Business
Independent Operators versus MSOs: Thomas Winstanley Weighs In
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A recent survey by New Frontier Data revealed that multi-state operators (MSOs) now control around 50% of U.S. dispensaries, especially in states with legalized adult-use cannabis. These corporations often secure the first licenses in new markets, but their dominance has come at a cost. While MSOs focus on scale and expansion, independent operators rely more heavily on community ties and patient-focused medical markets. Yet, despite their different models, both face regulatory, financial, and market challenges.
To explore the dynamics between MSOs and independents, My Cannabis spoke with Thomas Winstanley, Chief Marketing Officer of Theory Wellness — a vertically integrated cannabis brand that uniquely straddles both worlds. Below, Thomas shares how their hybrid model has shaped their growth strategy.
MSOs vs Independent Operators: Key Differences
Before diving into the interview, here’s a snapshot of how MSOs and independent operators typically compare:
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| Factor | MSOs | Independent Operators |
|---|---|---|
| Market Reach | Operate across multiple states with large footprints | Focused on local or regional markets |
| Financing | Access to larger capital pools but high burn rates | Often bootstrapped, limited access to traditional banking |
| Customer Engagement | Corporate branding, less personal | Community-based, stronger personal relationships |
| Flexibility | Slower to adapt due to layers of approvals | Agile, can pivot quickly |
| Profitability | Often report losses despite scale | Lean operations, some report steady profits |
Interview with Thomas Winstanley
My Cannabis: Is Theory Wellness an independent operator or a multi-state operator?
Thomas: At Theory, we’re an independently owned MSO, which is an oxymoron. Being independent allows us to be nimble and adjust on the fly in our respective markets. It is an advantage for us in the ever-evolving and changing landscape of the cannabis industry.
My Cannabis: What are some of the advantages of having this hybrid model?
Thomas: Being independent and vertically operated is a critical variable in our success for both markets in Massachusetts and Maine. Since we control our product pipeline, we can create new products rapidly and react to the market’s needs in a timely manner. The organization is also relatively flat in its leadership structure, allowing open communication with decision-makers. This helps us avoid some of the hang-ups of large top-down companies that are publicly traded with dozens of stakeholders who need to provide approvals.
My Cannabis: Can you say that the hybrid model is superior to the MSO model?
Thomas: Overall, the approach has served us well, as we’re more like a start-up in how we drive our growth forward. Our organization has been profitable since 2018, contrary to many larger MSOs that are seeing declining stock prices—especially given the current economic headwinds we see, not just with cannabis.
Final Thoughts
The cannabis industry is often portrayed as a battle between corporate MSOs and scrappy independents, but as Theory Wellness shows, hybrid models can thrive. By combining scale with independence, companies can balance efficiency with authenticity—two qualities that will likely determine the long-term winners in cannabis retail.
Readers wishing to keep up with Theory Wellness can visit their website or connect with Thomas Winstanley on LinkedIn.
Reference:
1. New Frontier Data (2023). Cannabis Market Report: MSOs and Independent Operators.
