Understanding the Valuation Process for Cannabis Companies with Bridge West CPAs

{}Introduction

Host: All right, I'll give a few moments for everyone to log in here, thank you for everyone joining. All right, good afternoon everyone, and welcome to the MediaJel podcast, where we cover the latest in marketing trends and strategies that are most effective in growing your cannabis dispensary, delivery service, or brand. MediaJel connects brands and retailers with cannabis consumers through our ad network of publishers, mobile apps, games, and TV, we help cannabis companies advertise through paid search, through SEO, and through programmatic display advertising, to drive e-commerce sales. I am your host, and today we'll be discussing how to determine a cannabis company's valuation and multiples, with Bridge West CPAs. Bridge West is one of the first accounting firms in the world to focus solely on the cannabis industry, since 2009 the practice has expanded to more than 600 cannabis and hemp clients nationwide, they work with all types of organizations that provide legal recreational cannabis, medical marijuana, low-THC and high-CBD products, hemp farming, and ancillary services.

First up, I'd like to introduce Corey Parnell, who is the CEO of Bridge West. He has 25 years of experience working with business owners and senior management to develop strategic business plans, deal with complex tax and accounting issues, implement best practices, and increase shareholder value. Corey has been involved in the cannabis industry since 2014, and, as one of the leaders of Bridge West, he assists in managing the firm's cannabis team to provide exceptional client and customer service. His technical and advisory services to cannabis clients range from minimizing the effects of IRS Section 280E, which we all know about, to inventory management, inventory costing, cash management, and preparing financial statements.

Next up, I'd like to introduce Calvin Shannon. Calvin is the president of Bridge West, and has over 20 years of experience providing tax and audit services, with a deep understanding of the challenges cannabis clients are facing. Calvin is skilled at working with them to develop and implement innovative solutions. Calvin assists cannabis businesses in addressing the industry's unique and ever-evolving issues, he enjoys working with clients to understand their business needs and provide timely solutions. In addition to being a certified public accountant, Calvin is accredited in business valuation as well. Welcome to the show, gentlemen, how are you both?

Corey Parnell: Good, thank you very much for the introduction, and we're excited to have this opportunity for this discussion.

Calvin Shannon: Likewise, excited to have you both.

Why Would a Cannabis Company Need a Valuation?

Host: Well, let's kick it off from the top — why would a cannabis company need a valuation in the first place?

Calvin Shannon: Yeah, I guess I'd answer that by listing out a lot of the common requests we get when current or future potential clients call asking about valuation services, what the reasons are, and maybe make a couple comments about some of them. One comment is, ownership is considering a sale of the business, or a partial interest in the business, valuing equity compensation — I'd say very recently we've seen more and more inquiries regarding 409A valuations, which relates to stock options, a form of equity compensation. Often it could be litigation-driven, maybe minority shareholder disputes, or shareholder ownership buyout disputes. A lot of times it's around insurance claims, for lost revenue or decreasing value of a business, maybe there was a fire, and the license holder is trying to come to terms with the insurance company on the settlement. Buy-sell agreements, which are agreements owners of a business entity have that lay out the terms of what a buyout would look like, are always a good idea, but that's kind of a separate conversation — a lot of times these agreements will have language indicating that, in the event of a buyout, a third-party business valuation professional would provide a report to arrive at a value, and that would drive the buyout. A lot of times in cannabis there's change in business structure, especially at this phase of the game, and then sometimes you'd need valuations for tax purposes. One of the least common needs for business valuation in cannabis, versus more traditional clients, is estate and gift taxes, and I'd say that's especially true just because the industry's still maturing — as more time goes by, and people who own an interest need to file a gift tax return, they'd need a valuation for that purpose, or if they're doing estate planning, looking to push some assets into a trust, or whatever estate plan they want to implement, they may need to file gift tax returns, which would require a business valuation if they own an interest in a privately held company. Then, I guess, the last area is around GAAP or IFRS financial reporting — some entities require financial statements, and if there had been business combinations or equity-based compensation, a lot of times they'd need business valuations to comply with their reporting requirements. Corey, is there anything additional you'd run into that I forgot to discuss?

