Over the past few years, I’ve helped run a cannabis company in three states, each at a different stage of development. Arizona is mature, competitive, and disciplined. Kentucky is brand new, facing supply limits, and still working to let residents know there’s a medical program. Missouri is somewhere in the middle. Running all three at once can feel disorienting, but it’s also helpful. It’s like watching a time-lapse video of the industry growing up while standing in every frame at once.
Eventually, patterns become apparent. The rules differ from state to state, but we’ve seen recurring pressures as markets develop. I now think of these as six stages in a market’s life cycle. They can overlap, and they don’t always unfold neatly, but recognizing them helps us prepare for what comes next.
Stage 1: consumers focus on a simple metric
First, consumers look for the simplest way to judge products. In a new market where the product is unfamiliar, people focus on the one number that seems to separate “good” from “bad.” In cannabis, that’s THC percentage. The number is easy to read and compare, so it feels like a measure of value. But THC percentage alone tells customers too little about whether a product will suit them. Higher potency doesn’t necessarily mean a better experience.
Simplicity wins at first. One challenge for a growing market is helping consumers move beyond the shortcut they learned early on.
Stage 2: the market builds incentives
During the second stage, businesses begin organizing around that same metric. Once customers shop by THC percentage, retailers emphasize potency, growers prioritize it, and testing results become a selling point. Each reinforces the others, making the cycle difficult to break. The market doesn’t just adopt a limited measure of quality; it builds commercial incentives around it.
Thriving in a young market means recognizing these cycles and understanding how your own business reinforces them. No single group created the problem, but each has a role in changing it.
Stage 3: regulatory consequences become clearer
Regulation shapes a market from the outset, but its consequences aren’t always obvious immediately. Rules intended to protect the public can also work against other market goals. Consider restrictions that exclude people with certain felony convictions from participating in the legal industry. When those restrictions include past nonviolent cannabis offenses, they can shut out experienced growers and leave their expertise outside the regulated market.
Regulation creates incentives backed by law. To understand a market, look beyond what its rules require of your business and consider whose participation they encourage, whose they restrict, and what behavior they reward.
Stage 4: oversupply ends speculation
In a market with limited supply, it’s easy to plan as though scarcity will last. Arizona taught us how quickly shortage can become surplus. Kentucky’s current supply constraints are a reason to prepare for that possibility, not assume it can’t happen. When supply outpaces demand, businesses built around a continuing boom become vulnerable. This is when structure becomes more important than ambition.
You can see the pressure from our purchasing manager’s desk in Arizona: average products offered on attractive terms, brands trying to clear excess inventory, and more suppliers competing for limited shelf space. That’s why we see vertical integration as one way to build resilience. For us, it offers more control over shelf space, inventory, and planning. Those advantages become especially valuable during a glut. The choices that help a business withstand surplus often are made quietly, while supply is still tight.
Stage 5: operational discipline takes over
In the fifth stage, operational excellence takes the place of speculation. When growth slows, the habits from the gold rush — rapid expansion, marketing based on potency, and scaling on faith — become liabilities instead of strengths. What matters now is discipline: controlling costs, following rules closely, and being able to run a business that is part pharmacy, part consumer brand, and part lean retailer, with the mix changing in every state. All this happens on top of onerous banking and tax systems.
Operational discipline needs to be built before a market reaches this stage. Our Kentucky drive-thrus are a good example. When we added them at some locations, we worked with the state to designate each drive-thru area as a separate room in the inventory-tracking system. That allowed us to hold products there for pickup instead of sending staff across the store for every order.
These details rarely make headlines. But companies that build systems to handle them — centralizing the right tasks, identifying rule changes early, training staff, and making new procedures part of daily practice — are better prepared than those that treat every adjustment as a crisis.
Stage 6: trust becomes a lasting advantage
As a market matures, customer trust becomes an increasingly durable advantage. New products and competitive prices still matter, but neither guarantees customers will return. Trust gives them a reason to come back even when they have plenty of other choices.
In our stores, it sounds like this: A customer returns and says the strain we suggested was almost right but not perfect, so the budtender asks, “Do you trust us enough to try again?” Everyone’s endocannabinoid system is different, so finding what works can take a few tries. That question sums up our whole approach. That’s also why we send budtenders to community events. The first conversation can happen before someone visits a store, giving a future customer a familiar face behind the counter. Building those relationships is part of running the business.
Trust is an asset you can’t acquire on demand during a slowdown. It develops through consistent experiences over time, long before you need to draw on it.
When you put these six stages together, you get more than just a collection of opinions about cannabis. You get a theory of how the industry matures. Working across three markets has given us a practical way to anticipate changing business priorities. Sometimes, we see stage six and stage one on the same Monday.
This is a map, not a law. It reflects our experience in three states, with all the blind spots that entails. Medical and adult-use markets can develop differently, and each state’s rules shape the path. Some markets may move through these stages in a different order or reveal pressures we haven’t encountered yet.
Even so, the patterns have been useful enough that we now ask three questions about every market we operate in or consider entering:
- Which stages are most evident here?
- What did earlier markets teach us about what might come next?
- What should we start building now for a stage that hasn’t arrived yet?
That’s the real benefit of working across the life cycle at once. The future becomes less surprising because we’re already experiencing parts of it somewhere else.
Myles Mayfield began his cannabis career in 2020 as a budtender at NatureMed. After moving into marketing, he helped develop the company’s marketing systems, led community partnerships, and coordinated with brand vendors. Today, as director of marketing, he oversees strategy across NatureMed’s operations in Arizona, Missouri, and Kentucky. His experience from the sales floor to multistate leadership shapes his focus on retail operations, customer experience, and practical strategies for navigating evolving cannabis markets.
