders, and equipment financing companies are helping operators finance the equipment they need to scale.
One important caveat: rates are typically much higher than conventional bank financing because lenders take on additional industry and regulatory risk. While requirements vary by lender, underwriting for cannabis equipment financing often considers:
- Personal credit score
- Time in business
- Revenue and cash flow
- Bank statements and financial records
- Cannabis licensing/compliance
- Value of the equipment being financed
Businesses with stronger credit and a longer operating history will get better financing options and rates than newer businesses. As general benchmarks, equipment lenders will consider operations with six months or more in operation and credit scores around 600, but the strongest terms go to businesses with two or more years of operation and stronger credit.
This means cannabis equipment financing is an acceptable middle ground for established operators who want to protect a healthy cash reserve while making predictable monthly payments and owning the equipment at the end.
Keep in mind, however, like leasing, the equipment itself is often used as collateral, meaning the lender may place a lien on the machine until the loan is repaid
A Quick Framework for Deciding
To help you weigh your options, take a quick look at our decision guide for your best fit.
| Operator Profile | Best Fit | Why It Makes Sense | Main Tradeoff |
| Cash-rich / established | Buy outright | Lowest total acquisition cost, immediate ownership, no monthly payment | Uses the most cash upfront and can reduce working capital |
| Growth-stage / early-stage | Lease | Lower upfront cost, predictable payments, preserves cash for payroll, inventory, and growth | Typically costs more over time and ownership depends on lease terms |
| Established but cash-conscious | Finance | Preserves cash while still providing a path to ownership | Higher rates than conventional financing and may require a lien on the equipment |
| Rapidly scaling / multi-state | Lease or finance | Makes it easier to add capacity across facilities without tying up large amounts of capital at once | Multiple payments and financing costs can add up as the equipment fleet grows |
Buy vs. Lease Equipment Cannabis: The Final Word
All in all, operators who take control of their capital expenditure strategy early in the game scale without giving up equity or flexibility later.
In this guide, you’ve learned more about cannabis equipment leasing and all the factors to consider to determine what’s right for you: buy vs. lease equipment in cannabis.
If you’ve made up your mind and are ready to move forward in scaling your operation, explore Vape-Jet’s fleet of cannabis cartridge filling equipment or get in touch with our team to learn more.
Frequently Asked Questions: Cannabis Equipment Leasing
– Can cannabis businesses get SBA loans for equipment?
Cannabis businesses aren’t typically able to access SBA-backed loans for equipment due to marijuana remaining a Schedule I controlled substance. Because SBA lending programs follow federal requirements, state-licensed operators typically must seek cannabis equipment financing from private or alternative lenders.
– Is leasing cartridge filling equipment tax deductible?
Normally, leasing payments for business equipment may qualify as a tax-deductible expense; however, IRS code 280E complicates this for cannabis cartridge filling equipment. Tax treatment depends on how the equipment and payments are classified and allocated under applicable tax rules, so cannabis operators should confirm deductibility with a cannabis-experienced CPA or tax attorney.
– What credit score or time in business do lenders typically want for cannabis equipment financing?
Credit score and time in business requirements vary by lender for cannabis equipment financing. Some lenders may look at personal and business credit, revenue, cash flow/debt-service coverage, existing debt, time in business, the equipment being financed, and sometimes personal guarantees.
– Is it better to buy or lease a filling machine?
Whether buying or leasing a filling machine is better for your operation depends heavily on cash flow, expected equipment usage, financing terms, and how quickly the operation expects to scale. Buying makes sense for operators that want to own the asset outright, while leasing can make more sense when an operator wants to preserve cash.
– Do cannabis equipment lenders require a lien on the machine itself?
Cannabis equipment lenders often require a lien on the machine, since the purchased equipment serves as collateral for the loan. The lender may file a UCC-1 financing statement establishing its security interest in the equipment, so if the borrower defaults, that security interest can give the lender the right to repossess the financed equipment. However, collateral requirements vary by lender.





























