Intangible Assets in the Cannabis Industry – Measuring the Success of Acquisitions

By Noam Hirschberger, CFA, CVA, Principal, Co-Lead of Cannabis Practice

Article Excerpt:

In the last year, a lot of attention has been given to the amount of goodwill on cannabis companies’ balance sheets. Several articles argue that that many multi-state operators (MSO’s) have grossly overpaid for their acquisitions and warn investors that write-downs are inevitable. Given that some high profile MSO’s have recently announced large impairment charges and the fact that a significant amount of intangible assets still remain on many of their balance sheets, it is easy to understand why analysts have honed in on the issue. This article will provide investors with tools to understand accounting for intangible assets and how they can provide useful insight about a company’s acquisition strategy. We will also provide tools for CFOs of cannabis companies that can facilitate the process for purchase price allocations and testing for goodwill impairment.

Read the full article here.

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If you have questions related to goodwill in the cannabis industry, we are here to help. Contact Noam Hirschberger at 646.449.6363 or [email protected] or Jeff Gittler at 551.249.1833 or [email protected].