(Bloomberg) — LeafLink, a wholesale marketplace for cannabis, closed a $250 million credit facility, marking one of the largest debt deals to date as the nascent marijuana industry ventures into the world of financing.

Marijuana stocks rode highs from late 2017 to 2018, as investors sought to enter the budding business that was emerging from prohibition as states relaxed their laws. But the market tumbled over the past year as that optimism faded amid challenges that include a patchwork of state regulations and no access to traditional banking services. This has left the industry, which can’t sell bonds or tap bank loans, starved for access to debt markets.

Doug Gordon, executive vice president of LeafLink Financial, said in a phone interview that the deal is the first to introduce liquidity to the broader market. New York-based LeafLink operates a marketplace for marijuana retailers to buy cannabis products. It already provides some factoring, or trade credit, to facilitate transactions in some areas of the U.S.

“To date, most of the smaller operators haven’t been privy to any debt capital,” Gordon said. “This is the first product that has the ability to inject a large amount of liquidity to serve the industry at large.”

The credit facility shows how cannabis debt deals are structured creatively. The loan, which is from an undisclosed private commercial lender, will be used to expand factoring in areas where it operates, Gordon said.

He estimates that LeafLink currently facilitates transactions by buying around $100 million in accounts receivable per year, but the deal will boost that financing to more than $2.8 billion worth of orders. That represents an estimated 30% of all US wholesale cannabis, according to the company.

LeafLink, which is privately held, declined to disclose other details of the debt facility, citing the agreement’s terms. Lenders have entered the industry with caution, since cannabis technically remains illegal under U.S. federal law.

Cresco Labs Inc. in January announced a loan of up to $200 million from undisclosed lenders, while Acreage Holdings Inc. said it secured $100 million from an undisclosed institutional lender in February.

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