Glossary of Terms | 420 Property

1031 Exchange 1031 A U.S. tax provision that may allow deferral of certain capital gains by exchanging business/investment real property for other qualifying real property through strict timing rules and a qualified intermediary (personal property no longer qualifies). 280E (Cannabis Tax) 280E Federal rule that generally disallows deductions/credits for a business trafficking in Schedule I/II controlled substances where prohibited by federal or state law (COGS treatment is separate and fact-specific). Acceptable Hemp THC Level Under USDA hemp rules, hemp is “acceptable” for compliance when the lab’s reported total THC, after applying the lab’s measurement of uncertainty, includes 0.3% or less (dry weight). Accrual Basis Accounting Accounting method recognizing revenue when earned and expenses when incurred, regardless of cash timing; often preferred for inventory-based businesses. Acquisition A buyer obtaining control of a business (or its assets), typically via an asset purchase or an equity purchase. Add-backs Adjustments adding back certain expenses to reflect normalized earning power (owner-specific, discretionary, or non-recurring items), subject to verification. Add-On Acquisition A bolt-on purchase added to an existing platform company to gain scale, capabilities, or geographic reach. Adjusted EBITDA EBITDA normalized to remove one-time, non-operating, or unusual items; in owner-operated deals it may also normalize owner/manager compensation to market replacement levels. Adjusted Book Value Net asset value where balance-sheet assets and liabilities are adjusted toward economic/market reality (including relevant contingencies) to estimate equity value. Adjusted Book Value Method Asset-based valuation method that restates assets/liabilities to estimated fair values to derive an indicated equity value. Adult-Use Cannabis AU State-regulated non-medical cannabis sold to adults (typically 21+), with licensing/taxes/rules distinct from medical programs. Advertising Restrictions Regulatory limits on marketing (audience age thresholds, placement, claims, packaging imagery) that can materially affect customer acquisition. Agent / Badge Holder A person authorized to work on behalf of a licensee (employee/contractor/transport), often requiring registration/badging and background clearance. Alarm System Intrusion detection (often monitored) required by many cannabis rules and commonly reviewed during licensing inspections. Anti-Dilution Provision Preferred-equity term adjusting conversion economics if a later round is priced lower, mitigating dilution for protected investors (mechanics vary). Appraisal A professional opinion of value prepared for a stated purpose using recognized methods and assumptions (often lender-required for CRE). Asset Deal Transaction where the buyer purchases selected assets (and may assume selected liabilities) without buying the seller’s ownership entity. Assignment (Lease) Transfer of a tenant’s lease rights/obligations to a new tenant (often requiring landlord consent); common in cannabis business sales tied to premises. Average Unit Volume AUV Franchise metric describing average sales per unit/store over a defined set of locations/time. Background Check Regulator-required screening for owners, control persons, and sometimes key employees; failures can block licensing or trigger enforcement. Badging Issuance and management of required facility worker IDs, often tied to access control, visitor logs, and audit trails. Balloon Payment A large final loan payment due at maturity because scheduled payments did not fully amortize principal. Batch A defined quantity produced under uniform conditions for tracking/testing; “batch” definitions vary by state—align COAs and inventory to the state definition. Basis Points bps Interest-rate unit where 100 bps = 1.00% and 1 bp = 0.01%. Biomass Bulk plant material (often trim and/or flower) intended for extraction; value depends on potency, moisture, contaminants, and provenance. Book Value Accounting carrying value: for a company, assets minus liabilities; for an asset, cost minus accumulated depreciation/amortization (often differs from market value). Broker’s Opinion of Value BOV A broker-prepared value estimate based on market knowledge and comps; not a formal appraisal. Buffer Zone Required distance between cannabis premises and sensitive uses (schools/parks, etc.); measurement rules differ by jurisdiction. Buildout Construction/renovation scope required to make a site code-compliant and license-ready (power, HVACD, security, plumbing, fire). Build-to-Suit BTS Development built to a tenant’s requirements (often power, HVACD, security, hazardous rooms); frequently conditioned on zoning/local approvals. Burn Rate Net cash spend rate (often monthly) used to estimate runway—especially relevant for vertically integrated or growth-stage operators. Business Broker Intermediary who markets privately held businesses for sale and guides parties through pricing, negotiation, diligence coordination, and closing. Buyer Representation