What Your Dispensary Is Actually Worth

Ask most independent dispensary owners what their store would sell for and you'll get a guess. That's not carelessness. Almost every cannabis deal closes with undisclosed terms, so owners have almost nothing real to compare against.

September gave them something. A single New Jersey store doing more than $10 million a year sold for $9 million, and a third of that price wasn't paid in cash at closing.

A Rare Look at Real Terms

On September 21, MJBizDaily reported that Aunt Mary's Dispensary in Hunterdon County sold to a public multistate operator for $9 million: $6 million in cash at closing and a $3 million convertible note paying 6% interest over five years. The buyer's executive chairman put the store's revenue at "more than US$10 million" a year.

That's roughly 0.9x revenue, and less if revenue is above the $10 million floor. This wasn't a distressed sale. New Jersey recorded $1.16 billion in cannabis sales in 2025, and the state now counts more than 320 licensed dispensaries. Dividing one by the other gives a rough average of about $3.6 million per store. Aunt Mary's was doing nearly three times that, and it still sold for under 1x revenue.

It wasn't a one-off:

Deal	Price	Structure
Aunt Mary's, NJ (1 store), Sept 21	$9M	$6M cash + $3M convertible note
M3 Wellness, Hawthorne, NV (1 store), Sept 22	$500K	$290K cash + $210K in buyer's shares
PharmaCann Penn, PA (9 stores), Sept 2	$50M	Cash plus a seller note

All three paid part of the price in something other than cash. For an owner, that changes what "the price" actually means.

How Stores Are Actually Valued

The main method is an earnings multiple. A buyer takes the store's EBITDA (earnings before interest, taxes, depreciation and amortization, roughly the cash profit the operation generates), normalizes it (strips out one-offs and owner-specific costs so it reflects ordinary conditions) and multiplies it by a number. That number is the multiple.

Advisory-firm rules of thumb, per Collateral Base and Cova:

• Single stores: 3x to 6x normalized EBITDA
• Multi-store operators: 6x to 10x
• Distressed or saturated markets: as low as about 2x, with limited-license states at the high end

Small single-store shops are often priced on SDE (Seller's Discretionary Earnings) instead: profit plus the owner's own salary and perks added back. Cova's example is $400,000 in net income plus a $120,000 owner salary, or $520,000 in SDE, which then gets a market multiple.

Revenue multiples, typically 0.5x to 1.5x trailing-twelve-month sales for a single dispensary, are only a cross-check. Aunt Mary's sits inside that range. But as Collateral Base puts it, a revenue multiple "tells you nothing about profitability or cost structure." Two stores with identical sales can be worth wildly different amounts.

What Moves the Number

The biggest driver is the license. Cova notes that "the right to operate is often more valuable than the operations themselves." Capped-license states like New Jersey and Illinois carry real premiums; in open markets like Oklahoma, the license adds little. Location matters too, which is part of why a rural Nevada store went for $500,000 and a New Jersey one for $9 million.

You can't change your state. These five things you can:

1. Books a buyer can trust. Three years of P&Ls, tax returns and bank statements that tie out, with no personal expenses mixed in.
2. Records that match Metrc. Buyers check reported revenue against state tracking data. A gap between your books and Metrc or BioTrack is a red flag that can stall a deal.
3. No open compliance problems. Unresolved issues can cut a valuation by 20% to 30%, or kill the deal outright.
4. A store-level P&L. Multi-store owners need each location's profit on its own. You can't sell, or even price, a store you can't show the numbers for.
5. Documented operations. Written SOPs, a current POS and integrated systems. A store that runs out of the owner's head is worth less than one that runs without them.

Valuation is mostly a measure of how much risk a buyer has to take on. Every item above lowers it.

The Part of the Price That Isn't Cash

A seller note means the seller takes part of the price later, in installments with interest. Put plainly, the seller is lending the buyer part of the purchase price. It's an IOU, and the seller carries the risk that the buyer pays late, renegotiates or can't pay.

A convertible note can typically be converted into the buyer's shares instead of repaid in cash, so the seller may end up holding stock whose value depends on the buyer's performance. (The conversion terms of the Aunt Mary's note weren't disclosed.) Being paid in stock directly, as in the Nevada deal, carries the same exposure: that $210,000 is only worth $210,000 if the shares hold their value and can actually be sold.

Buyers ask for this because it conserves their cash and keeps the seller invested in the store after handover. That's normal in small-business sales generally. Cannabis adds two wrinkles:

• Enforceability. In September, the Sixth Circuit threw out a $31.8 million judgment on the grounds that federal courts can't enforce a contract whose performance requires violating federal drug law. Legal analysis of the ruling lists acquisition agreements and financing tied to cannabis revenue as exposed. The law is unsettled, and other circuits have ruled more narrowly, but ask your attorney about state-court venue and binding arbitration clauses.
• You become a creditor. If you wouldn't extend $3 million in trade credit to a customer without checking their cash position, apply the same discipline to a note.

When comparing offers, compare cash at closing and the risk on the rest, not the headline. A $9 million offer with $3 million deferred and a $7.5 million all-cash offer don't necessarily rank the way the headline numbers suggest.

What Rescheduling Changed, and What It Didn't

280E stopped applying to state-licensed medical marijuana on April 22, 2026, according to Houlihan Capital. Deducting rent and payroll raises after-tax cash flow, which is what multiples are applied to. Houlihan says 280E "significantly compressed valuations" and that its removal "directly enhances" them, but offers no figure and calls the full effect unclear until banking, interstate commerce and state tax questions resolve.

The catch is that old tax years travel with the business. Most cannabis sales are structured as a MIPA (membership interest purchase agreement): the buyer takes over the whole company, keeps the license without reapplying, and the seller gets capital-gains treatment. The buyer also inherits the company's history, including open 280E years. The IRS is actively pursuing them: it disallowed $4.6 million in tax at Dogtown Pioneers, including labor costs the company treated as production costs, and is suing TerrAscend to recover an $8.36 million refund.

Buyers price that exposure in through a lower price, a larger escrow or holdback, or indemnities. An owner with well-documented cost classification for 2020 through 2025 is worth more than one without. An APA (asset purchase agreement) lets a buyer avoid old liabilities, but may trigger a regulatory review of the license transfer, and approvals can take anywhere from 30 days to over six months. That's one more reason buyers push part of the price into the future.

A Scorecard You're Graded On Anyway

Clean books, records that tie to Metrc, no open compliance issues, a P&L for every store and documented cost classification don't just raise a sale price. They're what a well-run dispensary looks like. You don't need to be selling to benefit.

This post is general information, not investment, tax or legal advice. If you're weighing an offer, talk to a cannabis valuation advisor and an attorney about your specific deal.