Corey Parnell: No, I can't think of any, and I think we get inquiries in all those different buckets all the time. One that kind of ebbs and flows is transactions — we've seen a lot of transactions in the last two years, and we continue to do that. And, actually, I think we're working right now on something tied around capital raise, everywhere from the initial startup through additional rounds, so that's another area where we help clients through that process.

Host: Your comment around capital raise — I kind of glossed over it, and just indicated ownership considering sale of a business or partial interest, that really drives a lot of it, they're looking to bring in outside money, and both parties are looking at each other saying, how on earth do we value what we're willing to come in at? So, exactly what is the standard of value, and why is that important?

What Is the Standard of Value, and Why Does It Matter?

Calvin Shannon: So the standard of value, I'd say, is how value is being defined when you're valuing the company, which is critically important — a lot of times, when we're first talking with a client who says they need a valuation, this is the first place we're going to go, we're going to ask what the purpose of the valuation is, because that'll drive what the standard of value is. As I talk about what some of these different standards of value are, that'll become more obvious, but without knowing this up front — and, obviously, it would be disclosed in an engagement letter between the valuation professional and the client — sometimes the valuation may not achieve the purpose the client engaged us for, and, even more so, the client's idea of what the value is, if they're not defining it correctly, may not meet their expectations. So it's important to understand, and make sure everyone's on the same page up front. Maybe with that I'll talk about a couple of the different standards of value, or definitions of value.

Fair Market Value vs. Investment/Strategic Value

Calvin Shannon: The first one is certainly the most common, and it's from Revenue Ruling 59-60, which is a tax issue, basically fair market value — fair market value is defined as the amount at which property would change hands between a willing buyer and a willing seller, when the former is not under compulsion to buy and the latter is not under compulsion to sell, both parties having reasonable knowledge of the relevant facts. I just read the literal definition from the revenue ruling — this is the definition most often used for IRS or tax purposes, and, honestly, otherwise, a lot of times it's just the default definition, because it's what a lot of valuation practitioners are used to, comfortable with, certainly what I'm more used to and comfortable with. One additional summary point about fair market value is it assumes a hypothetical arm's-length sale, without regard to specific buyer or seller — and I emphasize that, without regard to specific buyer or seller — to contrast that with investment, or strategic, value, which is the value of an asset or business to a specific owner or prospective owner, with the idea that this specific owner has specific ideas of what they're going to do with the business, specific expectations with regard to risk, probably some business motivation. And I'm sure you and everyone else has heard of some of these relatively larger values that have been paid for license holders all over the country — the question is, was that a fair market value standard, or was it probably more an investment or strategic value, because the buyer was maybe an MSO operating in other states, looking to enter this market for a specific purpose, and maybe they paid more than fair market value because they had a strategic reason to do so.

Host: Go ahead, Corey.

Corey Parnell: I was just going to say, you probably want to touch on the fact that valuators have rules they have to follow — when you're talking about a strategic valuation, that's almost like an outlier. For example, in Florida, because there's a limited number of licenses, we've seen a license sell for 50 million dollars when there's really no assets, nothing operating, it's just that you're buying your way into a marketplace for a strategic purpose, versus the fair value you were just talking about — there are rules that all business valuation experts have to follow.

Calvin Shannon: Correct, specifically, as long as you're going down the fair market value standard, you have this hypothetical buyer and seller, as opposed to this strategic value, and that's why it's important to have this conversation up front with a potential client, and explain it to them, because otherwise they read an article that some license got sold with no activity whatsoever for 20 million dollars, and think, "oh, I'm worth 20 million dollars too." I'm like, well, we need to have this conversation about how you're really defining value, and how it's relevant to the purpose you're getting the valuation for.

