Glossary
Terms used in a cannabis sale.
Definitions written for buyers, sellers, and counsel — not a lifestyle glossary.
Federal and state law current as of September 2026 — verify with counsel.
280E
280E: IRC §280E. Disallows ordinary deductions for Schedule I/II trafficking. Medical Schedule III activity generally Book a confidential intro call.
ABC (assignment for benefit of creditors)
ABC (assignment for benefit of creditors): A state-law assignment of assets to an assignee for creditors. No federal stay. Book a confidential intro call.
Adult-use
Adult-use: State-licensed cannabis for adults 21+ without a patient card. Still Schedule I federally as of September 2026 Book a confidential intro call.
Agent badge
Agent badge: Worker credential. Badges do not always transfer with the sale. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Ancillary business
Ancillary business: A non-plant-touching firm that serves licensees. Overlapping buyers, different federal object. Book a confidential intro call.
APA
APA: Asset purchase agreement. Buyer picks assets; licenses still need the agency. Verify with counsel. Educational only. Book a confidential intro call.
Background check
Background check: Criminal and sometimes financial review of disclosable persons. Verify with counsel. Educational only. Book a confidential intro call.
Bankruptcy gap
Bankruptcy gap: The practical inability of domestic plant-touching debtors to use chapter 7 or 11. Chapter 15 is a narrow Book a confidential intro call.
Basket size
Basket size: Average retail ticket. Useful, not a valuation method by itself. Verify with counsel. Approval-aware process. Book a confidential intro call.
BioTrack
BioTrack: Another track-and-trace vendor used in some states. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Blind teaser
Blind teaser: A one-pager that does not name the store or the owner. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Buffer zone
Buffer zone: Spacing from schools and other sensitive uses. A site that violates a buffer is not a site. Educational only. Book a confidential intro call.
Cannabis REIT
Cannabis REIT: A landlord vehicle that buys cannabis real estate. Name a specific REIT only from a filing. Sept 2026 law. Book a confidential intro call.
Canopy
Canopy: The licensed plant-canopy area. Valuation sometimes talks per square foot; the market talks cost per pound. Book a confidential intro call.
Cashless ATM
Cashless ATM: A payment workaround. Treat durability as a diligence risk, not a feature. Verify with counsel. Book a confidential intro call.
CBD
CBD: A cannabinoid. FDA has not approved CBD as a general food/supplement. Do not make medical claims on this site. Book a confidential intro call.
Change of ownership
Change of ownership: The regulator event that actually transfers control. Thresholds differ by state. Verify with counsel. Book a confidential intro call.
CIM
CIM: Confidential information memorandum. Goes out after NDA and eligibility. Verify with counsel. Approval-aware process. Book a confidential intro call.
COGS
COGS: Cost of goods sold. The main remaining deduction under 280E, as case law allows. Verify with counsel. Sept 2026 law. Book a confidential intro call.
Conditional license
Conditional license: A license that becomes annual after conditions. Transfers may be frozen until conversion. Book a confidential intro call.
Consumption lounge
Consumption lounge: On-site consumption license, only where state and city both allow it. Verify with counsel. Book a confidential intro call.
Cost per pound
Cost per pound: Fully loaded cultivation cost. If it exceeds wholesale, the canopy is a liability. Verify with counsel. Book a confidential intro call.
Cultivation license
Cultivation license: Authority to grow. Value tracks cost versus wholesale, not the paper number in an open state. Book a confidential intro call.
Cultivation tax
Cultivation tax: A tax on canopy or weight. California’s history is the usual case study; confirm current law. Book a confidential intro call.
CUP
CUP: Conditional use permit. A land-use hearing, not a cannabis license. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Decoupling
Decoupling: A state return that allows ordinary deductions while federal 280E still applies. Confirm the statute. Book a confidential intro call.
Delivery license
Delivery license: Last-mile authority. Cities can ban it even when the state allows it. Verify with counsel. Book a confidential intro call.
