January 25, 2021
Valuing cannabis related businesses and assets is a fast growing market. Lacking history and experience, it is at the the same time a delicate task. Comparable data would help. At the business value level, databases have been keeping up. At the asset level, comparables are still rare.
As of today, the MARKABLES database features 47 comparable trademark transactions and their appropriate royalty rates for the cannabis industry, and 44 comparable transactions for customer margins and attrition rates. These cases cover the whole value chain from growers, extractors, product manufacturers, testing labs, equipment suppliers, wholesalers, dispensaries and day clinics.
The cannabis industry will continue to be dynamic and to show high multiples. Players search for the best structures, levels of integration, and specialisation. Acquisitions and M&A will play an important role to shape the future of this sector. Comparable data from previous reported and audited acquisitions helps to reduce uncertainty and to narrow down the ranges.