Vertical integration vs. licensing model

“The vertically integrated cannabis operator has a regulatory advantage in control and a capital disadvantage in execution. The licensing-only operator has the inverse. The right structure depends on the state, the capital stack, and the operator's core competency — and I have seen both models succeed and fail at scale.”

— Robert Hoban, Hoban Law Group

“The vertically integrated cannabis operator has a regulatory advantage in control and a capital disadvantage in execution. The licensing-only operator has the inverse. The right structure depends on the state, the capital stack, and the operator's core competency — and I have seen both models succeed and fail at scale. What I caution against is letting the licensing model become a royalty-extraction vehicle that hollows out the operator's actual cannabis expertise. The value in this industry is still in operational excellence and regulatory relationships. License aggregation without those two pillars is a house of cards.”

— Robert Hoban, Hoban Law Group