Selling a cannabis business isn’t as simple as distributing a press release announcing your intentions. The marijuana industry operates differently than other sectors because it has significant legal and regulatory challenges. So executives who are thinking about cashing in on a business license must go the extra mile to develop a sales plan.
Seattle-based broker Justin Costello, CEO of GRN Funds, is shopping an unusual package: 12 retail marijuana businesses in Washington state. The asking price starts at $60 million.
In an interview with Marijuana Business Magazine, he spoke about valuation, how potential sellers can target and attract buyers and investors. He also highlighted the red flags to look for in any potential buyer.
How can a business looking to sell gain the confidence of a mainstream buyer or investor?
Due diligence and auditing the business is very important. Any savvy professional investor is going to want to see that a third party has done due diligence and auditing of the business. Potential buyers are going to critique a companies business model, financials, valuation, and forecast and usually they’re not going to take the seller’s word for it.
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