Agreement Contract hiring a broker/agent to represent a buyer; defines duties, term, and compensation handling. CAM (Common Area Maintenance) CAM Shared-area operating costs allocated to tenants under lease terms; cannabis retail/industrial sites often have high CAM variability. Cannabinoid Compounds produced by Cannabis plants (e.g., THC, CBD); legality often depends on source (hemp vs marijuana), concentration, and product type. Cannabis (Federal Scheduling Status) A DOJ/DEA proposed rule to move marijuana to Schedule III has been issued; until a final rule becomes effective, marijuana remains Schedule I under federal law. Cannabis Business License State/local authorization to conduct defined cannabis activities (cultivation, manufacturing, retail, distribution, etc.); many states require local approval first. Cannabis Lease Rider Lease addendum addressing cannabis-specific issues (license contingency, compliance duties, inspections, odor, hazardous materials, indemnities). Cannabis-Related Banking Compliance BSA/AML Bank Secrecy Act / Anti–Money Laundering frameworks driving enhanced diligence and monitoring for cannabis-related accounts. Cap Rate (Capitalization Rate) NOI ÷ value (or NOI ÷ price), used to compare income properties; ensure NOI is stabilized and expenses are correctly classified. Cap Table Ownership record of equity, options, warrants, and convertibles—important for “change of control” thresholds and license disclosure obligations. Capital Stack Financing layers in priority order (senior debt, mezzanine, preferred equity, common equity) with different risk/return profiles. Capitalization (Accounting) Recording a cost as a long-term asset rather than expensing it immediately (relevant to buildouts/equipment). Capital Expenditures CapEx Major spending for long-lived assets (HVACD, electrical upgrades, extraction equipment) that may not be captured in NOI/EBITDA unless specified. Cash Basis Accounting Accounting method recording income when cash is received and expenses when cash is paid; often used by small operators but may obscure true performance. Cash Flow Generic term that can mean operating cash flow, free cash flow, or proxy metrics (SDE/EBITDA/NOI). Always specify the definition being used. Cash Management Plan Policies/vendors for handling cash (vaulting, transport, counting, deposits), critical for cash-heavy cannabis operators. Certificate of Analysis COA Lab report documenting required test results (potency and contaminants); COA must match the correct batch/lot identifiers. Chain of Custody Documentation of who controlled samples/inventory from collection through testing and release; important for defensible compliance. Change of Control Ownership/control change beyond legal/contract thresholds, often requiring regulator notice/approval and landlord/lender consent. Child-Resistant Packaging CRP Packaging designed to be difficult for children to open; often required for cannabis and many hemp-derived ingestibles. Churn Customer loss rate over a defined period; material for subscription/consumer brands and for projecting retention-based revenue. C1D1 (Hazardous Location) C1D1 Electrical/fire classification for areas where flammable gases/vapors may be present under normal operations—often relevant to hydrocarbon extraction rooms. C1D2 (Hazardous Location) C1D2 Hazard classification where flammable gases/vapors are not normally present but may occur under abnormal conditions; still drives special electrical/ventilation design. Closing Final transaction step where documents are executed, funds transfer, and ownership/lease rights are conveyed. Closing Costs Fees/expenses to complete a deal (legal, title, escrow, lender fees, recordings), varying by deal type. Co-tenancy Retail lease term where obligations/remedies can change if key tenants leave or occupancy drops, as defined in the lease. Collateral Assets pledged to secure a loan (real estate, equipment, receivables). Cannabis lenders may apply higher haircuts due to regulatory/transfer constraints. Common Size Statements Financial statements expressed as percentages (P&L lines as % of revenue) for comparability across time and peers. Common Use Permit CUP See Conditional Use Permit (CUP). Compliance Audit Review of operations/records against regulatory requirements (inventory, surveillance, training, waste, labeling, transport). Concentrate Extracted cannabinoid product (oil/rosin/resin). Compliance hinges on processing method, residual solvent limits (if applicable), and labeling rules. Conditional License Provisional/conditional permission to operate or proceed while completing requirements; scope and duration vary by state. Conditional Use Permit CUP Local land-use permit often required for cannabis uses even when zoning allows them; typically imposes operational conditions (hours, security, odor, signage). Confidential Information Memorandum CIM Buyer package describing a business (often more formal for larger deals); typically shared after NDA. Confidentiality Agreement NDA Contract restricting use/disclosure of sensitive