Business Summary:
They focus mainly on Distribution and Logistics to other smallerwholesalers which make up 59% of their revenue, while 38% is soldBusiness to Business to multi location owners; less than 3% is solddirect to the consumer and this is intentional for research anddevelopment purposes. They operate out of a 12,000 sq. ft.distribution facility in Orange County and have a strong team of about40 individuals who are experts in this industry. Boasting sales of$27MM, this B2B business has two primary client types: smallerwholesalers and direct to shop owners. Services include wholesale,coordinating manufacturing, packaged development with fulfillment,and arranging logistics through 3rd party freight. This team includes aCFO, General Manager, VP of Sales, Retail Lead, 2 ManufacturingLeads, Warehouse Lead, 4 Warehouse Associates, 5 In House SalesReps, 24 Packagers, and 19 Outside Sales Reps. They do not haveany drivers, all are outsourced. The current owner recently reinvestedsignificant amounts of time and money into expanding operations,including moving to a distribution center twice the size to handle thegrowth. Currently there are 36 States who have recognized theseLow-Dose consumables as a legal product and there are projected tobe another 7 states that will follow suit in the next 6-9 months. Theseller will remain on board for 4 years and is willing to do a 35% carryor equity roll combo as a sign of a vested interest in the business’ssuccess. The business does not sell any traditional cannabis productsbut rather regulated hemp which allows them to legally sell acrossstate lines.This business is priced at $34,750,000, producing a 36% profitmargin! There are 43 well-known and respectably sized Private EquityGroups and dozens of publicly traded companies that own verysimilar businesses. The goal for selling is to expand with a StrategicBuyer or Equity Group who can bring strong business acumen andwho may want to grow in manufacturing, bringing it in house to boostprofit margins.
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