Early Start & Early Win in Pennsylvania
Maitri Medicinals, a medical cannabis company located in Pennsylvania, engaged Canna Advisors the day after legislation passed in their state for business modeling and license pursuit. Maitri leaders recognized the opportunity of launching their initiative early in the nascent Pennsylvania cannabis industry and also knew that they needed expert guidance to be successful in their efforts.
The Maitri principals came to Canna Advisors because they wanted to win a license – and that is exactly what they did.
Collaboration, Teamwork & Trusted Advice
The principals of Maitri are passionate about cannabis and are community-focused in their mission - to produce the highest quality cannabis products available to adults and children who suffer from qualifying conditions and diseases in the Commonwealth. They believe strongly in the benefits of medical cannabis and are passionate about its ability to improve the lives of patients in their state.
From the start of their engagement, Maitri was a proactive client with a strong concept, a community-driven focus, and a diverse group of executives. The Canna Advisors team worked with Maitri from financial modeling and business plan development through application submittal. The culmination of all the collective hard work was a license award by the State of Pennsylvania for 3 dispensaries in the Pittsburgh area. Due to the success of the synergistic relationship, Canna Advisors and Maitri Medicinals continue to work together to get the dispensaries operating.
One example of the collaboration and team approach between the Maitri team and the Canna Advisors team was demonstrated when our VP of Client Services at Canna traveled to Pennsylvania and participated in the financial pitch to help get investors to support the Maitri plan. Another example was when the Canna Advisors team offered Maitri PR advice and how to effectively handle potentially negative situations that can occur from opposition in the media.
A key benefit to Maitri was that the Canna Advisors team is not operating other businesses. That means that the Canna Advisors team was able to provide a staff of people who spent 100% of their time focusing on winning a license for Maitri. With its extensive license application experience, the Canna team guided Maitri through the application process, ensured they were focusing on the necessary elements of the application, and used their previous operational experience to ensure Maitri understood the requirements of operating a cannabis business.
The involved and collaborative approach and strong synergy across the Maitri and Canna Advisors teams led to success. Once Maitri was awarded a license, they extended the scope of their relationship with Canna Advisors to assist with startup and implementation as a result of the harmonious and symbiotic relationship.
Regulatory & Operational Expertise Make the Difference
The Canna Advisors team used their regulatory and operational expertise to help the Maitri team identify and acquire appropriate real estate for their cultivation and dispensary operations. Maitri relied on the guidance of the Canna Advisors team to make sure the location was both viable and compliant and also set them apart in the application scoring process.
The Canna Advisors team applied their collective knowledge to help Maitri select a location that was in an area designated for revitalization and economic stimulus to gain additional points on their application.
The team formed a close and trusted relationship over the course of the engagement, with the Maitri team relying on the Canna Advisors team for accessibility and responsive, on-point advice.
The Maitri team was especially appreciative of guidance on “watch outs”, on-site visits, and serving as a trusted advisor on staffing structure and team dynamics. The Maitri team knew that the Canna Advisors team had their best interest in mind and would guide them with clear perspectives and focus on the project objectives.
The Canna Advisors team also helped Maitri shape their team structure and develop roles. Canna Advisors provided a detailed staffing plan, which included job descriptions, hierarchy, and hiring requirements. Once Maitri principals understood the staffing requirements, they were able to efficiently plug the right people into the right roles.. With this guidance, the Maitri team was able to avoid wasteful spending by staffing the business with the right resources at the right time. Canna Advisors also gave advice about the structure of engagements with employees, advisors, and contractors. For instance, the Canna team advised Maitri when it was appropriate to offer a percentage of ownership rather than paying an exorbitant salary or hefty contractor fee, when paying for expertise at one point in time was more appropriate and beneficial.
Financial Modeling with a Cannabis Industry Filter
While the Maitri team were experienced in business operations, their knowledge of the industry was at the novice level. Through the in-depth financial modeling with the Canna Advisors team, the Maitri team was able to get a clear understanding of the undertaking required to go from license application to opening and operating a cannabis business.
Through the generation of a robust financial model, with a filter of the cannabis industry, Canna Advisors was able to offer specific information relative to the financial requirements of this highly regulated industry that are new and different than standard business operations – and differ widely by state. The Canna Advisors team factors in the nuances specific to the industry that drive significant differences in successful operations such as higher expenses for insurance, bonding, and security. Because the process to create the perfect financial projections for the Maitri team was so detailed on a granular level, the financial modeling process also served as a “Cannabis 101” course for the Maitri team.
Another factor that adds complexity to the financial modeling and can cause business owners to wring their hands is the IRS 280E tax code.The Canna Advisors team applies insider insights to give clear guidance and make sure this item is thoroughly considered. With the appropriate resources involved, strategies to mitigate the impact of this concern are built into the plan from an early phase.
With the detailed and thorough financial model from Canna Advisors, the Maitri team was able to effectively raise funds and develop a solid operating foundation. The robust and actionable financial model quickly laid a foundation of confidence and trust in the Canna Advisors team that led to successful outcomes for Maitri Medicinals.
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