deal information (financials, SOPs, customer lists, location identity). Contingency Deal condition that must be satisfied or waived (licensing approval, landlord consent, financing, inspections). Controlled Substances Act CSA Federal law scheduling controlled substances; marijuana scheduling drives many banking/tax/interstate commerce constraints. Cost of Goods Sold COGS Direct costs attributable to goods sold; in cannabis, COGS matters heavily due to 280E’s limits on other deductions. Cost of Capital Required return demanded by debt/equity providers for risk taken; influences discount rates and valuations. Credit Line Revolving facility allowing draw/repay/redraw up to a limit; often used to manage working-capital swings. Cultivation Growing cannabis/hemp; value depends on canopy entitlement, facility performance (HVACD/power), genetics, yields, and compliance history. Cultivation Canopy Regulated or licensed measurement (often flowering canopy) that limits production; not the same as total building square footage. Cure Room Controlled environment after drying to stabilize moisture and quality and reduce mold risk. Customer Due Diligence CDD Enhanced bank diligence for cannabis/hemp operators (licensing verification, beneficial owners, site visits, monitoring) under BSA expectations. Deal Structure The overall transaction design—what’s bought, payment timing (cash/note/earnout), contingencies, and risk allocation. Debt Service Coverage Ratio DSCR Cash flow (or NOI) divided by total debt service; lender formulas vary—confirm inputs (reserves, management fees, taxes). Debt Yield NOI ÷ loan amount; lender metric showing income support for debt independent of interest rate. Delta-8 THC A cannabinoid often produced via chemical conversion from hemp-derived CBD; legality and permitted product types vary widely by state and are actively evolving. Delta-9 THC Δ9-THC Primary psychoactive cannabinoid referenced in federal hemp definitions and many state potency frameworks. Dehumidification Load Moisture removal capacity needed to maintain grow-room conditions and reduce microbial risk; often a key facility constraint. Depreciation Non-cash accounting expense allocating the cost of tangible assets over useful life; often added back in EBITDA-based valuation. Discounted Cash Flow DCF Valuation method projecting future cash flows and discounting them to present value using a discount rate. Discount for Lack of Marketability DLOM Valuation adjustment reflecting illiquidity and difficulty selling a private interest quickly at a known price. Discount Rate Required return used to discount future cash flows; typically higher for riskier businesses/assets. Distribution (Cannabis) Licensed function that may include warehousing, transport, and product movement controls; scope differs by state (sometimes also handles tax stamping/testing routing). Diversion Product leaving the regulated supply chain or being sold outside permitted channels; a major enforcement and license risk. Distillate Highly refined cannabinoid oil; compliance hinges on source material, testing, and labeling/claims rules. Due Diligence Verification of financials, compliance history, licenses, inventory integrity, contracts, leases, zoning, and SOPs; in cannabis, compliance diligence is often as important as financial diligence. Earn-Out Deferred payment tied to future performance; in regulated industries it requires careful definition and controls to avoid disputes and compliance conflicts. EBITDA EBITDA Earnings before interest, taxes, depreciation, and amortization; common profitability proxy for valuation and lending. Effective Rent Rent economics after concessions (free rent, TI) spread over the lease term; useful for comparing lease offers apples-to-apples. Environmental Site Assessment ESA Environmental diligence (often Phase I) to identify contamination risks and whether further testing is warranted. Equity Ownership claim after liabilities; includes governance rights and economics (distributions, liquidation). Escalation Clause Lease term increasing rent or reimbursable expenses over time (fixed steps, CPI, or other formula). Escrow Neutral third party holds funds/documents until closing conditions are met (e.g., earnest money, holdbacks). Estoppel Certificate Tenant/landlord statement confirming lease facts (rent, term, defaults, options), often required in CRE sale/refinance. Farm Bill Hemp Definition Federal definition of “hemp” as Cannabis sativa L. and derivatives with ≤0.3% delta-9 THC (dry weight), with additional statutory language relevant to total THC. Fair Market Value FMV Value standard describing a hypothetical willing buyer/seller transaction in an open market, neither compelled, both reasonably informed. Fire Marshal Signoff Fire/occupancy approvals (especially critical for extraction, gas storage, and hazardous rooms) that can gate licensing. Free Rent Lease concession reducing or waiving rent for a period; commonly used to offset long permitting/buildout timelines for cannabis tenants. Generally Accepted Accounting Principles GAAP Financial