Wholesale, Co-Packing & Distribution to 36 States Offering 35% Carry
Seeking Strategic Buyer!
Boasting sales of $26MM, 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. 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. 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. 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. 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 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 $34,500,000, with a 4.9 multiple on a 2022 $7,045,348 cash flow, 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.
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