Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupportContact
Search
Close

Thoughts from ACG Panel on Cannabis M&A

By Steve Hecht on October 11, 2021
Email this postTweet this postLike this postShare this post on LinkedIn

IRS & Business Taxation of the Cannabis Industry

The Association for Corporate Growth of Los Angeles hosted a panel on Trends & Transactions in Cannabis Middle Market M&A.

The panel addressed appropriate valuation methods for cannabis companies, with one speaker suggesting that a valuation based on a multiple of EBITDA alone would likely not be sufficient if that were the only method, given the outsized effect that the current tax laws have on cannabis companies.  That speaker suggested that a DCF using a five-year projection could be more helpful, where the cash flows are projected on an after-tax basis.  Of course, as we’ve posted before, a valuation of any cannabis asset is a highly fact-specific exercise that is not subject to any one-size-fits-all formula and depends on the facts and circumstances presented in each case.

As a practical matter, the panel also cautioned M&A buyers to go beyond the written financial statements and do a walk though of the facilities, a critical step for cannabis companies to ensure that half the plants aren’t dead, for instance.

Photo of Steve Hecht Steve Hecht

Steve Hecht is a go-to trial lawyer for hedge funds, institutional investors, family offices, university endowments, venture funds and other investors interested in utilizing the legal process to create value for their own investors. Whether by activist litigation, fiduciary duty claims, or appraisal…

Steve Hecht is a go-to trial lawyer for hedge funds, institutional investors, family offices, university endowments, venture funds and other investors interested in utilizing the legal process to create value for their own investors. Whether by activist litigation, fiduciary duty claims, or appraisal and other valuation strategies, Steve has extensive experience across the gamut of options for shareholders.  He regularly tries cases in Delaware Chancery Court and around the country for clients seeking outsized returns. Steve is a partner of Rolnick Kramer Sadighi LLP.

Read more about Steve HechtEmailSteven's Linkedin Profile
Show more Show less
  • Posted in:
    Business and Commercial, Cannabis
  • Blog:
    Valuation Litigation & Shareholder Rights Blog
  • Organization:
    Rolnick Kramer Sadighi LLP
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
The Library at LexBlog
  • About LexBlog
  • The Field We Built
  • Library at LexBlog
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo