This Cannabis Company Just Gave Its Employees the Keys—Without Selling to an MSO

For years, cannabis founders looking to cash out have largely faced two options: sell to a larger multi-state operator or continue running their business while waiting for better market conditions.

Organic Remedies is betting on a third path.

The Pennsylvania-based medical cannabis company announced it has completed its transition to an Employee Stock Ownership Plan (ESOP), becoming what is believed to be the first medical cannabis operator in Pennsylvania to adopt the ownership structure. Rather than selling to an outside buyer, the company will now be owned by an employee trust while continuing to operate independently.

The transaction comes as more cannabis founders begin exploring alternatives to traditional mergers and acquisitions amid compressed valuations, limited financing options, and an industry-wide consolidation wave, as reported by MjBizDaily.

What Is An ESOP?

An Employee Stock Ownership Plan (ESOP) is a federally authorized ownership structure that allows employees to gradually become beneficial owners of the company they work for.

Instead of selling shares to a private equity firm or strategic buyer, founders sell some or all of the business to an employee trust. The trust acquires those shares using a combination of company cash flow, seller financing, third-party financing, or a mix of all three.

Unlike a conventional acquisition, leadership often remains in place, and day-to-day operations continue uninterrupted.

Organic Remedies founder Mark Toigo will remain CEO following the transaction.

“Transitioning to an employee-owned organization ensures that our mission and service continue while rewarding the employees who helped us build this special organization,” Toigo said in a statement.

Why More Cannabis Companies Are Considering ESOPs

Employee ownership offers more than a succession plan.

Industry advisors argue that ESOPs can provide founders with liquidity while allowing companies to maintain their culture, workforce, and operational independence.

For cannabis businesses, the structure has attracted growing attention because of its potential tax advantages.

When structured correctly, certain ESOP-owned S corporations may eliminate federal and state income tax obligations at the corporate level, substantially increasing free cash flow. That additional cash can be reinvested into operations, used to reduce debt, or support future growth rather than leaving the business through taxation.

Supporters also argue that stronger cash flow can improve access to financing by strengthening the financial profile lenders evaluate.

A Different Alternative To Consolidation

Organic Remedies’ announcement arrives as consolidation continues across the cannabis industry.

Many founders have sold businesses because financing remained scarce or valuations failed to recover from earlier market highs.

Employee ownership offers another option.

Rather than integrating into a larger operator, companies can continue operating independently while giving employees a direct financial stake in the business’s long-term success.

A Growing Trend

Pennsylvania may be new to employee ownership, but the concept is beginning to gain traction across cannabis.

Massachusetts operators implemented ESOP structures in 2023 and 2024, making Organic Remedies one of a small but growing number of cannabis companies choosing employee ownership over traditional acquisitions.

The transaction was advised by law firm Dinsmore & Shohl, whose partner Jim Carlisle described the structure as one that both rewards employees and positions the company for long-term success.

As cannabis companies continue evaluating succession planning, capital access, and long-term independence, Organic Remedies’ transition offers founders a blueprint that doesn’t require selling the company they spent years building.

As ownership transitions, capital markets, and succession planning become increasingly important across the cannabis industry, these conversations are moving from theory to real-world execution. Join us at IgniteIt’s Colorado Market Spotlight in Denver on September 18 to hear directly from the executives, founders, investors, and advisors shaping the industry’s next chapter through discussions on capital raising, M&A, succession planning, retail growth, regulatory strategy, and operational excellence. Whether you’re building, scaling, or planning your next move, Denver is where the industry’s biggest business conversations will continue.