Corey Parnell: Really just set those expectations up front — I know there's a lot of noise in the media about these crazy valuations for tech companies, same thing with MSOs, and it really just depends on the market, there's no concrete way to say, "hey, this is what you're worth," it's really what someone's going to pay.

Calvin Shannon: Exactly, yeah, exactly, again it depends on strategy, the real purpose of it, and it might be strategic that you have a limited license and you're trying to maximize the value of that to a strategic buyer before the market potentially changes, which most markets do evolve and change over time.

Host: Yeah, I mean, for example, on my side, I applied for a license here in Santa Rosa, we had a cap at 16, so we had a valuation of one to two million dollars for that license — if you get the store operational, it's a different valuation, if it's a profitable business, different valuation, and then they got rid of the cap, so now there's an unlimited amount of dispensaries opening in the area, and that just crushed the valuation — valuation changes pretty quick.

Fair Value for Court Purposes and GAAP Fair Value

Calvin Shannon: Yeah, yeah, a couple other standards of value, or definitions of value — there's fair value for court purposes, and this is a little harder to talk about, because every state will have different laws, and possibly we'd be engaged to do a valuation where an attorney is dealing with a client who has a minority rights issue, and they need a value because they're trying to work with their client to get a buyout. If you're looking at how to define value in that situation, a lot of times different states will have different laws for how you go about doing the valuation, and you have to look at those laws and understand what that means for the value — for example, states will say you do or don't exclude minority ownership discounts, or marketability discounts, to arrive at the value, so you've got to be careful to pay attention to what's going on there. A lot of times we'd actually be engaged directly by the attorneys, and the first conversation would be, can you help me understand exactly how the jurisdiction you're working in defines value for the purposes of this particular litigation. And the last one is fair value for a GAAP definition, and that goes back to what I mentioned earlier, one of the reasons people may need valuations for financial reporting purposes — I'll read the definition: the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. So that's a layout of the different standards of value, and why it's important to understand up front what your goals are, and what you're trying to achieve with the valuation, to make sure everyone's on the same page.

Host: It's interesting you bring up the example about limited licenses versus the license being operational — that's another conversation we have with clients when they're entering a market, we have one client, I think this will be their third market, they've gone in, won a license, got it up and running, and sold — that's their strategy.

Calvin Shannon: Yeah.

How a Valuation Is Actually Performed

Host: Really, thank you gentlemen for setting the tone on the different reasons you'll need a valuation, and now, given that, kind of defining all the details — how is a valuation performed, diving deep into the meat of it.

Calvin Shannon: Yeah, this is kind of the meat of the conversation. Maybe I'll start with how valuations are performed — basically, at a high level, a valuation professional is going to gather relevant information about the entity being valued, and then consider that information to inform the calculation, using basically three commonly used approaches — that's, at a high level, how a valuation would be performed, and what information is considered in that process.

Corey Parnell: Yeah, I like to say valuation is both an art and a science, and there are many factors that go into developing the value for a business — I say they fall into two main groups, tangible factors and intangible factors. The tangible factors, which I myself, as an accountant, love to deal with more, are obviously the financial information — what are the assets and liabilities of the entity being valued, what does the income statement look like, what are the operating results — that's a whole lot easier to deal with, that's the science of valuation. Now the more difficult intangible factors, where the art of it comes in, is a whole list of things — you have to consider the strengths and weaknesses of the entity being valued, the management structure, the competitive advantages and disadvantages relative to competitors, you have to understand the industry — cannabis specific, obviously there's a whole bunch to understand, it's new, it's still, from the federal government's perspective, high-THC is still federally illegal, and there are relatively steep tax ramifications of that with Code Section 280E, which we'll talk about a little later — but just to comment, obviously a large amount of taxes being reduced from the cash flow is certainly going to impact the value. We've talked about a limited number of licenses in a jurisdiction — that can definitely impact the value too, so, as far as industry goes within cannabis, it's a long list of considerations, and then, even beyond that, just the general economic environment in the area being operated in, and even nationwide — separate from cannabis — are we in a recession, which, if it's a retailer, could mean the future cash flows are impacted, because customers could have less disposable income, or, on the other direction, maybe, like we're dealing with right now, there's somewhat of a labor shortage, which certainly impacts cannabis centers as well, because you've got to have employees to work in the dispensaries or production facilities. So that's a look at the types of information a valuator would consider when doing the valuation.

