As the cannabis and hemp marketplace continues to mature, more investors have begun to enter the playing field. These groups look at the cannabis space as an opportunity to acquire or merge with businesses that can offer potentially high returns.
But this process is not as simple as it seems.
Sometimes, the true financial picture of a company is not what it is portrayed to be. Companies could report a massive net income, but their operating cash flows may be negative. An extensive process of verification, investigation or audit of a potential deal or investment opportunity is required to confirm all relevant facts and financial information. This is known as financial due diligence.