Pennsylvania’s Organic Remedies Shifts to Employee Ownership

Organic Remedies, a Carlisle, Pennsylvania medical cannabis operator, is handing ownership of the business to the people who run it. Chief executive Mark Toigo announced on July 6, 2026 that the company is transitioning to an employee stock ownership plan, or ESOP — a move that converts more than seven years of family-built equity into a retirement asset for the workforce and gives the founders an exit without selling to a competitor or a private-equity buyer.

Toigo and his wife and co-owner, Jaime Toigo, cast the decision as a way to keep the company intact. The transition rewards the employees who built the business while letting its operations and mission continue, they said. Mark Toigo stays on as CEO and the rest of the management team keeps their roles — the kind of continuity that is a main reason closely held companies choose this route over an outright sale.

The Toigo family founded Organic Remedies in 2018, opening its first dispensary that February. Mark, a horticulturist who once ran what the company describes as the largest organic tomato greenhouse in North America, and Jaime, who came out of the construction industry, built the operation alongside former Toigo Farms finance chief Ryan Simpson and pharmacist Eric Hauser. The company now runs six dispensaries across Pennsylvania and cultivates and manufactures its own products.

How the ownership transfer works

An ESOP is a qualified retirement plan that invests primarily in the stock of the company that sponsors it. As the IRS describes it, the plan is a defined-contribution retirement vehicle that the tax agency and the U.S. Department of Labor jointly oversee. The company sets up a trust, which acquires shares from the existing owners; those shares are allocated to employees’ individual accounts over time, at no cost to the workers. When an employee retires or leaves, the company buys the shares back at their appraised value and the departing worker collects the cash.

For staff — cultivation workers, dispensary consultants, pharmacists and corporate employees — that means accumulating an ownership stake tied to the company’s performance rather than buying in with their own money. It also creates an obligation the business must fund over time: as employees leave, the company has to repurchase their shares, a recurring cash commitment. Employees, in turn, owe ordinary income tax on their accounts only when they take distributions in retirement. Organic Remedies says it is Pennsylvania’s first employee-owned medical marijuana company.

Why the structure appeals to cannabis operators

Employee ownership is not new — most ESOPs exist to give the departing owner of a closely held company a buyer — but it has drawn sharper interest in cannabis for a reason unrelated to succession. Plant-touching operators are hit by a federal tax rule that bars any business trafficking in a controlled substance from deducting ordinary expenses such as rent, payroll and marketing. The effect is that cannabis companies are taxed on gross profit instead of net income, pushing effective tax rates well above those of an ordinary business.

An ESOP can also blunt that penalty, according to cannabis tax specialists. When a company elects S-corporation status and is owned entirely by an ESOP, its profits pass through to the trust, which is a tax-exempt entity — so, advisers say, the business owes no federal income tax, and in most states no state income tax either. With no taxable income, the disallowed deductions stop mattering. That math has turned the structure into a talking point across the industry, and MyCannabis has interviewed one of the specialists who pioneered these deals for operators in Massachusetts and beyond.

Organic Remedies did not say in its announcement whether its plan will hold 100% of the company or whether the business is organized as an S corporation, and it did not present the move as a tax strategy. Because the financial payoff depends on exactly those details, how much of the tax advantage the company captures is not yet clear from what it has disclosed.

A hard market for clean exits

The timing reflects the state of the industry as much as the Toigos’ plans. Capital has tightened across cannabis, valuations have fallen and cash buyers are scarce — conditions that make a conventional sale difficult even for a profitable, established operator. Pennsylvania compounds the problem: the state remains medical-only, and its move toward an adult-use market has repeatedly stalled in the legislature, denying operators the growth a recreational launch would bring.

Against that backdrop, selling to employees offers what a strategic buyer often can’t: a fair-market price for the founders, continuity for the workforce and the company’s local footprint, and potentially a lasting tax advantage. Tying compensation to ownership also gives Organic Remedies a retention tool in an industry known for high turnover.

What remains to be seen is whether the deal closes on the terms described, how much of the staff ultimately participates, and whether other Pennsylvania operators facing the same squeezed exit market take the same path.