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Corporate DRE #02174506
(213) 722-9577

Questions & Answers

Pac Garden Assets is a licensed California real estate and business brokerage focused exclusively on the regulated cannabis industry. Pac Garden doesn’t provide tax or legal advice, however, if you need a referral, we’re happy to provide recommendations.

I think I’m ready to list my business for sale. What type of valuation can I expect?

Valuations are constantly changing. Generally speaking, it is a function of your sales, profitability, and comparable transactions. Pacgarden will consider your business’ financial performance as well as the market comparables when discussing the value of your business.

How do I value my real estate holdings?

Commercial real estate investors often think of real estate prices in terms of cap rates, or capitalization rates. For instance, a “10 cap” implies 10 years to recoup your investment, or 10 times the annual net income operating income from the real estate.  Commercial cannabis cap rates range from a high of about 14 to a low of five, depending on the product type, the region, and the risk that the tenant or the local market represents. Limited license markets can earn lower cap rates, and therefore a higher real estate price, since there is less competition for the tenant operating the business.  Cannabis businesses are considered higher risk, so expect higher cap rates as a general rule of thumb.

If I buy a cannabis business how do I go about transferring the license into my name?

The department of cannabis control, or DCC, processes new owners added to the license. The DCC is a state agency that follows local control, so be sure to consult with DCC and the local cannabis authority to understand how to pass a background check along with other important considerations, and speak to a licensed cannabis attorney if necessary.

Can Pac Garden help me find a new building to get a license?

Pac Garden handles M&A and real estate transactions post-license.  If you need help finding real estate for a license or permit application, we can happily refer you to a specialist in that area. 

Does Pac Garden focus on one area of the supply chain over the others?

Our clients are in all areas of the supply chain, from cultivation to retail.   We don’t discriminate, but oftentimes, we have more inventory in a given area. 

Should I “vertically integrate” and add a grow to my retail or vice versa?

We think it’s smart to control the shelf space and all the flavors your customers ask you for.  And there’s pride and extra profit in selling flower you’ve grown “in house.”  Of course, retail sales and cannabis cultivation are very, very different operations, so make sure you know what you're getting into and make sure you’re properly capitalized.