Cannabis Multi-State Operators: Top 5 Mistakes

We work with a good number of multi-state operator (MSO) cannabis companies. Always have. Most of these companies are publicly traded, although others remain closely held. With more MSOs on the scene than ever before, it seems like a good time to list out some pitfalls for MSOs, their decisionmakers, lenders, etc., as these companies stretch across state lines and even internationally.

Hiring the Wrong People

Many cliches exist along the lines of “a company is only as strong as its people.” These cliches may feel insipid, but they also tend to be true. Many cannabis MSOs suffer from poor leadership which may be exacerbated by inappropriate compensation structures. Here’s a piece from last fall, for example, on Aurora paying out millions in executive bonuses, immediately following mass layoffs and a reported loss of US $2.3 billion. Those are outsized numbers, but this kind of thing is common in cannabis public companies at various scale.

That said, it’s not all about the c-level. For newer and smaller MSOs in particular, it is vital to have strong personnel on the ground. Some of our MSO clients have excellent “grinders” who network fluidly, cut through nonsense quickly, make the right local connections,

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