Listing ID: 66627
Business Overview
This business is a community favorite cannabis retail store located on a major arterial, with a daily traffic count of approximately 32,000 cars. The resident population within 3 miles of the store exceeds 90,000 people. The community has a median age of 39 & average household income of slightly under $115,000 per year, a prime demographic for acceptance & incorporation of marijuana for medicinal &
recreational purposes.
A full spectrum cannabis retail business, customer demand exists for flower, prerolls/blunts, concentrates, edibles, and topical creams. Top selling brands at the store include Canna Organix, Exotikz, Crafts Elixirs, Mr. Moxey’s, Oleum, Heylo, Dose, Seattle Bubble Works, Ceres, and Wildflower. Direct engagement with customers occurs through a newsletter and participation in the company’s loyalty program creating a strong percentage of repeat customers.
The business is executively managed by an owner operator. A knowledgeable,
experienced cannabis entrepreneur, the business has been set up to employ best practices, offer high quality products, and provide superior customer service.
Management leadership is provided for daily operations by a
general manager, marketing & operations manager, and a nights & weekends supervisor. The management staff is supported by 10 – 15 full & part-time employees.
The business operates out of an approximately 2400 square foot space specifically built out for cannabis business operation. The company started a new five-year term for the lease in March 2021 at a rate of $14,500 per month. Two additional five-year extension terms exist for continued operation of the business.
The business broker at IBA fielding initial inquiries about the business is Seth Rudin. Mr. Rudin can be contacted directly at (425) 454-3052 or seth@ibainc.com.
Financial
- Asking Price: $3,900,000
- Cash Flow: $1,000,000
- Gross Revenue: $4,900,000
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: N/A
- Established: N/A
The seller will provide an appropriate amount of transition training/consulting to smoothly transfer ownership of the business.
Why is the Current Owner Selling The Business?
There are all sorts of reasons people decide to sell businesses. However, the real factor and the one they tell you may be 2 entirely different things. For instance, they might say "I have way too many various commitments" or "I am retiring". For numerous sellers, these reasons are valid. But also, for some, these may just be excuses to try to hide the reality of altering demographics, increased competitors, current reduction in earnings, or a range of other factors. This is why it is extremely vital that you not depend completely on a vendor's word, but instead, make use of the vendor's answer together with your general due diligence. This will repaint a more sensible image of the business's existing circumstance.
Existing Debts and Future Obligations
If the current company is in debt, which many companies are, then you will need to consider this when valuating/preparing your offer. Many businesses take out loans in order to cover items such as inventory, payroll, accounts payable, etc. Keep in mind that sometimes this can suggest that revenue margins are too thin. Many organisations fall under a revolving door of taking loans as a way to pay back various other loans. Along with debts, there may likewise be future commitments to consider. There may be an outstanding lease on equipment or the structure where the business resides. The business might have existing agreements with vendors that must be met or may cause penalties if terminated early.
Understanding the Customer Base, Competition and Area Demographics
How do operating businesses in the area draw in new customers? Often times, businesses have repeat clients, which create the core of their daily profits. Specific variables such as new competition growing up around the location, roadway building, and also employee turnover can influence repeat consumers and adversely impact future profits. One vital point to think about is the placement of the business. Is it in an extremely trafficked shopping mall, or is it concealed from the highway? Obviously, the more people that see the business regularly, the higher the opportunity to develop a returning consumer base. A last thought is the general area demographics. Is the business located in a densely populated city, or is it situated on the edge of town? How might the local average household income influence future revenue potential?
