Businesses entering or expanding their scope within the marijuana sector have to consider acquisitions as their main strategy; however, sellers need to be ready to pounce on such opportunities.
Proprietors who desire to leave the hemp industry or merge with bigger conglomerates have to:
- Show how the purchase benefits the customer
- Consider consulting a broker
- Prepare accurate financial details for in-depth analysis
A prospective acquisition target must be willing to vet its buyer and think about how the transition process upon the contract’s closure.
Ryan George (founder of CannabisMLS.com, 420Property.com, and various other cannabis sites) said that selling a business requires intensive prerequisite work.
He added that Companies can start the process by ensuring they have prepared their paperwork and financials. They should also collect information about intellectual property, like marketing materials and patents.
In August, Ryan’s sites got 250,000 views and had 30,000 users. He expects these numbers to grow to 350,000 page views every month and 50,000 users by 31st December 2021 due to the state’s authorization of marijuana sales and cannabis retailers as essential amid the coronavirus pandemic.
On 8th September, Columbia Care (a multistate operator with headquarters in New York) announced its purchase of Project Cannabis for $69 million. Project Cannabis is a cannabis company based in Los Angeles and vertically operated.
During the same month, the New York-based firm also disclosed that it had finished its acquisition of Colorado’s biggest vertically operated operator (The Green Solution) for $140 million. The acquisition was initially disclosed on 5th November 2019.
Columbia Care’s CEO, Nicholas Vita, said that the firm goes through an internally-motivated process to analyze whether a firm’s acquisition strategy makes sense.
Business proprietors should consider what their responsibility would be after selling their firm.
Client Sheer, one of the brokers at Cannabis Business Brokers, said that workers need to be advised about a business sale.