The Three Valuation Approaches: Asset, Income, and Market

Host: Wonderful, and based on the information provided to perform a valuation, what approaches are used when valuing a cannabis company?

Calvin Shannon: So there are three traditional approaches to value privately held companies, I'll list them off and then go into more detail on a couple — the asset approach, the income approach, and the market approach. Every valuation should really be looked at under these three approaches, and then you consider which is more relevant, maybe use a combination, arrive at a value that way — under the best case circumstances, two of them happen to agree, and then you get even more comfort with the value you arrived at. So, the asset approach calculates the value of a business, or business ownership interest, by determining the value of its assets net of its liabilities, and this approach is generally used to value non-operating businesses, and would provide a minimum value for operating companies. What I mean is, if an entity is just holding some real estate, it just owns a strip mall, that's all it does, it doesn't have any activity, you'd probably arrive at the value by coming up with the fair market value of the real estate, backing out whatever mortgages are against it, and then you have the value of that business — which is distinct from a business that's operating, which is what most license-holding companies are, operating dispensaries or production companies, so the asset approach wouldn't be used for that, one of the latter two approaches would be. The first one I'll talk about most, because for the cannabis industry it's certainly the most prevalent, is the income approach — the income approach determines the value indication of a business ownership interest, security, or intangible asset, using one or more methods that convert an anticipated benefit stream into value — and I'll define anticipated benefit stream as basically the cash flow that's eventually going to come to the owners from the earnings, so the idea is it converts this anticipated future cash flow stream into a present value amount, and that's what a potential investor is buying — by owning this business, it's going to operate in the future, generate this cash flow, and eventually it comes to me, that's my return on investment. The income approach value is determined by methods that discount or capitalize net future cash flow by a discount or capitalization rate that reflects market rate expectations, market conditions, and the relative risk of the investment. I mentioned two subsets in the income approach — there are others, but I'll focus on two of the more common. One is the capitalization approach, which uses expected ongoing net cash flow for a single period, and converts it into the value of future cash flow using a capitalization rate, which is a discount rate less the long-term expected growth rate — the capitalization approach is used by entities whose cash flow isn't expected to vary significantly year to year. So, in summary, with the capitalization approach, you look at one year, and capitalize it, take it times a multiplier, and that's what the value is — that's useful if the future is going to be somewhat similar, or have a steady growth stream, from the year you're capitalizing, as opposed to, which is the case a lot of times in this industry, because the industry's in a growth phase, that's probably less relevant, and you'd probably need to use a discounted cash flow method, where you project the future cash flows with all the changes that are going to happen out into the future, and discount that back — under both approaches you should come to the same answer, the capitalization approach is maybe a shortcut if you don't expect significant fluctuation in future cash flows, but to the extent you are going to have a lot of changes, you're kind of restricted to using discounted cash flows, and detailing those out.

Forecasting Cash Flow for Startups vs. Established Operators

Corey Parnell: And, again, I'm probably talking about normally going out five years of performance, and I know someone asked about startups — same thing, you have to make your best estimate, normally what we'll see with a startup is 12 to 18 months of getting a license, getting ready for operational start, building market penetration, but that's where what Calvin was talking about earlier comes in — what is the management team's experience, what does the market analysis look like — and one of the things we think we're pretty good at is being able to assess whether the metrics make sense, the cost of goods sold, the operating expenses, what the balance sheet should look like, inventory turns, market conditions from a competitive standpoint, and really working through, with management, that five-year forecast. That takes a lot of time and thought, whether you're an existing operator, it's still about forecasting, or if you're a startup, it's a similar process — and that's where, Calvin, you were talking about the discount, you'd have a higher discount if you're a startup, because it's a higher risk, versus if you were operating for four years and just adding to your cultivation or manufacturing, doubling the size because demand is there, then you'll be forecasting that, and again, what have we seen in other marketplaces, market opportunity and growth within that market — all those factors come into play and take a lot of conversation, especially if you're raising money and using that as a basis, because the investor groups out there have become a lot more sophisticated in the area of cannabis, and are really getting a better understanding of markets and the evolution, especially with publicly traded companies providing some benchmarks and numbers out there.

