Should we buy this Pot Business Credit Card Processor? - Acquisitions Anonymous episode 151

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Michael Girdley (@Girdley) and Bill D’Alessandro (@Bill) talk about an online medical marijuana card processor. We discuss how this business operates and why the margins are so big. We guess that this business is underperforming, and we explain how we’d go about scaling it up.

Similar to the general licensing requirements, the requirements for obtaining a business license for cannabis are highly variable from one state to the next and even between municipalities. We also talk about the potential risks that would make this business worth zero dollars overnight.

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Show Notes:

(00:00) - Introduction

(00:34) - Our Sponsor is Cloudbookkeeping

(02:01) - Deal & financials: Medical Marijuana Card Processor

(09:43) - How does this business work?

(10:30) - What do we like about this business?

(12:36) - What are the two things that can happen to this business?

(13:20) - Did the pandemic affect this business?

(14:02) - How big do we think this business is?

(14:41) - Where do the high margins come from?

(15:45) - Where is the value in the revenue structure?

(18:25) - What is a cool strategy competitors can do in this line of business?

(23:16) - What does this business remind Bill?

(24:44) - How do entrepreneurs take advantage of stupid regulations?

(26:43) - What’s the story behind “A dollar for a dollar”?

(32:24) - We like this deal. Who could be a fit as a buyer?

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Additional episodes you might enjoy:

#149 - Is this car spinner business a good side hustle?
#148 - Growth Marketing explained: Shopify Superfood Greens Brand with 40% subscription rate w/ Baller Jesse Pujji
#147 - $9.6M EBITDA Florida Armored ATM Services Business
#141 - A very profitable B2B Internet Business in the Petcare Vertical
#140 - Let’s SBA the heck out of this deal - with Special Guest Heather Endresen

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