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Exit Strategy
Exit Strategy
Exit Strategy
Exit Strategy
A business exit strategy is critical in creating a plan on how the business can attain its long-term
goals as well as allow the business to smoothly transition to a new phase. As founders of the
business, our core goal is to grow the business to reach a wider market in the United States and
beyond. As earlier enumerated, the medical marijuana industry is projected to record significant
growth in the coming years, reflecting a huge market potential. Sky High Medicinals intends to
align itself with the needs of its target customers by not only supplying quality products but also
In ten years, Sky High Medicinals expects to have established its brand name as a reliable and
the most preferred seller of medical marijuana products. It is envisaged that the business shall
have extended its market presence beyond South Carolina to other states that have legalized the
sale and use of medical marijuana. By recording tremendous growth, the partners intend to exit
The decision to pursue an acquisition is informed by several factors. One, this exit strategy
would be to ensure that the partners have a clean break from the daily operations of the business
without necessarily closing down the business. Another factor that supports this business exit
strategy is that this option would provide an opportunity for the business to further achieve
greater growth milestones. In particular, the partners are looking to hand over the business to an
organization with greater resource capabilities that could further drive the expansion of the
business to national and international heights. Besides, the selected business exist strategy is also
preferred by the partners as this would provide them with an opportunity to negotiate the price
and the other terms of the acquisition or merger. For instance, merging with a larger company
would enable the partners to acquire a substantial payment based on the estimated value of the
business by the time of the merger. The partners may also negotiate other favorable terms such
While this strategy would be beneficial to the partners in terms of realizing value from the business, a
business merger or acquisition is expected to be costly, time-consuming, or even unsuccessful. While this
is the case, the partners seek to strike merger or acquisition deals with companies with similar or aligning
interests as those of Sky High Medicinals. Another shortcoming with this exit strategy is that Sky High
Medicinals may cease to exist, especially when the acquiring company opts to rebrand or integrate the
When a merger or acquisition of Sky High Medicinals is not possible, the partners would also explore the
option of an employee buyout. In this option, the partners would sell the business to members of the
management team or to its employees who might be interested in running the business. One advantage
with this option is that people already working with the business have a solid understanding of the goals,
operations as well as values of the business. As such, handing over the business to its current employees
would mean that Sky High Medicinals would continue its operations and hopefully, attain the initial goals
set out by the partners. In addition, this exit strategy would still provide the partners with an option of
remaining involved in the business in some capacity such as advisors or mentors. Besides, this exit
Carolina and beyond. As such, Sky High Medicinals might have to contend with the challenge of
a rapidly expanding market than anticipated. In the event of such a scenario, Sky High
Medicinals expects that the demand for medical marijuana products might exceed the existing
production capacity of the business. To overcome this challenge, the partners plan on seeking
additional capital would be critical in terms of expanding production facilities as well as the
Competition in every industry is expected. While venturing into the medical marijuana
industry, huge competitors such as MedMen, Cannabis Culture, Aurora Cannabis, Trulieve, and
Canopy Growth Corporation have been identified. One competitive move that these competitors
might consider is based on the pricing of the products. Underpricing of their products would
likely attract more customers, especially individuals who are price sensitive. Nonetheless, Sky
High Medicinals remains committed to competing based on convenience rather than price. While
Sky High Medicinals would be compelled to also lower its prices not to lose customers, the
business would still compete by providing additional value to its customers in terms of
convenience.
It is expected that the industry may experience both favorable and unfavorable changes
mainly driven by economic, legal, and political factors. By recognizing the possible effects the
external environment poses on the business, Sky High Medicinals intends of maintaining the
highest level of business flexibility. Remaining high flexible, especially in terms of production
would help the business to adapt to both favorable and unfavorable conditions. For instance, it is
paramount for Sky High Medicinals to vary its production based on the prevailing market
conditions.
Labor is key to the overall success of Sky High Medicinals ranging from production to
marketing. If there is a labor shortage within the region, Sky High Medicinals would react by
way of sourcing for both skilled and unskilled labor from other regions. While outsourcing some
of Sky High Medicinals’ functions is also an option, the partners are committed to having control
over key business functions as a way of closely monitoring the quality of products and services
offered to customers. Any labor-related issues such as potential legal suits from the employees
Sky High Medicinals shall remain committed to closely monitoring both its production
and supply chain. However, in the event of an erratic supply of products, the business shall act
swiftly to address and recall back its erroneous supply of defective products. Besides, Sky High
Medicinals seeks to avoid an erratic supply of raw materials by way of retaining contracts with a
few selected suppliers. Any problems with the supply of raw materials would promptly be traced