reporting standards; GAAP results can differ from tax-basis statements and management-recast statements. Good Manufacturing Practices GMP / cGMP Documented manufacturing and quality systems (SOPs, batch records, deviations, recalls) increasingly expected for cannabis/hemp manufacturing scale. Goodwill Intangible value tied to brand, customer relationships, and reputation that may justify value beyond tangible assets. Green Zone A locally designated area where cannabis uses are permitted or prioritized (often via zoning overlays, maps, or specific plan areas). Definitions and boundaries are city/county-specific. Gross Lease Lease where rent includes some or most operating expenses, depending on what the lease defines as included vs passed through. Hard Costs Direct physical construction costs (labor/materials/equipment). Cannabis hard costs can be unusually high due to power, HVACD, security, and code demands. Hazardous Materials Storage Storage/permitting for solvents/gases (butane/propane/ethanol/CO₂) requiring compliance with fire code, ventilation, and detection systems. Hemp Plan USDA-approved State/Tribal plan (or USDA plan) governing hemp production, including sampling/testing, reporting, and disposal rules. Hemp Processor Registration State-level registration/license to process hemp into extracts/products; requirements vary widely and may intersect with food/drug/cosmetic rules. Hemp Producer License State/Tribal/USDA authorization to grow hemp with land reporting and compliance sampling/testing requirements. Holdback Portion of price withheld (often in escrow) to cover post-close adjustments or defined risks (inventory, taxes, compliance liabilities). HVACD HVACD Heating/ventilation/air conditioning plus dehumidification and filtration—critical for cultivation performance and contamination prevention. Hydrocarbon Extraction Extraction using butane/propane blends; often triggers C1D1/C1D2 design, ventilation, gas detection, and fire code approvals. Indemnification Contract obligation to reimburse defined losses (e.g., undisclosed compliance violations, tax exposures, liens). In-Place Rent Rent currently paid under existing leases; may be above or below market rent. Intangible Assets Non-physical assets such as IP, contracts, customer relationships, and brand value; transferability can be limited by law or contract. Intellectual Property IP Legally protectable rights (trademarks, copyrights, patents, trade secrets) plus supporting documentation and assignments. Inventory Reconciliation Matching physical inventory to track-and-trace and accounting records; discrepancies can trigger audits and diversion suspicion. Lab Testing (Cannabis/Hemp) Required testing for potency and contaminants; scope varies by jurisdiction and product type; COA alignment to lot/batch is critical. Land Use Approval Local approvals (zoning clearance, CUP, permits) needed before/alongside state licensing—often the longest timeline risk. Lease Term Length of lease from commencement to expiration (excluding unexercised options). Letter of Intent LOI Mostly nonbinding term summary before definitive agreements; cannabis LOIs often include licensing/local approval/lease assignment contingencies. Lien Legal claim securing a debt against assets or real property; unresolved liens can block closing. Loan-to-Cost LTC Loan amount ÷ total project cost (purchase + improvements); common for construction/value-add. Loan-to-Value LTV Loan amount ÷ collateral value (or purchase price), used by lenders to size loans and manage risk. Local Authorization Letter City/county document confirming local compliance for cannabis activity; required in many states to obtain/renew state licenses. Lot Defined quantity grouped for testing/labeling; “lot” definitions vary by state—misalignment can create compliance issues. Marijuana-Related Business SAR Categories MRB SAR FinCEN guidance describes SAR categories (e.g., “Marijuana Limited,” “Marijuana Priority,” “Marijuana Termination”) used by banks serving marijuana-related businesses. Manifest (Transport) Required shipping/transport document detailing products, quantities, route, and parties; errors can trigger enforcement actions. Manufacturing License (Cannabis) License covering extraction, infusion, and product manufacturing; typically requires QA/QC, sanitation SOPs, and facility safety compliance. Market Approach (Valuation) Valuation approach using observable pricing from comparable transactions or market multiples (SDE/EBITDA multiples; cap rates; rent comps). Market Rent The rent a typical tenant would pay for comparable space under current market conditions and standard terms. Measurement of Uncertainty MU Lab-reported uncertainty range used in hemp compliance determinations and sometimes referenced in testing rules; essential to interpreting “0.3%” thresholds. Microbusiness Small-scale license category combining limited activities (e.g., small cultivation + manufacturing + retail), where authorized. Mixed-Light Cultivation Greenhouse cultivation with supplemental lighting; performance depends on