Host: Since you're accredited in business valuation, what are some of the services a valuation professional would provide?

Calvin Shannon: Well, I guess, can we talk a little bit more about the approaches, especially the income approach, because, like I said, this is going to be the most common, and really important. So maybe I'll make a couple more comments, I'd categorize it into two different buckets — the first thing is, what are the future cash flows, Corey mentioned going out five years, that's pretty customary, and this idea of what the future cash flows are is difficult, right, you're trying to look into a crystal ball and figure it out, but that's critically important, because the buyer isn't buying the historical results, they're buying what the future cash flows are going to be, for this potential buyer. So that's critical to try to pin down, and that's the first step of the income approach.

Understanding Discount and Capitalization Rates

Calvin Shannon: And then, even after you do that — Corey started to make reference to this as well — you have to figure out the discount or capitalization rate, which I'd define as the required rate of return an investor would expect, given the risk specific to the entity and the industry being valued. And this kind of goes to the point of, all the risks, THC being federally illegal, and the listeners might have questions, well, can you give me some idea of what the required rate of return or discount rates may be — so let me lay out a picture. Let's say if you were going to invest in some U.S. government debt, which is about as unrisky a thing as you can invest in, you'd probably expect a rate somewhere between two and three percent, which is probably going up as we speak, but still relatively light. Contrast that to investing in a large publicly traded company, like Microsoft or 3M, something diverse whose stock is publicly traded, easy to get rid of — more risk than government debt, but still relatively low risk, maybe you'd expect something like a nine percent rate of return. Now step that up to a riskier, small publicly traded company, maybe thinly traded, less diverse in its activities, a little more risky, maybe you'd expect something like a 14 percent rate of return. Now we'll jump to a stable privately held company, which the rate jumps up a little more for — a lot of that has to do with the fact that if you want to liquidate your position, it's a lot harder, there's no public market for it, and, additionally, smaller companies have more risk — let's give an example, like a dental office, it's confined to a geographic area of potential clients, potential employees, a little more risk, maybe you'd expect 16 to 20 percent. And I do all this buildup to arrive at what a potential investor's expected rate of return would be for a privately held cannabis company, which, for a lot of the reasons we've been discussing, is significantly more risky, and honestly that rate of return is often somewhere between 25 and 40 percent, in a lot of the valuation reports we've issued, and I've seen that consistent with a lot of other professionals. I know I've spent a lot of time on this idea of rate of return, but it's really critical because it's what's going to drive the value — the higher the required rate of return, the less the value on future cash flows, which is often surprising, and even disappointing, to clients, but it's necessary to make sure they understand why.

Corey Parnell: Sorry to jump in, but I wanted you to finish out that answer, because, Calvin, I think a couple times in court they've accepted that discount rate ending up being a higher one, definitely — that's what we've seen in the court system where we've done valuation work. And the other thing, I guess, is how I always look at the discount rate — a 25 percent return is really four years of cash flow that you're willing to invest to get; if it's 33 percent, that's three years of cash flow; 50 percent, then it's two years of cash flow — that's kind of how I look at it. And again, depending on the stage, if it's a startup, you're going to have a very high rate of return because there's higher risk with no operating history — you can look at, like Calvin was talking about, experienced management team, have they done this before, is this within the industry, is this just another round, versus we've seen groups where they've got the real estate, some other manufacturing background, they're going to get into this, find a cultivator, run it — higher risk — versus if it's a team that did this in Colorado or Massachusetts, doing it for round two or round three, they've got a playbook that they're going to follow, versus creating a playbook as they go along.

