Companies leverage capital, partnerships and diversification to expand beyond state lines
When the U.S. marijuana industry was getting off the ground two decades ago, the business landscape consisted of mom-and-pop stores and amateur extractors. Product was sold in Ziploc bags, and 20,000-square-foot grows were considered big.
In short, marijuana businesses were small and simple, and it was hard to imagine chains or integrated multistate operations – especially with federal prohibition and the threat of legal interference hanging over entrepreneurs’ heads.
A few years on, multistate marijuana businesses have gone from unimaginable to increasingly common – and perhaps necessary to survival in an age characterized by consolidation. Scan any list of marijuana business license applicants from some of the more recent states to launch medical and recreational markets (think Maryland, Nevada, Ohio and Pennsylvania), and you’ll find a significant number are multistate operators.
While multistate marijuana businesses are no longer rarities, trying to become one remains difficult – and could result in millions of dollars in losses if companies overreach or market assumptions aren’t fulfilled.
What does it take to become a multistate marijuana business operator?
Marijuana Business Magazine spoke with the CEOs of four multistate businesses – Columbia Care, KushCo Holdings, MariMed and Organa Brands – to learn how they took their companies from single-state operators to marijuana industry behemoths with operations and/or products in 10 or more states.
The four companies each took a different path and faced unique challenges to becoming a multistate powerhouse.
“Different parts of the country respond to different things,” said Chris Driessen, president of Denver-based Organa Brands, an extraction and manufacturing company that produces a variety of oil-related products. “The brands roll out at different velocities.”
But there are numerous common threads in each of their stories – threads that entrepreneurs with multistate ambition can draw from. They include:
- Market research
- Brand development
- Plans for future expansion
These and other issues facing companies that want to expand into other U.S. states and even abroad are explored on these pages: