Multi-state operators (MSOs) are becoming more prevalent in the domestic and global cannabis trade. As industry consolidates, state and local governments have rolled out competitive licensing systems that demand large amounts of capital, general business acumen and specific experience in regulated industries. The cannabis MSO game is not for the faint of heart, but the upside is tremendous.
MSOs face a unique host of issues in the state-to-state cannabis market that can only be navigated by an intimate and comprehensive knowledge of local regulations, regulators, cultures and markets. Oftentimes, MSOs are also large organizations with numerous principals, management staff and executives, and hundreds of employees. Additionally, MSOs may tend to have complicated corporate structures to ensure the separation and preservation of various assets, including real estate, intellectual property, and equipment. And each state (and even city or county) will treat cannabis MSOs differently. All in all, regulatory oversight will change drastically from state to state– especially in the areas of disclosure and changes of ownership.
To gain market share, MSOs often will look to the secondary cannabis market to buy up existing operators in various jurisdictions. Depending on the structure of the MSO, disclosure requirements for owners, financially interested parties,