Gross margin is a critical factor that significantly impacts the acquisition potential of a retail store. It represents the percentage of revenue remaining after subtracting the cost of goods sold (COGS).
Striking the right balance in gross margin is essential for the valuation and attractiveness of a cannabis business. So what is an acquirer looking for? High or low retail gross margins?
Finding the optimal gross margin balance is crucial. It demonstrates a retailer's ability to balance pricing and profitability, indicating a sustainable and attractive business model. Acquirers seek opportunities with healthy margins that indicate long-term potential and room for growth.
The gross margin of a retail store plays a pivotal role in its acquisition prospects. Maintaining a reasonable margin is essential for attracting potential buyers and ensuring a favourable valuation. Striving for an optimal gross margin balance is a crucial strategy for cannabis retail businesses seeking acquisition opportunities.
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