MJBiz acquired by Emerald X for $120 million-plus

Image of MJBizCon 2021

MJBiz Con 2021 drew 1,200 exhibitors and 27,000 attendees to the Las Vegas Convention Center in October.

(This story has been updated with more details about the deal.)

MJBiz has been acquired by Emerald X, a wholly owned subsidiary of Emerald Holding, a New York-based business-to-business event and media company, for $120 million in cash plus potential earnouts.

The acquisition includes MJBizCon, the oldest and largest trade show of its kind in the cannabis industry, as well as related media and event brands that include award-winning publications MJBizDaily, Hemp Industry Daily and MJBizMagazine.

The purchase also includes The Emerald Conference, a cannabis science event MJBiz acquired in 2020.

Hervé Sedky, Emerald’s president and CEO, said the deal fits with Emerald’s strategic plans.

“MJBiz’s leading event and content portfolio, coupled with their 365-day engagement platform – which connects the entire cannabis supply chain – will diversify our collective product offerings, enhance our growth profile and enable us to deliver even greater value to our customers over the long term,” Sedky said.

Emerald’s major events include Outdoor Retailer, ASD Market Week and the International Pizza Expo.

The company’s acquisition of Denver-based MJBiz represents major deals for both the event and cannabis industries.

The transaction also reflects the ongoing mainstream acceptance of the once-counterculture cannabis plant – and the multibillion-dollar industry that has blossomed around it over the past quarter century.

“This really highlights the rapidly growing interest in cannabis from all corners of the business world, the market’s vast potential and the success of not only MJBiz, but also of the entire industry,” MJBiz CEO Chris Walsh said.

“We’re seeing these types of deals across cannabis as pioneering companies such as ours level up to more effectively tap and foster the industry’s next wave of growth.”

The deal includes a variable earnout based on financial performance.

The earnout will be an amount equal to the EBITDA growth of MJBiz – calculated as an amount equal to the average MJBiz EBITDA over the past two years minus $13 million – multiplied by 9.3.

David Doft, Emerald’s chief financial officer, told Bloomberg the earnout could pay anywhere from $30 million to $50 million in added cash for MJBiz in early 2023.

Major trade show organizers

As the cannabis industry’s largest annual trade show, MJBizCon attracted more than 1,200 exhibitors and 27,000 attendees when it was held in Las Vegas in October.

Emerald organizes more than 150 events a year, spanning such sectors as retail, design and construction, technology, equipment and safety.

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Like other major event organizers, both privately held MJBiz and publicly held Emerald suffered financial fallout from the emergence of the coronavirus pandemic in early 2020.

The pandemic forced the cancellation of hundreds of conferences and trade shows around the globe.

But both companies have since bounced back.

In 2021, MJBiz’s revenues were approximately $27 million, which were near pre-pandemic levels.

Emerald’s revenue started rebounding in the third quarter of 2021, climbing to $76.5 million from $15 million in the second quarter.

The third-quarter figure was more than half of 2020’s total of $127.4 million. By comparison, 2019 revenue was $360.9 million.

MJBiz leadership, staff to remain

The MJBiz leadership team and staff will continue under the new ownership.

“MJBiz plans to continue to serve the cannabis business as it has for the past decade, now with a deeper bench,” Walsh said.

Emerald has approximately 600 employees; MJBiz has roughly 40.

“Integrating with a larger organization provides the additional resources and channels to unlock the next phase of MJBiz’s growth and is the right next step in our evolution as a business,” MJBiz co-founder Cassandra Farrington said.

“We chose Emerald because they clearly value the unique aspects of our brand and are committed to serving the industry’s expansion.”

Farrington and her co-founder, Anne Holland, will act as consultants for a period of time.

Sedky said he has long admired “MJBiz’s sterling reputation for being the most trusted event and content producer serving the business side of the cannabis and hemp industries and their respective participants.”

Emerald Holding trades as EEX on the New York Stock Exchange.

MJBizCon 2022 will be held Nov. 15-18 in Las Vegas.