Emerald X, a wholly-owned subsidiary of the New York-based business-to-business event and media company Emerald Holding, acquired MJBiz for $120 million in cash plus potential earnouts, according to a report by MJBiz.
In 2021, MJBiz’s revenues were approximately $27 million – nearly what they were pre-pandemic. This past October, MJBiz Con, the oldest and largest trade show of its kind in the cannabis industry, drew 1,200 exhibitors and 27,000 attendees to the Las Vegas Convention Center. This level of success did not go unnoticed.
The earnouts will be based on financial growth and could pay between $30 million to $50 million in added cash for MJBiz in 2024.
The earnout will be equal to the earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of MJBiz. The amount is calculated as an amount equal to the average MJBiz EBITDA over the previous two years minus $13 million and multiplied by 9.3.
Emerald’s largest shareholder is institutional investor Onex Corp. which produces more than 140 annual events, matchmaking, and lead-gen services.
For that $120+ million, Emerald gets MJBiz Con, award-winning publications MJBizDaily, Hemp Industry Daily, MJBizMagazine, and other related media and event brands.
MJBiz Con is the crown jewel that gives Emerald a strong foothold in the booming cannabis trade show industry. Some of Emerald’s existing events feature exhibitors in the CBD industry, but this is their first move into a dedicated trade show serving the sector in cannabis containing THC and other products.
After the pandemic forced the cancellation of conferences and trade shows around the globe, the acquisition is a sign that the industry is rebounding.
“This really highlights the rapidly growing interest in cannabis from all corners of the business world, the market’s vast potential, and the success of not only MJBiz but also of the entire industry,” MJBiz CEO Chris Walsh said.
With MJBiz’s industry-leading event and content portfolio, coupled with its 365-day engagement platform connecting the entire cannabis supply chain, Emerald will diversify its product offerings and enhance its growth profile.
MJBiz currently has approximately 40 employees, and Emerald has roughly 600. According to the terms of the deal, the MJBiz leadership team and staff will continue under the new ownership.
Walsh sees the acquisition as an opportunity to continue serving the cannabis business but now with “a deeper bench.”
It is unclear if there is a timeline or expected procedure for employee redundancies. MJBiz co-founders Cassandra Farrington and Anne Holland will act as consultants for an undisclosed time.
“Integrating with a larger organization provides the additional resources and channels to unlock the next phase of MJBiz’s growth and is the right next step in our evolution as a business,” said Farrington.
Hervé Sedky, Emerald’s president and CEO, has long admired “MJBiz’s sterling reputation for being the most trusted event and content producer serving the business side of the cannabis and hemp industries and their respective participants.” Sedky believes deals such as this allow Emerald to “level up” and are fostering the next wave of growth.