MJBizMag November-December 2021 - 82

BestPracticesInRetail | Solomon Israel
Ceres Natural Remedies dispensary in Vermont, acquired by Slang Worldwide as part of its deal to buy High Fidelity. Courtesy Photo
Exit Here
How to sell your marijuana retail store
without selling yourself short
W
hether it's a single-store deal
or the sale of a multiple-outlet
chain, successfully navigating
the acquisition of your cannabis retail
business takes stamina, foresight and
emotional intelligence.
" If you're going to be building a
business, you need to understand
exit strategy as a concept, " said Matt
Walstatter, who founded Pure Green,
a medical and recreational marijuana
store, with his wife, Meghan Walstatter.
The couple later sold the business in
Portland, Oregon, in a deal that closed
in early 2019.
Walstatter is one of several cannabis
retail owners and leaders who shared
best practices for those seeking an
acquisition.
Motivations for Selling
Marijuana store owners don't just sell
their businesses to cash out, although
that's certainly a motivation for some.
For the Walstatters, selling
Pure Green to Vancouver, British
Columbia-based vertically integrated
cannabis company C21 Investments
made sense in a crowded local
retail environment. The couple had
considered opening more stores but
ultimately decided against it.
Selling Pure Green allowed the
couple to pay off Pure Green's
outstanding debt and bills. " Then we
paid ourselves back for the investment
that we made, " Matt Walstatter said.
Some of the profits went into Siren
Cannabis, the Walstatters' separate
cultivation business.
In Vermont, Shayne Lynn realized
that his vertically integrated cannabis
business, High Fidelity, which
operated four dispensaries and
two cultivation sites, needed more
fundraising capacity to prepare for
the state's pending recreational
market. The company's acquisition
82 MJBizMagazine | November-December 2021
Some marijuana store owners end
their retail journey by selling the
business to a bigger company. Being
acquired can be financially rewarding,
but the process is also fraught with
challenges and risks, not to mention
an intimidating amount of paperwork
and sometimes-grueling negotiations.
Cannabis business executives and
attorneys who have successfully
navigated the choppy waters of
acquisitions recommend:
* Understanding your motivations
for selling, which might go beyond
simply making money.
* Taking steps to make your business
acquisition-friendly and considering
post-acquisition opportunities
to stay engaged in the acquired
company.
* Hiring a cannabis-focused business
lawyer who understands the
intricacies of M&A. Then, acting
reasonably during negotiations.
* Putting yourself in the shoes of staff
members who might be worried
about what the acquisition means
for them.
* Appreciating the emotional toll of
selling the business you built.

MJBizMag November-December 2021

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