Tobacco multiples

May 23, 2022

by a searcher from Harvard University - Harvard Business School in New York, NY, USA

Alcohol stores and products are around the "normal" ranges. Generally this is a growth market in the US

Marijuana is often above the "normal" multiples because it is seen as high growth, but obviously high risk. Very low risk of rollback now

Tobacco use is a declining category in the US. Regulatory-wise it is stable

If you were comparing a nice liquor store (lets say 4x SDE with all the caveats), a nice MJ dispensary (>4x), what would a nice tobacco shop be?

Obviously there are tons of caveats and sub-segments exposures, but assuming the financials for each looked similar, would the tobacco shop be acquired at a similar valuation to the alcohol store?

Reply by a searcher
from Embry in Spokane, WA, USA

I’m looking at a long time tobacco shop in my area. All I know is the one owner says business is great. Looking at an SBA loan. It is in a great location, loyal customers, etc. I’m new at business and willing to risk, but I’m not wanting a full time retail job. It has one excellent employee I would keep and perhaps pay more. I also don’t want to lose my home if this fails! Comments? Idea? Experience?

Reply by a searcher
from Bowling Green State University in San Diego, CA, USA

Seems like many tobacco, vape, and liquor stores in my area list for way lower multiples. Almost like its a real estate or inventory sale. Either they aren't making a profit or there's some other factor(s) at play. Following to see if anyone who has experience in this space has any comments on your post.

+2 more replies.

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