Delta-8 / intoxicating hemp
Delta-8 / intoxicating hemp: Hemp-derived intoxicating cannabinoids. Many SKUs fall outside hemp after the 2026 Book a confidential intro call.
Distribution license
Distribution license: Authority to move wholesale product. Not every state uses this class. Verify with counsel. Book a confidential intro call.
Dual license
Dual license: Same operator holding medical and adult-use rights. Books must be apportioned for 280E after the 2026 split. Book a confidential intro call.
Earn-out
Earn-out: Deferred price tied to future performance. Fragile when the buyer cannot yet control the license. Sept 2026 law. Book a confidential intro call.
EBITDA (pre-280E)
EBITDA (pre-280E): Earnings before the 280E cash hole. Buyers still spend after-tax cash. Verify with counsel. Book a confidential intro call.
Escrow pending approval
Escrow pending approval: Purchase price sits until the regulator says yes. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Excise tax
Excise tax: A cannabis-specific tax on wholesale or retail. Stack it on top of sales tax. Verify with counsel. Book a confidential intro call.
Extraction
Extraction: Concentrating cannabinoids under a manufacturing license. Residual-solvent history is a diligence item. Book a confidential intro call.
Farm Bill
Farm Bill: 2018 statute that defined hemp at 0.3% delta-9 THC. Being overwritten by P.L. 119-37 on 12 November 2026. Book a confidential intro call.
Financial interest
Financial interest: A right to revenue or control that must be disclosed even below 51%. Verify with counsel. Book a confidential intro call.
FinCEN guidance
FinCEN guidance: FIN-2014-G001. Still the SAR frame for marijuana-related accounts. Verify with counsel. Educational only. Book a confidential intro call.
Hemp
Hemp: Cannabis at or below the statutory THC definition. The definition is changing in November 2026. Verify with counsel. Book a confidential intro call.
Holdback
Holdback: Cash retained for tax, compliance, or working-capital true-up. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Holding period
Holding period: Time during which a license cannot be sold, or can be sold only to a qualified transferee. Sept 2026 law. Book a confidential intro call.
Landlord consent
Landlord consent: Written permission for cannabis use and for the buyer’s assignment. Handshake is not enough. Book a confidential intro call.
License cap
License cap: A statutory or regulatory limit on how many licenses of a type exist. Caps create license-value floors; open Book a confidential intro call.
License value
License value: What the paper is worth without operations. Real in capped states; often ~$0 in open ones. Educational only. Book a confidential intro call.
Limited-license state
Limited-license state: A state where the scarce object is the license (or the local seat), not the ability to apply Book a confidential intro call.
Local approval
Local approval: City or county permission. Often scarcer than the state license. Verify with counsel. No invented listings. Book a confidential intro call.
LOI
LOI: Letter of intent. Must carry the approval contingency or it is fiction. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Manufacturing license
Manufacturing license: Authority to make infused products or extracts. COAs and occupancy matter more than the logo. Book a confidential intro call.
Medical-only
Medical-only: State program limited to registered patients. Medical product sat in Schedule III after 28 April 2026 if it Book a confidential intro call.
METRC
METRC: A common seed-to-sale system. Exports are the revenue truth, not a vanity P&L. Verify with counsel. Sept 2026 law. Book a confidential intro call.
Microbusiness
Microbusiness: A capped, often vertical small-license class with extra transfer or eligibility rules. Verify with counsel. Book a confidential intro call.
MIPA
MIPA: Membership interest purchase agreement. Equity deal. Liabilities travel unless carved. Verify with counsel. Book a confidential intro call.
MSA (management services agreement)
MSA (management services agreement): A contract to operate or advise. Illegal if it transfers control before approval. Book a confidential intro call.
MSO
MSO: Multi-state operator. Name one only from a filing or a sourced article. Verify with counsel. Law dated September 2026. Book a confidential intro call.
