Are you looking to get out of the marijuana business?

Whatever your reasons may be (we certainly don’t judge), now is a good time to do it. The market is hot. But if you don’t want to get bamboozled, you’ll need to take certain steps to sell your cannabis business

Many companies are using acquisitions as a key strategy for entering or expanding their reach in the industry – but they’re going to look at how you measure up.

So here’s what you need to do.

  1. Set up a Way to Share Financial Info

It may sound like a drag, but you’re going to need to open your books for potential buyers. Gather up all your documentation on payroll, tax returns, inventory, leases, vendor lists, and licenses and set up a Dropbox folder (or something similar) that will allow you to share this info.

Buyers will insist on reviewing all of your financial information as well as a profit and loss statement and a balance sheet to determine your valuation amount. So be ready to explain how you landed at certain figures.

  1. Be Aware of What Else Buyers Want to See

The financial info is just the beginning.

Most companies will use a highly internally driven process to determine whether buying your company is a sound business decision. They will focus on your resources/assets, corporate/financial ethos, business strategy, and the strength of the your leaders and employees.

They’ll also be interested in your supplier list and customer base, as well as whether you have instituted procedures to follow compliance regulations.

If you’re hoping to be acquired by larger conglomerates, you should strongly consider creating a presentation deck that covers all of these bases. It will position you well.

  1. Hire a Broker

If you’re already reeling at the idea of tackling the above steps and wondering how you’re going to handle the day-to-day process of selling a business on top of all of that, then hire a broker.

It’s an investment that will pay for itself. A broker will ensure you stay on top of everything while helping you navigate the entire selling process. This includes overseeing your marketing, listing to your network and on third-party websites, vetting and negotiating potential buyers, and dealing with inquires.

The good news is, just as it’s possible to find cannabis marketing specialists, there’s a growing list of brokers who work specifically in the industry as well.

  1. Have a Transition Plan in Place

In other words, don’t screw over your employees. Don’t be that guy (or gal). Having employees find out you’re selling the business via listings or other methods is going to tank morale.

That’s not going to go over well when potential buyers start walking through. So give some serious thought to what role both you and your staff will play once the business is sold. Encourage buyers to retain staff or offer severance packages if this isn’t possible.

Some employees may want to keep their positions permanently or only for the transition period. Others may choose to become investors or advisers.

Whatever the case, you need to be completely transparent with your employees. If you’re nervous about sharing the info, ask workers to sign an NDA to keep potential deals from becoming public info.

  1. Create a Due Diligence Folder

Buyers are going to be most interested in companies that have a high annual revenue. But if you have a unique product or angle that their resources can help to bolster, that will be of interest as well. “

So put together a due-diligence folder for the buyer that contains critical information about your business. Add a presentation deck that showcases  any unique selling propositions. Doing this will give potential buyers insight into your target demographic, as well as data about your customer’s buying habits so they can innovate to meet demands.

The Steps to Sell Your Cannabis Business Matter

Following the above steps to sell your cannabis business is going to garner the most successful transaction. So don’t skip any of them.

And if you’re in the market for buying a new marijuana business and curious about successful marketing strategies, contact us for a free consultation.

We have the skills, know-how, and experience to help you shine in this saturated market.