There are many factors that go into determining the value of a cannabis business. The current and most widely used factor or method is "Value = 1 Year Total Gross Revenue." Using this method if a business brings in $100,000.00 per month in gross revenue the valuation would be in the neighborhood of $1,200,000 ($100,000.00 X 12 months).

Keep in mind this is only one factor to take into consideration when determining value. You will commonly see businesses advertised for price that is very close to the business's 12 month total gross revenue. However, there are many things to take into consideration. Below we will discuss newly established business with trending sales or not sales at all.

If it's a new operation with less data look for ways to estimate one year worth of gross revenue. For example, if the business did $500,000 in the last 4 months we multiply that by 3 to get 12 months worth of gross revenue while taking into account possible upward trends in sales.

In some scenarios it's a brand new business with no sales data. For that we look to costs to establish and build out the businesses as well as current market sales trends.

There are many ways determine the value of a cannabis business. Hopefully this gives you a place to start.