By and large, cannabis businesses are small businesses. We’ve represented hundreds of these businesses over the years, in many states. Within these businesses one finds many kinds of people. They include legacy operators transitioning from traditional markets, to well-heeled investors coming from industries like banking and private equity. And everyone in between.
Of course, performance has been mixed. We have clients we’ve worked with regularly for five or six years here in Oregon, for example, but we’ve also seen many clients fail. Some mistakes and circumstances can be overcome; others not so much. When a cannabis business goes off the rails it can happen for any number of reasons. Sometimes these are market factors or plain old bad luck, but the longer I do this the more I’m convinced that a leading cause of pain is poor business planning. Or, no real planning in many cases.
I’ve come across extreme examples of this, like people saying “I didn’t realize we’d have to pay so much tax” or “the state rules didn’t actually allow for our model.” Others are destined to fail from the start. But mostly, the businesses I’ve seen knuckle under for lack of planning are people who had