MJBizMag January 2021 - 59

Owners looking to sell their cannabis
operations must be prepared before
they can engage and secure a
potential buyer. Acquiring companies
gather information far beyond the
business listing as part of their
due-diligence process. Here are
some considerations for sellers to
keep in mind:
* Put together a due-diligence folder
with critical information about your
business as well as a presentation
deck highlighting your unique
selling propositions and intellectual
property.
Multistate operator
Columbia Care announced
a deal to purchase Project
Cannabis in Los Angeles.
Courtesy Photo
A
cquisitions remain a key strategy
for companies looking to enter
or expand their reach within the
cannabis industry, but sellers must be
ready to seize such opportunities.
Owners who would like to exit
the marijuana space or join larger
conglomerates should be ready to:
* Decide whether to engage a broker.
* Ensure their financial information is
ready for close scrutiny during the
due-diligence process.
* Demonstrate how the purchase
would prove valuable to a buyer.
A would-be acquisition target also
must be ready to vet its purchaser
and contemplate how the transition
will play out-including possible new
management-after the deal closes.
" There's a lot of prerequisite work that
goes into putting a business up for sale, " said
Ryan George, founder of California-based
420Property.com, CannabisMLS.com
and other sites that list cannabis
businesses and assets for purchase.
Firms should start the process by
making sure their books and financials
are in order. They also need to gather
* Make sure your financial
information-especially your
balance sheet and profit and loss
statement-are accurate and up
to date. Some buyers might want
these materials audited.
* Consider enlisting a broker to
help navigate the selling process,
including marketing the listing
to their network and on thirdparty
sites, vetting inquiries and
negotiating with interested parties.
* Ensure you are working with a
credible potential buyer by asking
them for documentation proving
they have the funds to purchase
your business. Ask them to sign
a nondisclosure agreement to
keep your sensitive information
confidential.
Nicholas Vita
documentation regarding intellectual
property such as patents and marketing
materials, he said.
George's sites recorded roughly
250,000 views and 30,000 users in
August. He anticipated those numbers
would grow close to 350,000 page views
per month and 50,000 users by the end
of 2020, thanks to new states legalizing
cannabis sales and marijuana retailers
being deemed essential during the
COVID-19 pandemic.
HOW BUYERS
IDENTIFY TARGETS
New York -based multistate operator
Columbia Care announced a deal on
Sept. 8 to purchase Project Cannabis,
a vertically operated marijuana firm in
Los Angeles, for $69 million. The same
month, Columbia Care also announced
it had completed its acquisition of The
Green Solution, Colorado's largest
vertically integrated cannabis operator,
for $140 million. The latter deal was first
announced Nov. 5, 2019.
" The process we go through to
determine whether or not (a deal) makes
sense is very internally driven, " Nicholas
Vita, CEO of Columbia Care, said of
the company's acquisition strategy.
" Everybody has to own the outcome,
and everyone has to own the integration
because, frankly, we all have to work
together going forward. "
January 2021 | mjbizdaily.com 59
http://www.420Property.com http://www.CannabisMLS.com http://www.mjbizdaily.com
MJBizMag January 2021

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