Not every license holder wants to run a cannabis business, and not every great operator holds a license. A management services agreement (MSA) bridges the two: an experienced operator runs the day-to-day business under your license, and you collect income without operating.
How a management agreement works
The license holder keeps ownership of the licensed entity. The operator — usually an established retail or delivery group with multiple locations — takes over operations: staffing, inventory, marketing, compliance execution. In exchange, the operator keeps a share of revenue or profit, and the owner receives a negotiated payment, commonly structured as a fixed monthly amount, a percentage of revenue, or a mix.
For owners, this can turn a struggling or dormant license into steady income. For operators, it's expansion without waiting years for new licenses. We currently work with one of the largest and most successful retailers in the industry, which offers management agreements to owners looking for exactly this kind of alternative income.
When it makes sense
You hold a license but operations aren't your strength. Plenty of license winners are excellent at real estate or entrepreneurship but find cannabis retail brutal — thin margins, heavy compliance, constant staffing. Handing operations to a group that already runs ten stores usually improves the numbers immediately.
Your business is underperforming but you don't want to sell. A management agreement is an alternative to an exit: keep the asset, let professionals fix the operations, revisit a sale later at a better valuation — or simply keep collecting.
You want to sell eventually, at a better price. An operating, profitable business sells for far more than a struggling one. Some owners use an MSA period to rebuild performance before listing. When you're ready, our guide on selling your cannabis business covers the process.
What to watch in the contract
Regulators care who really controls a licensed business, and ownership reporting rules apply to people with significant control or profit share — so these agreements must be drafted by professionals who know California cannabis law, and disclosed properly. Key commercial terms: how revenue is split and audited, who funds inventory and working capital, term length and exit rights, performance standards, and what happens to staff and vendor contracts if the agreement ends. Insist on transparent reporting — you should see the same METRC and POS data the operator sees.
Explore whether it fits your situation
We've placed owners into management agreements and unwound bad ones. If you hold a license that isn't earning what it should — or you're an operator hunting for expansion — contact Evergreen Broker. And if you'd rather simply sell, browse comparable listings to see what businesses like yours are asking.