Ca$hing Out 08: Post Holiday Update

"Cashing Out" Week 08 - Dan Humiston and Dena Jalbert talk about managing a deal through the end of the year holidays.  They also discuss how NY State's move to legalize adult cannabis use will increase the value of the company.

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Dena Jalbert:
This particular show in New York always has a really good turn out because the media is right down the street. I think you're going to see a three fold the attention or because it's already being covered heavily just just in the proposed legislation or talking about it and it's already creating a buzz. So if and if in fact that comes to fruition man it's going to be attending it's going to be high.

Dena Jalbert:
So there's going to be high advertisers behind it's going to be big for the show's.

Dan Humiston:
Well everyone welcome back to cashing out brought to you each week by Hoban law..

Dan Humiston:
Today we have my co-host. Dena. Jalbert from Align Business Advisory Services with me again. He Dena..

Dena Jalbert:
Hey Dan Happy New Year. Happy New Year to you too. Happy New Year.

Dena Jalbert:
We've been off for a couple of weeks with the holidays. Not a lot goes on. I suspect it's pretty common in the mergers and acquisition business that it gets quiet as you go through Christmas New Year's holiday.

Dan Humiston:
It does. Something that you battle with just about everybody.

Dena Jalbert:
Yeah. With everything from you know every type of everything we do whether it's from somebody named acquisitions we always see I call it the holiday class come about the 18th to the 20th and the month pretty much through the new year. We are seeing just a sharp fall loss. Everybody is off for holidays birthday cakes and you know we tend to have high level conversations with folks you know if they're traveling in an airport sometimes they write to respond in our you know have a couple introductory conversations but nothing really ever moves in a meaningful way over the holidays especially with the fact that are so many stakeholders in that transaction. So there's two parties obviously there's attorneys and bankers and all sorts of Dena. to get him get involved and so you know it's rare you can ever get all of those people's attention at the end of the area but now we certainly try our hardest.

Dan Humiston:
I find that you have high expectations for the holidays because you're like OK well I won't have these demands. I think people make commitments that they just there's no way they're going to be able to satisfy and especially if you're in the middle of a deal. Yes. You feel like they're just ignoring you or because we plan to talk or we plan to have this done and we plan to have this ready to go. And I think when they make the plan they have the best intentions. But once the holiday vortex hits it just don't have time and you just don't have the energy and you're like listen wait. And if you're on the wrong side of that when you're like whew maybe they don't want to do this anymore. And then you start to panic and maybe make a bad move. The key to getting through the holidays is just chill.

Dena Jalbert:
Exactly right. We tell folks all the time. Just take it for what it is and nothing more than a vacation. It doesn't mean that folks intentions have changed or better it's an indication of change in perception of the value of the deal or anything like that. It's really strictly just out of the offers. There was family in a report they had kids would be down there traveling a lot of folks tend to take overseas vacations because it's an extended period of time and so you know oftentimes that's the case they're just and truly unreachable even in today's white flight world and the physicality and get me and time changes and you know getting a hold of faces is really difficult to do but it's very easy to get tied up in that emotional connection. Know said we were going to get this done number nine. What does that mean. And it really you know it's not thing you know I'll say it sucks when you have your heart set on something getting done but don't panic don't overthink it don't overthink it please don't overthink it.

Dan Humiston:
All right.

Dan Humiston:
We're moving forward to our deal I guess. Let me just say we had some exciting news coming out of New York State which is many of our listeners know our first trade show our big trade. One of our big trade shows is in New York City. And Governor Cuomo finally came around and says look at it within the first hundred days I'm going to have some legislation on my desk to pass laws for making marijuana cannabis legal recreationally legal in New York State which is a gigantic thing for the whole country for the whole industry but particularly for this trade show. Holy cow. This is gonna be big for sure.

Dena Jalbert:
I mean we've talked about in past years that you know this particular show in New York which has a really good turnout because the media is right down the street. I think you're going to see a three fold the attention around it because it's already being covered heavily just in the proposed legislation or but talking about it. And it's already creating dies.

Dena Jalbert:
So if in fact that comes to fruition maybe it's going to be a tendency it's going to be high. So there's going to be how my advertisers are behind it's going to be big for the show.

Dena Jalbert:
So that's a really nice one for this year in particular because I'll be heading into that show. Come come. I'm sure it's going to get a lot of big momentum.

Dan Humiston:
Yeah. The exhibitors just they just benefit so much from being hit in New York because they get all this free earned media just all these interviews that otherwise they wouldn't even have a chance at this walk over to their booth and there's a camera in their face. So that's why the show is historically done great. Well and also with the investor community is all there and there's so but now we have new jersey as they have played a couple of things that they're working out but it looks like that legislation is going to be moving forward. So New Jersey is going to have a rec bill in place quickly. Yeah New York's positioning it looks out of all that. You read the tea leaves everything looks right in New York so I mean this this is this is gonna be good for the. Like I said for the entire industry. So but really the show.

Dena Jalbert:
So yeah. And taking a step further I mean you know Elizabeth Warren just declared her candidacy for president. And one of her key platform pointers is candidates and marijuana. So I think with her first coming out with the rest of her setting a precedent I think it's going to be something hotly discussed and debated and it's going to be a key item for both parties over the next year and a half as we head into the presidential elections as well. So I think the latest signing on the political landscape at a much higher level in New York leading the pack and that's going to do nothing but bodes well for this show.

