Want to cash out of your cannabis business? Here are some things to consider

(This is an abridged version of a story that appears in the October issue of Marijuana Business Magazine.)

As merger and acquisition activity accelerates across the cannabis industry, many companies are discovering they don’t need a for-sale sign in the window to be a takeover target.

The flurry of M&A activity, which is on pace to double in the marijuana industry this year, is giving more company founders a chance to cash out at an attractive price after years of working 24/7 to build their businesses.

It also can provide a founder with a hefty pot of cash to launch their next venture.

“I never imagined that I would sell this company just two years after we launched it,” said Mason Levy, co-founder of cannabis tech app WeGrow, an educational platform for home growers. “I was dead set on being with the company for decades.”

That plan changed after the company was approached by VividGro, a Rhode Island lighting solutions firm that had been using the WeGrow platform for its customers and wanted the technology for its own use.

After months of negotiating, legal work and financial audits, Levy and business partner Rodolfo Ramirez sold to VividGro for an undisclosed price.

As more companies become potential acquisition targets, here are some things businesses and their founders should consider before a buyer comes knocking on the doors.

Click here to learn the importance of:

  • Starting a competition among prospective buyers
  • Building your company’s brand
  • Determining what your business is worth
  • Putting good corporate governance in place
  • Hiring the right business broker

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