climate, blackout capability, and HVACD design. Mold / Microbial Risk Contamination risk that can trigger holds, recalls, or product destruction; strongly tied to HVACD design and sanitation SOPs. Mother Room Area maintaining mother plants for cloning; genetics and mother health can be a key value driver. Monthly Recurring Revenue MRR Monthly subscription revenue expected from active contracts; commonly used for SaaS/recurring-service valuation. Net Operating Income NOI Property income minus operating expenses (before debt service and income taxes). For cannabis facilities, confirm whether power/HVACD/security are included correctly. Non-Compete Agreement Contract restricting seller competition; enforceability varies by state and may interact with regulated ownership rules. Non-Recourse Loan Loan where lender’s primary remedy is against collateral rather than borrower personally, subject to carve-outs. Normalized Earnings Earnings adjusted to reflect typical ongoing performance by removing nonrecurring, non-operating, or owner-specific anomalies (subject to diligence). NNN (Triple Net) NNN Lease structure where tenant typically pays taxes, insurance, and maintenance/CAM (exact scope defined in lease). Odor Mitigation Systems/SOPs controlling odor (carbon filtration, negative pressure, scrubbers); often required by local permits and critical for neighbor relations. Operating Agreement Entity governance document (LLC/partnership) defining control, transfers, and economics; must align with disclosed owners/control persons for licensing. Operating Expenses OpEx Recurring costs to operate a property/business (excluding financing and typically excluding major CapEx). Option Pool Shares reserved for future employee/advisor equity grants; affects dilution and is commonly negotiated in VC-backed companies. Packaging & Labeling Compliance Rules governing warnings, potency, ingredients, batch IDs, symbols, claims, and child resistance; violations can trigger holds/recalls. Pass-Throughs Lease-required tenant reimbursements (CAM, taxes, insurance, certain operating items), defined by the lease. Percentage Rent Retail lease term where tenant pays base rent plus a percentage of sales above a defined breakpoint. Phase I Environmental Site Assessment Phase I ESA Baseline environmental diligence (records + site visit) to identify potential contamination risks and need for Phase II testing. Post-Money Valuation Company value immediately after new investment money is added in a financing round. Pre-Money Valuation Company value immediately before new investment money is added in a financing round. Preferred Stock Equity class with negotiated rights (preferences, protections, governance), common in VC financings and relevant to payout waterfalls in exits. Premises The licensed location boundary; cannabis licenses are typically premises-specific—moving often requires new approvals. Premises Diagram Required site map showing rooms, access points, cameras, storage, and workflow; mismatches can delay approvals and trigger findings. Pro Forma Forward-looking projection of income/expenses/returns based on assumptions (lease-up, yield, pricing, margins, compliance costs). Pro-Rata Rights Investor rights to participate in future rounds to maintain ownership percentage, subject to terms and availability. Purchase Price Allocation PPA Allocation of purchase price across asset categories for tax/accounting; affects depreciation/amortization and tax outcomes. Quality of Earnings QoE Analysis of how sustainable reported earnings are and what adjustments are needed to reflect ongoing economics; common in larger deals. Quarantine Status/area preventing use/sale until release criteria are met (testing results, investigation closure, corrective actions). Recall Removal of product from the market due to contamination, labeling, or safety issues; can be voluntary or regulator-mandated. Recapitalization Financing restructuring (debt/equity mix) allowing partial liquidity while retaining ownership; common PE strategy in growth. Reps & Warranties Contract statements of fact (often by seller) that, if breached, can trigger indemnification or other remedies. Residual Solvents Trace solvents remaining after extraction; regulated limits require testing (especially hydrocarbon/ethanol processes). Retail Dispensary Licensed retail storefront selling cannabis to consumers/patients; location, local caps, and zoning usually dominate value. Rent Roll Tenant schedule showing rents, SF, dates, options, deposits; critical for underwriting NOI and lease risk. SAFE (Future Equity Instrument) SAFE Investment instrument converting to equity later (often with valuation cap/discount), typically at a priced round; common in startup financings. SBA 7(a) Loan 7(a) SBA-guaranteed loan program commonly used for business acquisitions (and sometimes real estate), subject to eligibility and underwriting rules. SBA 504 Loan 504 SBA-backed financing commonly used for owner-occupied commercial real estate and long-lived equipment, typically with bank + CDC structure. Seed-to-Sale End-to-end