NDA
NDA: Nondisclosure agreement. First paper after the teaser, not a social-media teaser. Verify with counsel. Sept 2026 law. Book a confidential intro call.
Opt-out
Opt-out: A locality that refuses adult-use retail or a license type. Common and deal-killing. Verify with counsel. Book a confidential intro call.
Oversupply
Oversupply: More canopy than the legal channel will pay for. Cultivation’s recurring problem in open states. Book a confidential intro call.
Ownership disclosure
Ownership disclosure: The chart the agency wants, including entities all the way to humans. Verify with counsel. Book a confidential intro call.
Potency tax
Potency tax: A tax that scales with THC. Illinois is the usual example — verify the current rate. Verify with counsel. Book a confidential intro call.
Price compression
Price compression: The drop from 2019–2021 multiples to mid-single-digit public comps and 3x–6x private commentary. Book a confidential intro call.
Provisional license
Provisional license: A not-yet-operating award. Price is option value, not cash flow. Verify with counsel. Sept 2026 law. Book a confidential intro call.
QoE
QoE: Quality of earnings. In cannabis it includes track-and-trace and 280E, not just add-backs. Verify with counsel. Book a confidential intro call.
Receivership
Receivership: State-court fiduciary control used because chapter 7/11 is generally closed. Verify with counsel. Book a confidential intro call.
Rescheduling
Rescheduling: Moving marijuana between CSA schedules. Medical/FDA products moved in April 2026; adult-use hearing remains. Book a confidential intro call.
Residency requirement
Residency requirement: A rule that some owners live in-state. Many have loosened; none should be assumed away. Book a confidential intro call.
Revenue multiple
Revenue multiple: Price ÷ sales. Used when EBITDA is negative. Commentary 0.5x–1.5x for some single stores. Sept 2026 law. Book a confidential intro call.
Sale-leaseback
Sale-leaseback: Sell the building, lease it back, use proceeds as capital. Dominant real-estate finance tool. Book a confidential intro call.
SAR
SAR: Suspicious activity report. Marijuana Limited / Priority / Termination categories still appear in examiner aids. Book a confidential intro call.
Schedule I / III
Schedule I / III: CSA classes. I: 280E and high federal exposure. III: medical order of 28 April 2026; ordinary deductions Book a confidential intro call.
Security interest in a license
Security interest in a license: A promised lien on the license itself. Many agencies will not recognize it. Sept 2026 law. Book a confidential intro call.
Seed-to-sale
Seed-to-sale: The statutory idea behind track-and-trace: every gram accounted for. Verify with counsel. Educational only. Book a confidential intro call.
Seller note
Seller note: Seller-financed paper. Common. License liens are often unenforceable. Verify with counsel. Educational only. Book a confidential intro call.
Social equity
Social equity: License classes or points for specified communities. Transfers are often restricted. Verify with counsel. Book a confidential intro call.
SSO
SSO: Single-state operator. Often the actual buyer of a one-store file. Verify with counsel. Law dated September 2026. Book a confidential intro call.
Testing lab
Testing lab: ISO laboratory license. Independence rules often limit who may own it. Verify with counsel. Educational only. Book a confidential intro call.
Tier
Tier: A license size class (plants, canopy, or revenue). Moving tiers is often a new application. Verify with counsel. Book a confidential intro call.
Track-and-trace
Track-and-trace: The state system that tags plants and packages. Buyers reconcile it to the books. Verify with counsel. Book a confidential intro call.
Transfer approval
Transfer approval: Written agency consent. Not a county clerk stamp. Verify with counsel. Law dated September 2026. Book a confidential intro call.
True party of interest
True party of interest: Anyone the state treats as an owner or influencer, including some lenders and managers. Book a confidential intro call.
Vertical integration
Vertical integration: One owner stack across cultivation, manufacturing, and retail. Some states require it, some forbid Book a confidential intro call.
Wholesale price
Wholesale price: What flower or trim actually fetches. State dashboards beat anecdotes. Verify with counsel. Book a confidential intro call.