Dan Humiston:
You know like the East Coast and the New England or Boston show in New England with it just like that was the sleeping giant. And now with those states coming around it's going to be new. It would be really hard for the federal government to let all this happen without getting involved so I think the dominoes are falling fast. And so let's talk about what we have to do now that the holidays are over.

Dena Jalbert:
Holidays are over.

Dan Humiston:
I'm going to give everybody sort of a recap of where we are and what we're working on over the next few weeks to try to catch everybody up to speed.

Dena Jalbert:
Absolutely. Last we spoke prior to the holiday we were having quite a few conversations with quite a few interested parties which is great. I mentioned has really kicked up. And it's interesting that different types of parties who are interested as well which I know that's always a key strategy advice for clients is getting a breath and a mix of different types of interesting kind of party. So we have investment funds in other media outlets. You know it's a wide dress. So folks who who have a real interest and we see I will say suffered a bit from the holiday glitch as I like to say we had a lot of good meetings leading right up to the holiday. But then everybody pretty much said Hey yeah let's continue conversations after the holidays. And so most of the folks are still out to the end. This week will be coming back come the seventh ish and and then you know the irony is that while the holidays are slow we often find that January becomes a bit of a shock on starting everybody is off to the races concerning for most a new fiscal year. So there's new information centers that say there's new targets there's new objectives there's new strategy for all of these interested parties and the sooner they can execute on those and start bringing in assets into the fold to help them grow and help them achieve those metrics for 2019 the better. So while it always is a bit painful to get through the quiet holiday season what we actually see is that over the next two to three weeks things are just off to the races. So for a four year deal in particular Daryn we're going to continue these conversations and they're going to they're going to take I think a hard shift into real serious terms. We're going to start talking term sheets and getting real solid interest with the momentum towards the closing. I'm hopeful now I have no crystal ball but I'm hopeful by the end of the month which I'd be wary.

Dan Humiston:
Many of the people that we're not gonna hold you to this but any of the people that we're moving into this next phase the discussions. Are they uncomfortable or would they be comfortable being on the show or do you think there's a chance we can get them to join us on the show.

Dena Jalbert:
Well it's worth asking I would say in this decade both my conversations with them. I think we should ask you know something that I talk about with them often and always send them links to each week as we release it so that they can get a feel for how the momentum and the fact that you know this is also an opportunity to educate the greater ease through which a lot of them especially the smaller media outlets find a true value. They think it's very cool that we didn't have to. Hopefully we can but whenever their attorneys start to get involved gives us that right now so grass we can convince them that they will. Okay.

Dan Humiston:
Well I understand we were a little bit surprised some of you know I'm just not comfortable. It's kind of the same thing it's when somebody is kicking the tires. They don't want the world to know that they're kicking the tires. It's Indiana. Get in as they get a little bit further down they take it for a test drive. They're doing a few now they really don't let anybody know because they don't want one of their competitors jumping in and creating a bidding war. So it's I get it I get it they don't want to make this public but it would be nice if we had a few of them. Well we're going to be recaps. We're going to give updates.

Dena Jalbert:
But thinking you know I'm glad that you said that because that's something that we see often and all the deals that we can cannabis there is because it's an emerging industry and the strategy is that investors are invoking truly our proprietary and they are trying to Dena. starts to do something or be the first to grab a certain share. Be the first to do something on a certain vertical. They'd like to keep their little cash. And so you know in our experiments oftentimes we clients and will ask us to record charge and and depending on what vertical and then we may or may not be able to provide that and because we you know we hold confidentiality very near and dear when when the parties want to have it there. And so it can get stumbling blocks sometimes but because folks are trying to be so strategic that they don't want others to know what they're up to here. But I think that in the subsequent shows this week over the next few weeks we can give our high level recap of folks joining us our efforts can still see what the next steps are like and reheating recap some of the high level topics of conversation what concerns and feedback are and still get folks that feel that they're there even if some of the parties don't want to come.

Dan Humiston:
Like you mentioned there are other verticals that are saying you know what a trade show is a great way for me to promote my brand in a great way for me to touch a lot of different companies maybe owning or having an ownership in a trade show. It's traditionally it wouldn't be something that you would think of but again and cannabis We're rewriting the rules so we now with the technology and everything it fits really nicely within their structure of their company and it really is a great way for them to market their product or their brand or their messaging. So that's why like you said and they don't want their competitor to say oh yeah that is a good idea maybe I should do it too. And so that's why you're right I get it I completely get I wish they would because it'd be really good right good information for our listeners. But you guys can read between the lines so yeah. So we can wrap it up today but next week I do have a couple interviews lined up. So with a couple more investors like always if anybody has any questions or thoughts or ideas or comments or people that you think we should send us an email send us an email at. Connected MJBulls.com and wanted to give one one shout out to Jamie Humiston who's produces the music for us for the show. So thanks Jamie. We will circle back next week next Sunday and keep keep this thing going.

Dan Humiston:
Keep it going. Yeah. All right. Thanks again Dena.. Thanks Dan. as always. Take care. Have a good week.

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