5 Key Documents to Prep for a Faster Sale

If your cannabis sale is dragging on, it’s rarely because the buyer needs more time to think. It’s usually because the buyer is waiting on deliverables from the seller, and the initial flow of information sets the pace for the rest of the deal. The fastest closings, whether a single store dispensary or a mid-scale cultivation site, have one thing in common: the seller came prepared with a clean and credible document set before the first buyer call. After 10 years in this industry, I’ve learned: Buyers do not move faster. Lenders do not move faster. Regulators do not move faster. It’s up to sellers and their representatives to deliver pertinent information as quickly and succinctly as possible. Get these five packets dialed in before you go to market and you will shave weeks off due diligence, maintain leverage in negotiations, and avoid the quiet buyer drift that kills deal momentum.

1) Corporate Book and Cap Table Proves You Can Actually Sell

Why it matters

Authority and ownership are gating items. Especially in the current distressed environment where capital stacks are complex and often riddled with various loans and liens, no buyer wants to waste time on an asset if only one of the partners is ready to sell, or if there’s a lender with a security interest in the license preventing a sale. If counsel cannot confirm who owns what and who can sign, everything stops. The clearer you present authority and ownership, the faster you can enter meaningful negotiations.

What to prepare

• A simple org chart that shows every entity and which entity holds each license or property. If there are leases between OpCos and PropCos, reflect that in the org chart.
• Formation documents. Articles of Incorporation or Organization, bylaws or operating agreement, and all amendments for each entity.
• A complete cap table for each entity. Subscription agreements, notes that convert to equity, warrant schedules, vesting status, repurchase rights.
• Any investor rights agreements, voting agreements, and drag or tag provisions that might be triggered by a change in control.
• Board and shareholder resolutions authorizing a sale. Draft them now and finalize at definitive agreements so signatures are minutes away when needed.
• IRS Employer Identification Number letter, state certificates of good standing, and any foreign registrations.

Common tripwires

Handshake investments with no paperwork. Unrecorded option exercises. Side letters that quietly require a consent. A voting agreement that nobody remembers. Clean these up now, not under a signing deadline with a lender breathing down the buyer’s neck.

Operator tip

Create a single PDF binder that bookmarks every exhibit in order. Name files with a consistent pattern like Corp Book Section Number Document Name so counsel can navigate in seconds. Consistency is the first impression of credibility. This extra effort will set you apart from other assets and will help support your asking price.

2) License and Local Approvals Packet Show the Transfer Path Is Real

Why it matters

Cannabis license transfers and change of ownership rules vary widely by state and municipality. Since most buyers won’t close on a transaction until they have regulatory approval to own or operate the license, your closing timeline is directly tied to the transfer process. Showing a clear path to license transfer will start the deal with increased buyer confidence and speed up negotiations.

What to prepare

• State license certificates, renewal receipts, and any prior approval notices.
• Local approvals. Conditional use permits and entitlements, zoning confirmations, fire permits, certificate of occupancy, and any conditions of approval that must carry forward.
• A transfer roadmap. Required forms, fees, background steps, any hearings, and a realistic calendar duration with named points of contact at agencies.
• A compliance file. Inspection summaries, Notices of Violation with cures, recall history if any, and the small set of standard operating procedures that matter for safety and compliance. A buyer will want to know if there are any open compliance items that could impact license transferability.

Special items for cultivation and manufacturing

Hazardous materials / solvent disposal permits, wastewater and air / emissions permits, and fire marshal approvals. Missing one line item can delay approvals thirty to sixty days. A one-page permit index with dates and renewal triggers is a great resource to have prepared.

Operator tip

Write a two-page, plain English overview titled How This License Transfers in Our Jurisdiction. Include a diagram that shows what must happen and when. You will answer half of counsel’s questions before they ask them.

3) Financials and Tax Dossier Derisks 280E and Normalizes the Story

Why it matters

Buyers don’t expect perfection, but they look for coherence. Numbers should reconcile to bank statements, to inventory movement, and to what is observable on the ground.

What to prepare

• Trailing 24 to 36 months of monthly profit and loss, balance sheet, and cash flow, plus year-to-date monthly financials and three prior years’ tax returns.
• A clear 280E schedule. What is excluded, what is capitalized, and the methods you use. Note any cost segregation, any inventory method changes, and the dates they were adopted.
• Revenue detail. Sales by channel and product, gross margin by category, average ticket, discount rates, promo mix.
• Inventory valuation method and a roll forward that ties to a month end snapshot from your state inventory tracking system or portal.
• A debt schedule with balances, rates, maturities, and covenants. Accounts receivable and accounts payable agings that tie to the general ledger.
• Tax items. State cannabis excise filings, sales and use tax, payroll tax status, and any tax clearance or no lien letters.
• Bank statements that tie cleanly to monthly cash flow and that show the timing of tax remittances and landlord payments.
• Inventory and sales reports that align with your books, produced from your state-mandated inventory tracking system or portal. You do not need a dissertation, you just need reconciled exports that tie to your month-end figures.

Metric nuance by business model

Dispensary: Loyalty program participation and cohort retention. Footfall and conversion rate. Promo mix by week. These are the levers behind the revenue line, and a buyer will back into margin quality from them.

Cultivation and processing: Yields per square foot and per light if applicable. Batch pass rate. Potency ranges. Order fill rate and on time delivery. Energy cost per pound and water cost per pound. All-in cost per pound of dry flower and fresh frozen.

Manufacturing: Throughput by line. First pass yield. Returns and warranty or credit rates. Cycle time from raw material to finished goods. Quality control escape rate.

