The cannabis industry is rapidly growing, and with that growth comes new opportunities for entrepreneurs to enter the market. From cannabis manufacturing to retail dispensaries, there are various types of cannabis businesses routinely listed for sale on BizBuySell. If you're considering buying or selling a cannabis business, it's important to understand the legal landscape and regulations surrounding this industry. Each state has its own laws regarding marijuana sale and use, making it crucial to seek legal counsel before making any major business decisions.
If you are in the market to buy or sell a cannabis business, it is critical to understand how these types of businesses are valued, and how they are expected to perform financially. To give you some context, we have aggregated listing data of cannabis businesses and surfaced average financials and valuation metrics based on current asking prices.
Market Overview
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Number of Businesses Analyzed
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231
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Median Asking Price
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$1,731,250
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Median Reported Revenue
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$2,000,000
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Median Reported Earnings
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$400,000
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Financials based on businesses that listed an asking price, annual revenue, and seller's discretionary earnings.
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Cannabis Business Valuation Multiples
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Range
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Revenue
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Earnings (SDE)
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Lower Quartile
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0.55
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2.06
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Median
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0.91
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3.14
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Upper Quartile
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1.58
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4.40
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Revenue and earnings multiples based on reported revenue, seller's discretionary earnings, and asking price.
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FAQs
How much does it cost to buy a cannabis business?
Prices vary depending on the size of the business listed, but the median asking price for cannabis businesses listed for sale is $1,731,250.
How much do cannabis business owners earn?
Cannabis business owners report median annual revenue of $2,000,000 and annual owner earnings of $400,000. These figures are based on businesses that have listed their annual revenue and seller's discretionary earnings.
How do I value a cannabis business?
Valuing a cannabis business involves considering several factors, including annual revenue, profit, growth (or decline) trends, and competition. Brokers, business owners, and business buyers will typically rely on valuation multiples to gauge business value relative to similar businesses in the market. Revenue multiples among cannabis businesses listed for sale in the U.S. range from 0.55 to 1.58, with the median at 0.91. Earnings multiples range from 2.06 to 4.40, with the median at 3.14. These values suggest the average cannabis business listed for sale may trade for around 0.91 times its annual revenue, and 3.14 times its annual owner’s earnings.
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