Executive Compensation Is Sky High Despite Crashing Share Prices For U.S. MSOs

A major topic of conversation has been about the disparity of pay between executives and employees. Although the cannabis industry is an emerging market, the income disparity topic is just as significant. 

According to regulatory filings, executives at the largest publicly traded United States cannabis companies are being paid as much as $16 million. Based on an article by MJBizDaily, several executives were paid more than $4 million in 2021 and much of the compensation was stock and option awards.

After several executives at the world’s largest financial institutions warned about a potential recession, we consider this topic of conversation to be more important than ever. Based on the data available, MJBizDaily discovered that 7 chief executive officers (CEOs) at multi-state operators (MSOs) received more than $4 million of total compensation. When compared to prior year, only one CEO was paid more than $4 million and we find the increase to be significant. 

Although total compensation for cannabis executives has significantly increased, so has the pressure these companies are facing. During the last year, the cannabis industry has become much more competitive and leading operators are lowering prices to maintain or increase market share. 

The drop in prices has impacted profit margins and the market is aware of this trend. So far this year, several high profile North American cannabis companies have reported noteworthy changes to its management team and we will monitor how the trend continues into the end of the year. 

July has been a better month than we expected for the cannabis sector and many leading North American operators have come off their lows of the year. We believe the pullback has created great opportunities for investors and will monitor how the industry continues to advance. 

If you are interested in learning more about North American cannabis companies which are going to report quarterly earnings soon, please send an email to support@technical420.com with the subject “Cannabis Earnings Season Updates” to be added to our distribution list. 

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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