Narrative that connects the dots

Write a one-page financial narrative. Explain obvious seasonality. Call out any period with a known one-time event. Flag new store openings or a major wholesale account that came online. The goal is to make someone say, “That matches what I see in the numbers and what you show me in person.”

Operator tip

Standardize month-end close. Pick a date. Lock it. Archive a read only folder for each month with financial statements, bank statements, inventory roll forward, and tax confirmations. Buyers pay for discipline because they know it reduces operational risk.

4) Real Estate and Facility File Confirms You Can Operate on Day One

Why it matters

Zoning, power, and lease terms determine continuity of operations. Landlord signatures are often the slowest part of any deal. If you can show that the building supports the license and that the rights to occupy can move with the business, the buyer’s risk meter drops.

What to prepare if you own the real estate

• Grant deed and a preliminary title report with exceptions explained in plain language.
• An ALTA survey if available.
• A Phase One Environmental Site Assessment, ideally less than twelve months old.
• Building permits and certificate of occupancy.
• As-builts and floor plans that show secure areas and utility runs.

What to prepare if you lease

• A fully executed lease with all amendments and options.
• A rent schedule and common area maintenance reconciliations.
• Assignment and transfer clauses summarized in one paragraph.
• Subordination, non-disturbance, and attornment if applicable.
• A draft landlord consent and estoppel. You can mark it as a draft so your landlord does not feel trapped, but get it into the conversation early.

Facility specifications that matter to operators

• A single line electrical diagram and a one-page summary of power capacity in amps and kVA and any expansion path with utility.
• HVAC tonnage and age by unit.
• Water usage, wastewater permits, and any pretreatment requirements.
• A critical equipment list with serial numbers and warranty or lease status.
• Zoning confirmation letters and buffer maps.
• Any conditions of approval that dictate hours, security, or odor control.

If you are mid buildout

Provide stamped plans, permit status, the general contractor agreement, and a budget to complete with a realistic timeline. Buyers price completion risk. Give them facts, not guesses.

Operator tip

Create a two-tab spreadsheet. Tab one is Facility Specs with capacities, dates, and service providers. Tab two is Real Estate Rights with renewal dates, notice windows, and consent requirements. When counsel asks a date, you have it in three seconds.

5) Liens, Contracts, and Tripwire Obligations Prevent Surprise Vetoes

Why it matters

Momentum killers are often hidden liens or a material agreement with a strict change of control clause. Do not let the buyer’s paralegal be the first to find them.

What to prepare

• Uniform Commercial Code and lien search results for all entities with dates and jurisdictions.
• Draft payoff letters for secured debt and equipment leases with good through dates and wire instructions ready for closing.
• Key contracts. Supply, distribution, white label, software including point of sale and inventory tracking, payment processing, logistics, and any exclusivity. Flag change of control and assignment terms in a one-line summary.
• Intellectual property assets. Trademarks, trade names, domain registrations, license agreements, and work-for-hire or assignment agreements for contractors.
• Employment records. Executive agreements, equity and option plans, and any union or collective bargaining agreements.
• Litigation and disputes. Docket summaries, claim amounts, insurance coverage status, and counsel contacts with a sentence on posture and expected timeline.
• Government inquiries. If any investigation or inquiry exists, include correspondence and your counsel’s summary of status.

Buyer Questions You Should Answer Before They Ask

Corporate and authority

• What entities are involved and how are they related.
• Who can sign for each entity.
• Whose consent is required for the transaction.
• What investor rights might be triggered.

Licenses and local approvals

• What forms and fees are required.
• Which background checks are required and for whom.
• Whether hearings are required and how far out they are scheduled.
• Any open notices or corrective actions and the status of each.

Financial and tax

• How 280E is handled and whether there are any open audits.
• Why gross margin moves month to month and whether there is seasonality.
• How inventory is valued and how often counts are done.
• How revenue from discounts and promotions is recognized.

Real estate and facility

• Power capacity, expansion path, and utility timelines.
• HVAC capacity relative to canopy or production square footage.
• Wastewater permits and any pretreatment requirements.
• Assignment rights and landlord consent timing.

Liens and contracts

• What liens exist and payoff mechanics.
• Which contracts contain change of control or assignment restrictions.
• Which trademarks are registered and in use.
• Any open disputes and the realistic range of outcomes.

The Tone That Builds Trust

Think of diligence as show and tell for grownups. Do not oversell. Do not hide the ball. Speak plainly. If you made a mistake last year and fixed it, say so and show the cure. If you have a permit renewal coming up, say the date and show the draft application. Honesty accelerates deals because it reduces the time buyers spend hunting for “gotchas”.

Writing style that helps

• Short sentences.
• Concrete numbers.
• Dates on everything.
• Explanations that a smart non specialist can follow.
• A bias to written confirmations over verbal assurances.

Frequently Missed Items That Delay Closings

• Unknown property liens that require creditor releases. Run title and UCC searches early!
• Expired certificates of insurance that require a broker’s turnaround.
• A missing signature on an old lease amendment that surfaces during estoppel.
• A lapsed city business license that takes a week to reinstate.
• Unpaid taxes that impact license transferability.

Pro tip

Create a preclose scrub checklist for each function. Insurance, real estate, finance, compliance, and operations. Assign owners and due dates, and review progress weekly on standing calls.

About CannaMLS

CannaMLS is a U.S. marketplace where cannabis operators and real estate owners advertise licensed cannabis facilities for sale and lease. CannaMLS has a public catalog showing hundreds of cannabis properties and licenses available nationwide. Designed specifically to help operators find their place in the cannabis industry, CannaMLS offers built in messaging, advanced search filters, and a directory of PROs that specialize in cannabis transactions from coast to coast.