When looking to sell a cannabis brand or dispensary, business owners can do several things to appeal to potential buyers and ensure they receive the maximum purchase price for their assets. Here, Sabas Carrillo, CEO of Adnant Consulting, offers tips to maximize a company’s value, from ensuring the legal and accounting side of the business is in good standing to maintaining a well-kept facility and team.
1. Get your financial house in order.
The first thing a company should do when looking to sell its assets is ensure that its due diligence packet is complete and ready to present to potential buyers, Carrillo says. This should include copies of the business’ licenses, tax returns, financial statements, regulatory filing requirements and any other documentation that proves that the company is operating in good standing.
“You want to make sure you have your financial house in order, that you have a clean set of books and especially that you’ve been audited,” Carrillo says. “You don’t have to go spending half a million dollars on an audit, but definitely you should consider getting your financial statements audited because through that process, you will become more organized and, frankly speaking, most of the large companies that are targeting smaller- and medium-sized companies for acquisitions, that is the first thing that they ask for—audited financial statements—because a lot of these acquisitions are getting valued on multiples of revenue or multiples of EBITA. If your revenue is in question, your acquisition is going to be delayed while you go do your audit.”
A seller will mitigate and minimize risk to the buyer by having an audit completed in advance of the transaction, and a solid in-house accounting team or third-party consultant will help the process along, Carrillo adds.
2. Outline a set of basic policies and