Independent Cannabis Operators Don’t Have to Fear MSOs – Here’s Why

Multi-state operators, or MSOs as they’re called in the industry, are the big fish of the cannabis pond. They operate large-scale, fully integrated businesses in multiple states with a potential market size of tens of thousands of people. For a small business that operates in one town in one state, it’s easy to see how they can feel edged out by larger businesses.

But MSOs play an important role in the cannabis industry, normalizing cannabis consumption, increasing awareness of plant medicine, and spending more money on product research and development than most small businesses are able to.

MSOs often lead the way in new markets. These businesses can be found at the forefront of the push for legalization in new states, using their large budget and even larger influence to sway public opinion on the cannabis plant. The size of MSO budgets and teams means they have time to spend one-on-one with legislatures and policymakers, to help them understand why legal cannabis makes moral and financial sense. MSOs are able to spend more money on educating consumers, public awareness campaigns, and establishing industry standards for customer safety.

This large budget also comes into play with research and development. MSOs understand that audiences want new products: faster, stronger, and more diverse chemical compounds. And as any researcher knows, a breakthrough makes it easier for other people to advance their understanding as well. By leading the way in improving products like vapes or creating new formulations for softgels and topicals, MSOs make it easier for small businesses to do the same with less resources.

Often, independent cannabis operators feel like MSOs are stepping on their toes and disrespecting the legacy of cannabis culture. This stems from a scarcity mindset that’s left over from prohibition times when one person getting a larger slice of the market meant someone else got less.

But today, collaboration, not competition, is what moves the cannabis industry forward. By approaching large cannabis businesses with the goal of working together (or at least not at odds with one another) smaller businesses can benefit from MSOs.

MSOs have access to large-scale infrastructure in multiple states. Tapping into the distribution networks or financial resources of these companies can relieve some of the financial burden small businesses face. Collaborating on product development or marketing can increase the reach of small businesses, getting in front of new audiences. This is especially impactful for justice-impacted brands that may face barriers to financial resources or business acumen.

Operating in multiple states means MSOs must have experience in navigating complex regulations. Being compliant in one state is hard enough — doing it in several states can be a full-time job, which independent operators can benefit from. Working with an expert in regulatory compliance makes navigating complex regulations simpler for an already busy business owner. Working with a larger company can help minimize legal risks and learn from previously established compliance policies.

Ultimately, cannabis businesses are stronger when they work together — not against one another. The cannabis industry still faces strong stigmas in many areas, and presenting a united front against these biases makes it easy to combat. By working together, small and large cannabis businesses can present collective advocacy for industry-friendly policies, instead of each trying to outdo the other in policy sessions.

Working together to overcome a history of mistrust is easier said than done. To do so, both sides need to come to the table with a win/win mindset and a willingness to participate in open dialogue. Collaboration can only exist in environments of trust and shared goals can only be accomplished with shared responsibility.

To start this process, both sides need to find common ground — like a shared love of the cannabis plant and a desire to increase access to cannabis for all Americans. From there, businesses can explore areas of mutual benefit, like co-branding, partnering on limited product releases, or joint ventures in the supply chain.

Working together doesn’t mean each side loses its unique identity — it means that two different businesses come together to create something greater than they could have alone. This can take many forms, like unique branding projects, unusual product offerings, or targeting niche markets with specialized products.

Collaboration requires creativity as well as trust — but doing so means creating together a cannabis industry that is stronger, more unified, and better able to serve the needs of customers across state lines. Ultimately, MSOs and independent cannabis businesses working together help protect the industry.

Protecting your cannabis company can seem confusing; however, we’re a full-service insurance brokerage working with carriers worldwide to offer you the best coverage possible. We’re here to help! Please reach out to us today by email [email protected] or calling 646-854-1093 for a customized letter or learning more about your cannabis insurance options.