CannaCFO Magazine Issue 1 | Page 75

Going into less traveled roads like manufacturing or grows is not only expensivebut risky for these delivery companies. While you can save a lot on products costs, movingup the supply chain takes in-house expertise and significant additional investment ...once again requiring significant cash infusions or loans. Getting loans is another issue within this industry. It seems that if you don’t at all need financing for equipment or a build-out for another location or even working capital, then you can get funding. If you at all need funding, no lenders are looking to finance opportunities based on the economics of industry.

There has to be a better way out of this rat race. Taxes and inventory are eat up any reserves of cash delivery companies seem to have. The only benefit a cannabis delivery company has is Enterprise value. Enterprise value, upon exit, tends to be at least 1 x gross sales or more, depending upon how many portions of the supply chain is controlled.