Do All Cash Deals Still Happen In 2024?

Recent years in the cannabis Industry have led to the extinction of all cash deals in the world of M&A (Mergers and Acquisitions). In 2021 and prior most transactions were all cash upon execution of purchase agreements but as the industry entered turmoil and uncertainty 80%-90% of all cannabis deals and transactions entered Escrow with some sort of seller financing whether it was 50% Down on a business or 10% Down, etc. As the market continues to mature and Business evaluations continue to decline, one may ask "Do All Cash Deals Still Happen? The answer is YES. 

In Quarter 2 of 2024, Green Life Business closed the largest all cash cannabis transaction since 2020. An All Cash $9M cannabis dispensary in California sold through the Brokerage sending shock waves across the cannabis industry. Green Life Business Also Sold a $4M Large Scale Cultivation Business that paid All Cash. Both of these buyers are new groups looking to make a splash into the cannabis space .

Here are the Steps to Successfully Navigate an All-Cash Sale

1. Engage Professional Advisors:
   • Legal Counsel: Hire attorneys with experience in cannabis law to navigate the complex legal landscape and ensure all aspects of the sale are compliant with state and local regulations.
   • Accountants and Valuators: Work with financial experts who specialize in the cannabis industry to perform accurate valuations and financial assessments.
2. Ensure Comprehensive Documentation:
   • Maintain detailed records of all business operations, including sales, inventory, expenses, and compliance documentation. This transparency helps build trust with potential buyers and simplifies the due diligence process.
3. Implement Robust Security Measures:
   • Plan for the safe transfer of cash, which may involve hiring professional security services and using secure locations for transactions. Some sales might utilize escrow services to hold funds until all conditions of the sale are met.
4. Understand the Buyer's Background:
   • Conduct thorough background checks on potential buyers to ensure they have the financial capacity and legal standing to complete the transaction.
5. Negotiate Terms Clearly:
   • Clearly outline the terms of the sale in a comprehensive purchase agreement. Address all contingencies, such as regulatory approvals, and ensure both parties understand their obligations.

6. Plan for Post-Sale Transition:
   • Develop a plan for the transition period post-sale, ensuring continuity in operations, employee management, and compliance with ongoing regulatory requirements.

Conclusion

Selling a cannabis business in an all-cash transaction requires navigating a unique set of challenges, from security concerns to regulatory compliance. By engaging professional advisors, maintaining comprehensive documentation, and implementing robust security measures, sellers can successfully complete transactions and capitalize on the growing cannabis market. As the industry continues to evolve, staying informed and prepared is key to navigating its complexities and seizing emerging opportunities. The great news is that All Cash Transactions Still happen in this market. 

To View Nationwide Listings For Sale please Visit greenlifebusiness.com. To get further information on a business or get an evaluation for your business call Green Life Business Group at 619-653-0483 or email at sales@glbgroupinc.com.