At the end of November 2011, I learned that Marijuana.com had been purchased by WeedMaps Media, Inc., an entity of the publicly traded General Cannabis, Inc. The reported acquisition price was $4.20 million.
At the beginning of the year, additional details emerged about the transaction, and Mike Berkens reported (via George Kirikos) that there was more to the transaction. According to Berkens, “the down payment was only $125,000. The balance is payable under a promissory note for $4,125,000. The promissory note calls for 69 payments of 60,658.55 each starting on January 18, 2012.”
This morning, I learned a bit more about the transaction, and the news will benefit other domain owners who wish to purchase a domain name and pay over an extended period of time.
The Marijuana.com deal was consummated using the Domain Name Holding transaction at Escrow.com. This escrow service is designed for high dollar transactions (generally $75,000 and higher), where the buyer and seller agree to hold the domain name or names in escrow while the buyer makes scheduled payments. This type of transaction had been available before in private, but now it is publicly available.
The minimum term to do a deal like this is three months, and payments can be made for up to 5 years, although it could possibly be lengthened by speaking directly with Escrow.com.
I asked Justin Hartfield, co-founder of WeedMaps, why his company chose to use Escrow.com for the deal, and he said, “they were one of the few escrow companies that offered domain holding at a reasonable price. They are also one of the largest and local to our company — just down the street.” Escrow.com is the recommended escrow service for large Ebay transactions and Cars.com purchases.
To set up a sale or acquisition with Escrow.com using a Domain Name Holding transaction, you can select Domain Name Holding as they type of transaction and then select the holding period. After Escrow.com has signed contracts and secured the first payment with the escrow fee, they request control of the domain. All domain names are held in the company’s secure account at Go Daddy with privacy for the entire term.
In my business, there have been many times where a domain name is priced beyond the means of a buyer. Offering payment terms is a tool for domain owners to help close a deal, and with a respected company like Escrow.com offering the service, it might help you close a deal.