Consolidation in the cannabis industry is becoming more and more prevalent as licensing processes draw out and the capital markets dry up. Any business involved in any merger and/or acquisition must be methodical in their due diligence prior to signing the dotted line. Here are some cannabis-specific items to look into:
1. LICENSE STATUS–Contact any relevant state/local licensing agency to ensure that all licensing are in good standing.
2. CONTRACTUAL OBLIGATIONS–Check up on the status of any lease or vendor contract that will be inherited.
3. PROOF OF FUNDS–Very few deals are paid out in one lump sum, so make sure any buyer is financially solvent and able to close in light of the deal terms.
DISCLAIMER: THIS INFORMATION IS STRICTLY EDUCATIONAL AND DOES NOT CONSTITUTE LEGAL ADVICE.