By Jamie L Pearson, Founder of New Holland Group

Over the past two decades, the global cannabis industry has moved from total prohibition to widespread medical legalization and partial adult-use legalization across large portions of the United States and Europe. That progress is meaningful, albeit uneven. Cannabis has always been a politically sensitive and over-regulated sector. In 2026, despite widespread increments of progress, the cannabis market remains legally hogtied and best understood as an emerging market.

Fragmentation is the hallmark of the industry’s regulatory challenges. Operators must navigate overlapping legal regimes, shifting political priorities, and inconsistent enforcement, often within the same market. In this environment, a familiar assumption has proven increasingly fragile: that access to capital is the primary determinant of success. Experience suggests otherwise. First, capital usually comes with strings. The emboldened investors demanding board seats or operational control rarely succeed. The story of the intrepid executive full of piss and vinegar with zero cannabis experience getting kicked in the face by the industry is a movie we’ve all seen before. The eye rolls and jokes about the alcohol executives who “know everything” but actually know nothing are really about what we all know.

Cannabis is a relationship business. More so than any industry. The ones who make it and do well, what’s their secret? They pursue meaningful, long-term relationships by being true to their word and doing what they say they will do. Relationships are the fulcrum.

A Market Still Defined by Friction

In the United States, the absence of full federal legalization restricts access to traditional banking, institutional capital, and normalized interstate commerce. In Europe, progress toward adult-use legalization is advancing on a country-by-country basis, while EU-level harmonization remains limited, creating complexity for companies operating across borders.

These regulatory realities are compounded by the high fixed costs of licensing, compliance, security, testing, and infrastructure. These costs require significant upfront investment well before revenue stabilizes. The instinctive response is to raise capital. Yet in cannabis, capital raised without regulatory fluency, operational alignment, or local credibility has often forced premature scaling, constrained strategic flexibility, and exposed businesses to political and market shifts they are ill-prepared to absorb.

Why Partnerships Are a Strategic Advantage

Partnerships offer what capital cannot: adaptability rooted in experience.

Capital typically arrives with growth targets, timelines, and exit assumptions. Partnerships, when thoughtfully structured, arrive with shared incentives and complementary capabilities. They allow businesses to enter new markets without overexposing themselves, to test new categories without overcommitting resources, and to scale deliberately rather than reactively. In cannabis, adjacencies such as beverage, wellness, pharmaceutical development, and branded consumer goods, collaboration has been a force multiplier for speed to market and regulatory viability itself.

Capital Still Matters – But It Should Follow Strategy

This is not an argument against capital. Cannabis remains a capital-intensive industry, particularly at inflection points such as licensing, manufacturing scale-up, vertical integration, or retail expansion. Adequate capitalization is essential to withstand regulatory delays, policy reversals, and operational complexity.

The distinction lies in sequencing. Capital is most effective when it supports strategy rather than defines it. Businesses that establish strong partnerships first tend to deploy capital more efficiently, negotiate from a position of strength, and align investors around long-term value creation rather than short-term growth optics. In a politically contingent market, discipline in capital deployment is not caution; it is strategy.

How to Choose the Right Partners

Effective partnerships are the result of deliberate choice, not convenience. Operators evaluating potential partners should consider three foundational criteria:
First, alignment of values and long-term objectives is essential. Regulatory uncertainty amplifies misalignment, and partners must share a realistic understanding of risk, governance, and time horizon.

Second, partners should offer genuinely complementary capabilities. The strongest relationships fill critical gaps in regulatory expertise, market access, manufacturing know-how, or distribution. Duplicating existing strengths creates inefficient and unnecessary redundancies.

Third, rigorous due diligence is non-negotiable. In cannabis, reputational risk carries regulatory and commercial consequences. A partner’s track record, governance standards, and standing within the industry matter as much as their balance sheet. It would shock you how many times a simple Google search reveals a partnership that never should have happened.

Looking Ahead

As the cannabis market moves through 2026 and beyond, success will increasingly favor businesses that prioritize credibility, flexibility, and collaboration. Grants, subsidies, and selective equity investment will remain useful tools, but they are most effective when layered onto a foundation of strong partnerships.

The next phase of industry growth will not be led by the companies that raised the largest rounds, but by those that built the most durable alliances across jurisdictions, disciplines, and regulatory frameworks. In a sector still shaped by political decision-making and market forces, partnerships are not a substitute for capital; they are the means by which capital is made productive. Even if it’s counterintuitive, the truth is the right partner can be worth more than a million-dollar check.