CO Dispensary’s Fire Sale Offers Opportunities for Cannabis Entrepreneurs…But Buyer Beware

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How much does it cost to buy an existing medical marijuana dispensary in Colorado?

Here’s some insight: Cannabis & Co., a Denver-based dispensary founded in November 2009, is on the block for a paltry $129,000, less than half the initial listing price of $289,000.

It could make a ripe acquisition target for existing dispensaries that want to expand their reach or for entrepreneurs looking to get into the business. Some dispensary owners, after all, spent upwards of $100,000 just to comply with new state regulations that took effect last year.

But it also carries some significant risks: Cannabis & Co. was recently raided by local law enforcement officials, and its owner was arrested as part of a sting. That raises plenty of questions about the business – not the least of which is the status of the dispensary’s MMJ licenses, which are required to operate a medical marijuana center in the state.

As always, due diligence is needed.

Per Cannabis & Co.’s listing, here’s what $129,000 will buy you:

– A dispensary with 1,350 square feet of retail space

– A small Marijuana-Infused Product (MIPS) operation that currently focuses on hash but is ready to be upgraded into a kitchen (blueprints included)

– Two growing areas (or Optional Premises Cultivation operations), one at the dispensary and another in a warehouse with 5,500 square feet of space

– 2,250 patient emails and addresses

– $20,000 to $30,000 in monthly revenue

– A solid client base, as the dispensary has 1,650 medical records of patients on site

The recent raid certainly has diminished the perceived value of the operation.

But the low price for Cannabis & Co. – and other dispensaries, including this one on the market in Colorado Springs for $125,000 – could also reflect turmoil in the MMJ industry. With the feds starting to crack down on marijuana dispensaries and grow operations in Colorado after similar moves in other states, some people are looking to get out of the business entirely – and quickly.

At the same time, the government’s actions have been enough to deter many would-be entrepreneurs from getting involved in MMJ, while patient numbers in Colorado have dipped significantly.

With prices so low, now is probably a good time to acquire dispensaries in the state if you’re willing to take on some fairly significant risks.