Running a cannabis company has its difficulties, but running a cannabis business across multiple states (MSO's) can be downright challenging. This blog examines how companies can manage the continually shifting sand beneath their feet as regulations change how they run their operations.
What are MSO's?
"MSO" stands for "multi-state operator." It's a term cannabis companies use to report that they're operating in several US jurisdictions. Research and planning for each state is a priority as packaging, growing, ownership, testing, and marketing rules can be quite tricky. Often businesses try to standardize their practices, but things get complicated quickly as SOP's don't work when the rules change.
It's not too late for cannabis companies looking to compete as MSO's to get into the game. But don't wait; there's a need to get positioned in these rapidly growing markets now. Creating brand guidelines is one tool that will give your brand consistency. Whatever the size of your business, having a consistent brand is critical to effectively promoting your brand, especially across state lines. Many consumers travel to other states. Providing them with consistency in your brand and the products you produce are paramount to your success.
Regulating manufacturing methods across operations can help businesses run more efficiently. It's more economical to make the same packaging for products in all states rather than creating packaging for each state individually. This type of uniformity streamlines processes. A firm should consider picking the state with the most rigorous rules and adopt those standards in all states. These ease the burden of multiple packaging designs for the same product being sold in multiple states.
Dosing and Ingredients
When you dine at a chain restaurant, you expect your food to taste the same in California as it does in Colorado. Those rules are challenging to apply to edibles manufactured in different states. THC potency may vary depending on how, where, and when the plant is grown and harvested. Notably, cannabis grown outdoors near the equator typically have a higher THC content than outdoor plants grown in Northern California, for example. Speculation around exposure to UV light and its ability to alter thc potency is still hotly debated. But for MSO's, it's a real obstacle and one that should be taken seriously.
The most significant advantage is acquiring state licenses. States appreciate companies that appear experienced and have a track record of adhering to other state compliance requirements. Consequently, larger, established companies have an advantage over small businesses when awarding licenses.
Each state's rigorous rules can create an ecosystem that favors existing companies coming in from other states. While rules may be different, executives who have worked with government officials in other states have learned how to overcome roadblocks.