Canna Provisions co-founder and COO, Erik Williams, has served as Founding Executive Director of the Connecticut NORML. There, he led decriminalization efforts and was integral in passing Connecticut’s medical marijuana law through its Legislature, a first for the industry.
Since 2010 Erik and his partner and Canna Provisions CEO Meg Sanders have parlayed their experiences opening dispensaries and expanding operations of brands creating some of the most respected cannabis businesses and leading US cannabis producers and infused product manufacturers, with medial and retail dispensaries in Colorado and Illinois.
Erik and Meg have parlayed their experience in other legal states over the last decade into co-founding consulting firm Will & Way. Together they have advised startups, government agencies, investors, brands, cultivators, and institutions in cannabis.
We responded to a call for answers to the below questions on the rise and future of MSOs (multi-state operators) in cannabis, for a story that never ran, but the information is illuminating in the context of the queries provided. We have reproduced our COO Erik Williams original comments in full here:
1. How are MSOs, cannabis big brands using mergers and licensing deals to create brand market share. Cannabis franchise viability/can a cannabis franchise be set up state-by-state?
Using mergers and licensing deals is a common way MSOs bring smaller brands and products to new markets, because their licenses are the key to those customers, and brands need to understand that. MSOs and big cannabis brands understand it, and that’s how they are creating places across the table from one another in new markets and legal states.
These deals create a symbiotic relationship; proven brands in one place, and brands or business deals providing access to those brands’ markets in the other.
Having one deal where a brand can gain access to multiple states means it can add ease of doing business – having to only do one deal to get a brand or product in multiple states is attractive.
Look at any brand that’s gone to other states. Or take the case of Incredibles, a Colorado brand that did a deal with Green Thumb Industries (GTI), and now Incredibles are carried everywhere GTI products are, including Canna Provisions. It’s now America’s highest-volume and most nationally awarded infused edibles product company.
On a state-by-state basis it’s happening, even if it’s not legally set up as a franchise. In cannabis, there are lots of different meanings when you say “franchise”. It’s a broad word with specific definitions, but brands are operating and have the same quality control, branding, and marketing and sourcing requirements you see in many other franchises.
The other thing in limited licensing scenarios is a lot of MSOs opening right now in different markets means smaller brands must do a deal with that MSO, as it’s their only access to that state.
2. Which brands are doing so if so, leading the way, and how are they doing it?
Ascend Cannabis out of Colorado, on a licensing agreement. Canna Provisions has a licensing agreement with them, and it’s a perfect example of a brand with great production and extraction technology and processes we feel are second to none. The launch of that brand in the Massachusetts market leads to a quality extracted product that will drive other brands to want to be a part of these kinds of licensing deals.
Part of the issue is consistency of product in different markets, which is very difficult. The notion of doing licensing agreements with cannabis strains and oils and inhalables presents an issue of consistency; consistent strain availability, extraction processes that are allowed for concentrates and what products are actually available.
Having products that are just genetics is not really the issue. You need the quality grower. But for a franchise I need the same burger from this state to be available in another state, and you can’t do that right now in the current regulatory landscape. You can’t maintain that consistent landscape of effect with so many variables and differing statewide regulations.
Bottom line: for the licensee there needs to be a consistent input which is why we’re focusing on what we consider the most important part – launching an extraction process and brand that gets us to a quality top shelf product that is scalable and consistent.
3. What are the difficulties an operator faces when trying to establish a cannabis franchise?
First one is timing and individual state licensing procedures. The established franchises are set up to be plug-and-play across the board whatever the locations. And given the very different rules and regulations of cannabis across the country, the biggest thing is having companies that want to have licensing agreements to adapt their proven business model and proven product to a potentially new client in a new regulatory environment where their brand has no presence yet.
4. How can they overcome the hurdles if that’s even possible?
By making sure all parties have the same clear understanding and rules of the cannabis market in the state they are targeting. Find out the things that are not plug-and-play immediately, and address them first.
5. Who will be the major brands in cannabis? Will they be MSOs? Or brands like Cookies?
By the very definition they will have to be MSOs but they won’t be packaged as offshoots of MSO brands. They will be presented to the market in brand form, with less or no marketing regarding their MSO lineage. So individual brands should establish themselves in a new market just like other franchises do (think: Mars, Incorporated individually marketing their products with proprietary formulations and licenses so you get Snickers, 3 Musketeers, and M&M’s vs the parent brand). And cannabis brands seeking to establish themselves in new markets need retail shelf space for their products above all else. Without that brand identity – and availability and product consistency – shelf space will be difficult to sustain for brands.
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About Canna Provisions
Canna Provisions is the next generation of cannabis dispensary focusing on a unique and thoughtful customer experience. We are here to guide you and towards the right provisions to fit your lifestyle, and provide knowledgeable support every step of the way. Founded by established industry pioneers with extensive cultivation, regulation and consumer sales experience, Canna Provisions stores provide a broad range of top-grade craft cannabis products that are locally sourced and thoughtfully produced. Life is a journey. No matter the path, trust Canna Provisions to better your journey. To learn more, visit CannaProvisionsGroup.com. Join us on Facebook, Instagram and Twitter.