Cannabis business valuation calculator

What the valuation calculator computes

The tool returns a low and a high illustrative enterprise value for a licensed cannabis business. It is built on an EBITDA multiple, which is how most profitable cannabis operations are priced, with two adjustments that are specific to this industry: license scarcity and medical revenue mix. The reasoning behind multiples is set out on cannabis business valuation; this page documents the tool.

The formula

The calculator runs exactly this arithmetic:

• Low = EBITDA x (3 + cap) + revenue x 0.15 x medical share
• High = EBITDA x (6 + 0.5 x cap) + revenue x 0.25 x medical share

where cap is 1 for a capped or limited-license market and 0 otherwise. So the EBITDA multiple is 3x to 6x in an open market and 4x to 6.5x in a capped one.

Inputs

Input	What to enter	Effect
Normalized pre-280E EBITDA	Trailing twelve months, adjusted for one-offs and market-rate owner pay, before federal income tax	Main driver
TTM revenue	Trailing twelve month net revenue	Used only in the medical term
Medical revenue share	A decimal from 0 to 1, for example 0.3 for 30%	Scales the medical add-on
Capped or limited-license market	Yes if the state or city limits license numbers	Adds 1.0x to the low multiple and 0.5x to the high

Why these defaults

The 3x to 6x band. Viridian Capital reported a median enterprise value of 5.1x 2026 EBITDA for 11 larger U.S. MSOs in November 2025, down from 7.8x forward EBITDA in June 2024. Private single-license businesses usually trade below public multi-state groups because they are smaller, less diversified, and harder to finance. The band is a broker commentary range around those reference points, not a statistical finding.

The cap flag. Where new licenses are not available, buyers pay for entry. TerrAscend’s July 2026 agreement to buy a New Jersey store for $9 million against more than $10 million of annualized revenue is an example of limited-license pricing. The subject is covered on license value in capped vs uncapped states.

The medical term. The April 2026 order placed state-licensed medical marijuana in Schedule III, so qualifying medical activity is outside section 280E going forward. The add-on is a simple proxy for the higher after-tax cash that medical sales now produce. The full argument is on how 280E affects valuation.

Worked example

Illustrative, using the tool’s default inputs: a dispensary in a capped market with $400,000 of EBITDA, $2,500,000 of revenue, and 30% medical sales.

Step	Low	High
EBITDA multiple	3 + 1 = 4.0x	6 + 0.5 = 6.5x
EBITDA component	$400,000 x 4.0 = $1,600,000	$400,000 x 6.5 = $2,600,000
Medical component	$2,500,000 x 0.15 x 0.3 = $112,500	$2,500,000 x 0.25 x 0.3 = $187,500
Illustrative value	$1,712,500	$2,787,500

Switch the cap flag to No and the range becomes $1,312,500 to $2,587,500. The cap flag moves the low end more than the high end by design: scarcity protects the floor more than it lifts the ceiling.

From the range to a price

The output is an enterprise value. To get toward what a seller keeps:

1. Subtract interest-bearing debt, tax liens, and unpaid taxes that will be settled at closing.
2. Adjust for inventory and working capital against the level the deal assumes.
3. Add owned real estate if it is included, valued separately.
4. Consider structure. A price paid partly by seller note or earn-out is worth less than the same price in cash.

Limitations

• The tool uses one multiple band for every kind of license; how methods differ is on valuation methods by license type. It also ignores location, lease term, compliance record, and local wholesale or retail price trends, all of which move real offers.
• It does not work for loss-making, pre-revenue, or distressed businesses. See valuing a pre-revenue license and valuing a distressed cannabis business.
• The medical add-on is a rough proxy. Treasury had previewed, but the IRS had not issued, detailed transition and apportionment guidance as of September 2026.
• Multiples change. The cited public figures fell by about a third between mid-2024 and late 2025.

For fuller arithmetic across four business types, see cannabis valuation worked examples. This page and the tool are educational and are not a valuation opinion, appraisal, or tax advice. For a broker opinion based on your actual numbers, you can book a confidential intro call.