This article was originally published on WeedWeek and appears here with permission.
More than ever before, in 2021 a growing number of brands could claim a national presence. But as MSOs expand and make acquisitions they have targeted licenses and operational capabilities far more than the names beloved by consumers.
A long story in MG Retailer explains why:
- “MSOs have been acquiring to either go deeper in states they already operate in, enter new states, or expand their capabilities,” Highly Objective editor Dai Truong said. “They haven’t been eager to acquire brands because they believe that, while they will matter in two to three years, today’s consumer demand comes down to pricing, consistency, and product availability. But they are definitely on the path.”
- “I would never pay a lot for a brand company,” Jim Cacioppo, CEO of MSO Jushi said. “In cannabis the most important thing is the machine you have to deliver it,” he said.
Geography plays a significant role as well:
- Part of it is that California, home to the most developed brands, has been kryptonite to MSOs for being such a capital intensive market.
- Michigan is another brand rich market but many MSOs avoid it for its unlimited license structure.
Meanwhile, some MSOs, such as giants Trulieve and Green Thumb Industries have licensed brands, which is less expensive and less risky than acquiring them.