tracking from cultivation through sale, typically implemented via state track-and-trace plus internal POS/ERP controls. Security Camera System CCTV Video surveillance coverage and retention requirements; failures or blind spots are common audit findings. Security Plan Written plan covering access control, cameras, alarms, visitor procedures, incident response, and record retention, often required for licensing. Secured Loan Loan backed by collateral (real estate, equipment, receivables) that lender can claim under agreed remedies if default occurs. Seller Financing Seller lends part of purchase price to buyer; documented with a promissory note, collateral, and often subordination terms. Seller Note Promissory note documenting seller financing (rate, term, collateral, default, subordination). Seller’s Discretionary Earnings SDE Small-business cash-flow proxy typically adding back one owner’s compensation plus discretionary/nonrecurring items; definitions must be reconciled to source records. Social Equity Program Licensing preference/support framework for impacted communities; eligibility and benefits vary widely by jurisdiction. Solventless Extraction Extraction without volatile solvents (e.g., rosin); still requires sanitation, process control, and testing compliance. Standard of Value The defined type of value used (FMV, investment value, fair value), affecting methods, assumptions, and conclusions. State Cannabis Regulatory Authority The state/territorial agency regulating cannabis licensing, compliance, and enforcement; authority scope varies and often depends on local approvals. State Track-and-Trace Platform State-mandated inventory reporting system used for compliance; states use different vendors/platforms (e.g., Metrc in California). Sublease Tenant rents space to another party under the master lease; typically requires consent and does not fully transfer obligations. Subordination, Non-Disturbance, Attornment SNDA Agreement aligning tenant rights with lender priority so lease can survive foreclosure under defined conditions. Suspicious Activity Report SAR Bank report required under BSA when transactions appear suspicious; FinCEN provides cannabis-specific SAR expectations and categories. Tax Stamp / Excise Collection State-specific mechanisms for cannabis tax collection and proof of tax payment, often administered at distribution or retail. Tenant Improvements TI Build-out work to customize leased space, funded by tenant, landlord, or both; often a major cannabis lease negotiation point. Tenant Improvement Allowance TIA Landlord-provided funds (often $/SF) toward tenant improvements; affects effective rent and deal economics. Term Sheet Mostly nonbinding document summarizing proposed investment terms before definitive legal agreements. Total THC THC expression that accounts for delta-9 THC plus potential delta-9 from THCA conversion; used in hemp compliance and many potency frameworks. Track-and-Trace Required recording of inventory events (plant tags, transfers, sales); errors can appear as diversion—controls and reconciliation matter. Triple Net NNN See NNN (Triple Net). True Party of Interest TPI Person/entity with defined financial interest or control requiring disclosure; undisclosed TPIs can cause denials, discipline, or license revocation. Trust Account Segregated account used to hold client funds (earnest money/deposits) separate from operating funds; rules vary by state—verify who may hold funds and required disclosures. Underwriting Evaluating risk and return using cash flow, collateral value, and assumptions to set price/terms (lender and buyer underwriting can differ). Unsecured Loan Loan not backed by specific collateral; relies on creditworthiness and cash flow and often carries higher pricing. Usable Square Feet USF Tenant-occupied area excluding common-area “load factor”; often paired with RSF (rentable square feet) in office leasing. Vacancy Rate Percent of space unoccupied; used alongside absorption and rent trends to assess market tightness and leasing risk. Vertical Integration Ownership/operation across multiple supply chain stages (cultivation, manufacturing, distribution, retail); allowed/required/restricted depending on state. Vesting Equity earned over time or milestones; common for founders/employees and relevant in acquisitions involving retention. Waste Rendering Procedures making cannabis waste unusable/unrecoverable before disposal, often logged and audited. Waterfall (Payout) Rules describing distribution of proceeds among stakeholders (debt, preferred, common), defined by contracts and cap table. Working Capital Current assets minus current liabilities (often adjusted in deals); in cannabis, define treatment of cash, taxes payable, and inventory due to compliance and cash cycles. Working Capital Peg Target working-capital level delivered at closing with post-closing true-up if actual differs. Zoning (Cannabis) Local land-use rules controlling where cannabis uses are allowed, often via overlays/green zones, buffers, and CUPs; a primary gating factor for deal feasibility.