Photo by Richard T on Unsplash
Many multi-state operators (MSOs) in the cannabis industry have the sole aim to be the largest cannabis producers in the country.
The common problem with this goal is that many of these large companies either only focus on having a large footprint at the cost of growing lackluster marijuana or offer high-quality marijuana but can’t scale.
One company that has managed to hit two birds with one stone is leading vertically-integrated MSO, Ayr Wellness, Inc (CNSX: AYR.A). The company has made headlines in recent times for strategic acquisitions while focusing on growing craft quality marijuana at scale.
Grabbing the Low-Hanging Fruit
Ayr Wellness has adopted a strategy that involves creating meaningful revenue.
Unlike many other MSOs in the U.S. that try to set up production in numerous states and building facilities in each of those states, Ayr is focused on a specific subset of states that comprise the lion’s share of the U.S. cannabis market.
Usually, when companies open up cultivation in a new state, they have two choices — either they can hire cultivation talent for that individual state or they can shift resources by moving from one city to another. For instance, many Illinois-based MSOs have seen a massive quality drop over the past few years as a result of moving their cultivation talent out of Illinois and into the newly entered state.
By focusing on a more strategic footprint, Ayr avoids diluting its cultivation talent. The company plans to focus on 12-15 states because it believes that those states constitute ~80% of the country’s consumer wallet. Ayr’s robust team undergoes specific training programs and standard operating procedures to maintain its boutique approach in every state it operates in and manages to do it at scale.
Ayr has built its footprint in 8 states — Arizona, Florida, Illinois, Ohio, Massachusetts,