How Cannabis Companies Build Value Through Openness

Access to capital is a matter of trust. With investors and lenders applying stricter due diligence than ever, cannabis companies are realizing that transparency is their most valuable asset. Openness about financials, operations, and risk not only reduces regulatory friction but also builds investor confidence and strengthens long-term enterprise value.

Why Transparency Is a Business Strategy, Not a Moral Choice

In cannabis, transparency has become structural to competitiveness. Operators face a level of scrutiny uncommon in other industries: federal illegality, fragmented state oversight, and a history of overpromising and underdelivering. Investors and regulators now demand verifiable data, before committing capital or approvals. Opacity and mess are liabilities. When trust erodes, valuations collapse faster than margins.

The cannabis industry has long struggled with reputational damage from mismanagement and proven cases of fraud that severely eroded investor trust. The implosion of one “American Patriot Brands”, charged by the SEC in 2023 for falsifying revenue and diverting investor funds, is a case in point. Within months of the filing, the company’s financing channels dried up and its reputation became unrecoverable. 

More recently, several first-tier companies have faced scrutiny in Europe after Portugal’s Polícia Judiciária opened investigations into illicit-market supply chains operating through the Portugal Hub. While the probes remain ongoing, the allegations have reignited investor concerns about opaque international operations and underscored the lingering governance vulnerabilities across the global cannabis trade.

Financial Openness and the Cost of Capital

Capital markets punish uncertainty, and investors usually price disclosure risk.

When Curaleaf restated its 2021–2022 results after recognizing revenue from transactions with “no commercial substance,” it breached informational trust. The correction dented investor confidence and introduced a credibility discount. Likewise, AYR Wellness’s 2025 filing delay, which led to a temporary trading halt in Canada, shows how late or incomplete disclosures can immediately restrict liquidity and access to credit.

Contrast that with Green Thumb Industries (GTI), which has made transparency a cornerstone of its market position. GTI’s consistent, GAAP-compliant reporting and openness about both profits and tax burdens have made it a benchmark for institutional investors looking for stability in cannabis. The result is reputational, and it translates into tangible capital advantages, from better debt terms to stronger analyst coverage. Transparency, in this sense, is financial leverage.

After a fatal workplace incident in 2023, Trulieve Cannabis Corp. chose to cooperate fully with OSHA, publicly acknowledging the issue, paying fines, and commissioning an independent study on cannabis dust hazards. That approach—acknowledging fault, fixing the problem, and documenting the response—transformed a potential scandal into a demonstration of governance maturity.

Governance and Compensation: Transparency Beyond the Balance Sheet

Governance transparency extends beyond reporting, to include fairness and alignment. In 2024, Tilray Brands disclosed that its CEO earned more than $10 million while its stock traded below $2, prompting shareholder backlash and withheld votes for board members. The disclosure itself wasn’t the problem; the perceived imbalance was. 

Investors expect openness paired with accountability. Cannabis companies that proactively align executive incentives with shareholder outcomes avoid the reputational cost of reactive governance fixes.

Strategic Alignment: Information as a Coordination Tool

For founders and executives, transparency is also about strategic communication.
When markets tighten, companies often face hard pivots: restructuring debt, scaling down assets, or preparing for mergers. 

The firms that navigate those transitions successfully are the ones that involve investors and lenders early, explain their rationale, and quantify the trade-offs. Open dialogue prevents rumors, stabilizes share prices, and keeps key partners aligned.

In practical terms, that means transparent forecasting, data-driven performance dashboards, and quarterly reviews that answer—not avoid—tough questions.

Operationalizing Transparency

Transparency needs systems. Quarterly financial updates, accessible investor portals, and internal town halls help keep stakeholders informed and engaged.

Some mid-sized operators have earned reputational premiums by publishing consistent performance updates and clearly explaining strategic pivots. That communication loop builds trust that outlasts short-term market noise.

Well-documented compensation structures, clear partner payout policies, and contractually defined exit terms are equally critical. They prevent disputes before they start and demonstrate organizational discipline—the kind of discipline investors increasingly reward.

The Value Multiplier

Transparency compounds value. 

It reduces perceived risk, lowers the cost of capital, and improves governance resilience. In an industry still normalizing its relationship with regulators and investors, transparency isn’t a PR stance—it’s a financial strategy.

At Verdant Strategies, we see the same pattern across our client base: companies that communicate clearly, document consistently, and lead with integrity outperform peers not because they avoid mistakes, but because they manage them in plain sight.

In cannabis, trust is currency. The most valuable operators are those who treat transparency not as compliance, but as capital.

By fostering openness, cannabis businesses can show that they are not only compliant with regulations but also financially sound—boosting their ability to raise capital and close deals.

While the industry has faced challenges in raising capital and maintaining margins, advancements in technology and industry standards are helping cannabis businesses become more transparent—both internally and with consumers.

Some companies are leveraging technology to create transparency across the supply chain. These tools allow businesses to verify product quality and safety through platforms that connect growers, processors, and retailers with lab testing results.

Specialized services, like those we provide at Verdant Strategies, can support transparency in your business and help make your daily operations easier, freeing you to focus on the high-level strategic decisions that demand your attention.