When a vertically integrated cannabis company (the Company) decided to divest certain retail locations, Cherry Bekaert played a crucial role by offering financial planning and analysis (FP&A) advisory services and data analytics tools that were essential to the decision-making process.
Assessing the Situation
The Company, a vertically integrated and publicly traded cannabis business with wholesale, white label, and retail sales channels, sought assistance from Cherry Bekaert’s Accounting Advisory practice for its decision-support needs.
With cannabis investments at an all-time low on the West Coast, the Company’s updated strategic plan necessitated divesting from certain retail locations. However, the new CFO and finance team were overwhelmed with the annual budget and monthly reporting processes, requiring additional FP&A support with the design and/or implementation of the following:
- Three-year projections for 15 retail locations
- Consolidation tools for projections for multiple verticals
- Dynamic scenario reporting tools
The Company’s CFO estimated that the automated financial consolidations model built by Cherry Bekaert saved them 75% of time spent on consolidations and allowed them to focus on strategic Support.
Becoming a Trusted Advisor
The CFO shared the strategic plan and existing planning models, proposing meetings with retail business leaders to help Cherry Bekaert’s team better quantify the long-term outlook for each location.
Prior to the meetings, Cherry Bekaert reconciled historical results with operating reports and created preliminary projections based on the strategic plan’s high-level assumptions, guiding an upper and lower bound to guide sales projections. Additionally, Cherry Bekaert designed three-year planning templates to assist with future consolidations and reporting needs.
With clear expectations set and leveraging Cherry Bekaert’s extensive experience in the cannabis industry, the discussions led to more precise and transparent long-term projections for the struggling retail vertical.
Building the Tools Our Clients Need
With the three-year projections finalized for the long-term plan, Cherry Bekaert developed an intuitive, automated financial consolidation model. This model can be used for both historical performance and projections reporting. The CFO estimated that this tool saved them 75% of time spent on consolidations, allowing them to focus more on strategic support to the business teams and less on the minutiae.
Additionally, based on previous strategic planning sessions, the CFO required a tool for on-the-spot scenario analyses during final board presentations. Cherry Bekaert developed a dynamic KPI dashboard that allowed for the omission of selected retail locations and adjustments to high-level assumptions. The dashboard also predefined best- and worst-case scenarios based on insights from planning sessions.
Using the tools and guidance provided by Cherry Bekaert, the CFO successfully led a planning session that resulted in consensus on final divestment decisions, with no additional work for the CFO or his team.
Cherry Bekaert’s tailored solutions demonstrated our commitment to efficiency and adaptability, delivering financial strategies that meet evolving business needs.
Let Us Guide You Forward
Choosing Cherry Bekaert means partnering with an Accounting Advisory team that offers not only deep industry knowledge but a personalized approach to overcoming unique business challenges. Let us help you achieve your financial objectives with clarity and confidence, positioning your company for sustainable success in a competitive market.