Host: Absolutely, great comments, agreed — thank you for going into so much detail regarding the difference between the asset, income, and market approaches, I've seen all these variations over my time, and a lot of the talk of entrepreneurship and disposable income is really that income approach, right, it's "we want that money coming in every month, we want those checks coming in, we know what the net is on the business, and we expect those future cash flows over the next five years," so thank you for breaking that down for us.

Live Q&A: Debt Financing and Valuation

Host: Calvin, there's a question — I'm not sure I get it right away, but — how does acquisition of debt financing affect valuations?

Calvin Shannon: Well, that's a great question, I'll rattle on a little about the different ways it could impact it. Let's say the debt financing was used to acquire production assets, and the exact right amount of debt financing was received, and the exact right amount of production assets was required, and those assets were then put into production to generate cash flow. The debt financing, from its debt repayments as well as interest repayments, are both going to reduce these future cash flows, which would then reduce the value — so it's like, well, why take debt financing? Well, if it was used to acquire assets in the exact correct amount, and those assets are producing cash flow, you wouldn't have had this extra cash flow in the first place without the debt. So basically that's going to reduce the net cash flow down to the cash flow after the debt service payments, and that's the cash flow that's going to be discounted to arrive at your value — that's a great question.

Corey Parnell: Yeah, so, Calvin, that's what we were just looking at last week for a client, they were going for round two of potential transfer finance funding, and trying to determine if they'd do it through debt financing or equity, and, unfortunately, the interest rate, and then warrants tied to it, all had to be taken into consideration — it was like a 12 percent interest rate plus a bunch of warrants, comparing how that impacts the future cash flow, or the present value of that cash flow, versus the cost of equity, versus not doing debt financing at all — we just went through that analysis.

409A Valuations Explained

Host: Wonderful, and now getting to 409A — this is something I have a lot of experience with, but before I started rambling more about the income approach, you were going to ask about the services valuations provide, so sorry about interrupting.

Calvin Shannon: No, no, go ahead, go ahead. Circling back on business valuation, and the type of services someone like myself would provide — basically there are different levels of service, and this drives the cost and how long it takes to get done. The highest level is where we'd write a report and literally provide an opinion, "this is our opinion of what the value, or range of value, is as of a certain date" — for obvious reasons this is more costly, because, using our professional standards, we have to check a bunch of boxes, go through a bunch of steps, consider all the approaches we discussed. A step down from that is what's called a calculation engagement, which is less in scope, and most of the time that would arrive from a conversation with a potential new client where we determine a calculation engagement would work for them, meaning they weren't going to — and now, jumping forward a little, what is different about a 409A valuation than what we've been talking about up to this point in the conversation — not a lot, other than one difference I'll talk about in a second. The 409A valuation is a tax valuation, so, again, it's going to use the fair market value standard, which we defined earlier, and it'll go through all the approaches we talked about, everything's the same, but then, a lot of times, the 409A valuation, once it arrives at the enterprise value, or the value of the entire entity, needs to do some additional work to allocate those values across a capitalization table — specifically, for the stock options, those options are going to have some portion of the total value, so you need to do some more work to arrive at the value of those stock options. So that's my high-level description of what a 409A is, and when and how it's necessary. Corey, do you have some thoughts I didn't cover?

Corey Parnell: No, I don't think so — I think on 409A, though, one thing we've been bumping into in the marketplace is cap table management software platforms, and some of those offer components of the 409A, which, if you went down that path, we'd normally consult the client through that process — and, again, that's normally where you'd want a cap table anyway, because you're going to track everyone, not just the options but the investments, additional dilution you anticipate going into the future. So, we have no stake in the ground, our purpose is really to find the best solution for our clients, to keep moving forward, so, in regards to 409A, we find ourselves doing more consulting work around that, and if there's a cap table solution that can provide the 409A that's compliant with the IRS, that's a direction we've seen a lot of our clients using in the marketplace.

