How much is a cannabis business worth?

What actually sets the price

Value in cannabis is the present worth of cash a new owner can take out of the business, adjusted for the risk that the regulator, the landlord, or the tax authority gets in the way. Six things move the number more than anything else.

1. Verified earnings. Buyers price normalized EBITDA that ties to tax returns, bank deposits, and track-and-trace sales data. Earnings that cannot be tied out are discounted or ignored.
2. License scarcity and transferability. A capped license that can change hands has value of its own. An uncapped license mostly does not. See license value in capped vs uncapped states.
3. After-tax cash under 280E. Section 280E still disallows ordinary deductions for adult-use operators, so two stores with equal EBITDA can produce very different cash. How this flows into price is covered in how 280E affects valuation.
4. Real estate control. An owned building, or a lease with cannabis consent, assignment rights, and years of term left, is worth more than a month-to-month tenancy in a zoned-out neighborhood.
5. Compliance and tax standing. Open violations and unpaid excise or sales tax become price reductions, escrows, or deal-killers.
6. Market direction. A store in a state where prices are still falling is priced on next year’s margin, not last year’s.

What multiples are buyers paying in 2026?

Lower than most owners expect, and the public market is the reason. Viridian Capital Advisors reported in November 2025 that the 11 public U.S. multi-state operators with market caps above $100 million traded at a median 5.1x enterprise value to 2026 EBITDA, or 5.72x on Viridian’s lease- and tax-adjusted measure. The same commentary notes that sector multiples ran above 10x in earlier peak periods.

A large, liquid, multi-state company at roughly 5x sets a ceiling. A single private store is smaller, less diversified, and harder to finance, so it normally trades at or below that level unless the license itself is scarce.

Situation	Typical pricing basis	Broker range (trade commentary, 2025 to 2026)
Profitable single dispensary, stable market	Normalized EBITDA	About 3x to 6x
Multi-store group in a limited-license state	Normalized EBITDA plus license premium	About 6x to 10x in optimistic commentary
Store or grow in an oversupplied state	EBITDA, heavily stress-tested	About 2x to 4x, sometimes asset value
Non-operating license, capped state	Negotiated license price	Varies by state and transfer rules
Non-operating license, open state	Assets and lease position	Often near zero for the license itself

These are ranges drawn from trade and broker commentary, not a statistical survey, and they are not a promise of price. The dispensary valuation multiples page and the cannabis business valuation pillar work through the method and the adjustments in detail.

Why does the state matter so much?

Because the state decides whether your license is scarce and whether it can be sold at all.

In Maryland, a licensee, including one whose medical license was converted to adult use, may not transfer ownership or control for at least 5 years after licensure, with exceptions for death, disability, incapacity, bankruptcy, receivership under a lending agreement, court order, or a sale to an employee stock ownership plan. A license that cannot be sold today has option value, not market value. See the Maryland page for the local picture.

At the other end, Oklahoma’s regulator counted 1,735 growers and 1,295 dispensaries as of 1 September 2026, down from a peak of 9,402 growers in December 2021. When thousands of licenses were issued on demand, nobody pays a premium for the paper. Michigan’s regulator reported an average adult-use flower price of $60.33 per ounce in August 2026. At that price, cultivation value is a cost-per-pound question, which is covered in selling in an oversupplied market.

How does the medical Schedule III change affect value?

It raises after-tax cash for qualifying medical activity and leaves adult-use where it was. The April 2026 Federal Register order placed marijuana subject to a state medical marijuana license in Schedule III. Section 280E applies only to Schedule I and II substances, so medical activity is outside it going forward. Adult-use marijuana remains Schedule I under that order.

For a seller, that means three earnings views belong in the package: pre-280E EBITDA, after-280E cash as historically reported, and a pro forma showing the medical share under ordinary deductions. A buyer will pay for the third view only to the extent your records can split medical from adult-use sales and costs.

Illustrative example: one store, two after-tax pictures

This is an illustration with round numbers, not a valuation.

• Revenue: $4,000,000. Cost of goods sold: $2,000,000. Gross profit: $2,000,000.
• Operating expenses: $1,300,000. EBITDA: $700,000.
• Taxed as an ordinary business at a 21% federal rate: tax of about $147,000 on $700,000, leaving roughly $553,000.
• Taxed under 280E as an adult-use retailer: tax is figured on gross profit, so about $420,000 on $2,000,000, leaving roughly $280,000.

Same store, same EBITDA, about half the cash. At 4x, a buyer anchored to EBITDA would say $2.8 million. A buyer anchored to after-tax cash will argue for far less, and the final price lands between them depending on how many qualified buyers are at the table. The 280E effective tax rate calculator lets you run your own figures.

Price versus proceeds

The number on the letter of intent is not the number you deposit. Cannabis buyers cannot use SBA loans or conventional bank debt, so part of the price is commonly paid through a seller note, an earn-out, or buyer stock. Add a holdback for unpaid or disputed taxes and an escrow that releases only on regulatory approval, and cash at close can be a fraction of headline value. Compare offers on cash at close, security for deferred amounts, and who carries the risk if approval is denied. The trade-offs are laid out in cash vs stock vs seller note.

How to get to a defensible number

Start with three years of financials, tax returns, and state sales reports that agree with each other. Normalize owner pay and one-time costs. Confirm what your state and city allow you to transfer, and to whom. Then test the result against what funded buyers in your state are doing now, not what a competitor claimed to get in 2021. A broker will typically do this as an opinion of value before any marketing begins; you can request one on a confidential intro call. This page is educational and is not an appraisal, tax advice, or a guarantee of price.