Business Overview
About the Company
They focus mainly on Distribution and Logistics to other smaller
wholesalers which make up 59% of their revenue, while 38% is sold
Business to Business to multi location owners; less than 3% is sold
direct to the consumer and this is intentional for research and
development purposes. They operate out of a 12,000 sq. ft.
distribution facility in Orange County and have a strong team of about
40 individuals who are experts in this industry. Boasting sales of
$27MM, this B2B business has two primary client types: smaller
wholesalers and direct to shop owners. Services include wholesale,
coordinating manufacturing, packaged development with fulfillment,
and arranging logistics through 3rd party freight. This team includes a
CFO, General Manager, VP of Sales, Retail Lead, 2 Manufacturing
Leads, Warehouse Lead, 4 Warehouse Associates, 5 In House Sales
Reps, 24 Packagers, and 19 Outside Sales Reps. They do not have
any drivers, all are outsourced. The current owner recently reinvested
significant amounts of time and money into expanding operations,
including moving to a distribution center twice the size to handle the
growth. Currently there are 36 States who have recognized these
Low-Dose consumables as a legal product and there are projected to
be another 7 states that will follow suit in the next 6-9 months. The
seller will remain on board for 4 years and is willing to do a 35% carry
or equity roll combo as a sign of a vested interest in the business’s
success. The business does not sell any traditional cannabis products
but rather regulated hemp which allows them to legally sell across
state lines.
This business is priced at $34,750,000, producing a 36% profit
margin! There are 43 well-known and respectably sized Private Equity
Groups and dozens of publicly traded companies that own very
similar businesses. The goal for selling is to expand with a Strategic
Buyer or Equity Group who can bring strong business acumen and
who may want to grow in manufacturing, bringing it in house to boost
profit margins.