The Impact of IRC Section 280E on Valuation

Host: Wonderful, and we have about eight minutes left, so I wanted to open it up to the audience for questions, but in the meantime, can we talk a little about the impact of Code Section 280E on valuations for these types of companies?

Calvin Shannon: Yeah, basically, recapping what I described before, the value of a company is the value of the future cash flows, after taxes, to its owner, that's what the owner is buying, and what 280E does, at a high level, is it makes a company trafficking, or selling, high-THC cannabis pay their taxes at the gross margin level, as opposed to the net income level, so it just pays a lot more in taxes, therefore reducing the cash flow available to owners, and therefore reducing the value. And, maybe one additional comment — when you're doing the market approach, remember that's when you compare a similar company that's sold, and a lot of times, when doing a market approach, you use a metric like the sales price as a ratio of total revenue of that company — I'd be leery about that with a 280E company, because that completely disregards what the 280E impact is, since it doesn't look at operating costs, only revenue, and maybe the subject company is a retailer with an excessive amount of marketing-type costs, and accordingly 280E is just going to absolutely hammer this company, because none of those marketing costs get deductions, so that would really drive down what their after-tax cash flows would be — so the revenue multiplier might not be all that relevant.

Corey Parnell: One thing that makes me think, though, Calvin — again, you've got market conditions versus the rules we have to follow in doing the valuation, and what comes to mind is, you might have, in a particular market — I'm thinking Colorado, probably not currently, because of price pressure over production — but in a marketplace where someone just wants the ability to grow more plants, they'll go buy some licenses to get 5,000 or 10,000 more plants, or they're looking at, "hey, we need four more dispensaries, these are key market areas we want to expand into so we can sell off our product." In those cases you might see the rule of thumb — I think Jim always mentions 0.8 to 1.2 of revenue — and that could be the outcome you sell for, but it's more because it's a strategic buyer with reasons to deploy that investment to expand cultivation, manufacturing, or retail footprint.

Calvin Shannon: Agreed, agreed.

Closing Remarks

Host: Well, we're wrapping up here, and I just want to thank you both, Calvin and Corey, for all your insights, very knowledgeable and informative session, we're getting a lot of comments from the audience about how much they enjoyed it, and if you didn't have a chance to watch the full session today, we'll be emailing you the full recording tomorrow, so feel free to reference back. And, if you're in need of a valuation, or need to look at your multiples as a business, Calvin and Corey are both more than qualified in the cannabis industry, working with Bridge West, and they've shared all their insights today on why it's important to get a valuation, the steps in the process, the different approaches — asset, income, and market — and we also touched on 409A and 280E. Thank you gentlemen for the insights, is there anything else you'd like to add, or anywhere people can find you to book a meeting?

Corey Parnell: Yeah, may I first say, again, thank you for this opportunity, appreciate it, and also thank you to all the participants who tuned in and contributed some questions. And the best way to reach us is probably through our website, that'll have our contact information — and I see somebody just put it in the comments, thank you.

Host: Yeah, of course.

Corey Parnell: Again, thanks, and if you go to our website there's a "schedule" button, no fee associated with that, just provide your name and contact info, and our admin will schedule a meeting to see how we might be able to help you.

Calvin Shannon: Again, thank you for joining us today, and hosting this.

Host: Always, thank you, Corey and Calvin. And once again, this is your host, signing off here with MediaJel — MediaJel is a cannabis marketing platform that connects brands and retailers with cannabis consumers through our ad network of mainstream publishers, mobile apps, games, and TV, so you can advertise cannabis compliantly to 21-and-up audiences on mainstream media, like ESPN, Sports Illustrated, GQ, dating apps, gaming apps, everything — so just want to make sure everyone knows that, and is aware of your capabilities available in the cannabis space. Thank you again, catch the team here at bridgewestcpas.com, and mediagel.com on our side. All right, take care.

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