ESOP Advisory

Empowering cannabis business owners through employee ownership

For cannabis business owners seeking liquidity, an Employee Stock Ownership Plan (ESOP) offers a compelling and tax-advantaged path to monetization. An ESOP allows owners to sell stock in their company to an ESOP trust, creating a retirement plan for the benefit of employees.

In partnership with Verit Advisors, the national leader in ESOP advisory and financing with over 500 completed engagements across a 30-year track record, Sharp brings together deep cannabis industry knowledge and unmatched ESOP transaction expertise. Together, we deliver a fully integrated advisory experience tailored to the unique regulatory, financial, and cultural dynamics of the cannabis sector.

ESOPs are especially well-suited to the cannabis industry. With M&A activity muted and traditional exit paths limited, ESOPs provide an effective monetization opportunity at fair value. As a tax-exempt entity, an ESOP-owned company pays no federal income tax (and state income tax in many cases), dramatically improving cash flow and accelerating debt repayment. Selling shareholders may also benefit from a 1042 exchange, allowing for the deferral of capital gains taxes on the sale.

Beyond the financial advantages, ESOPs align naturally with the cannabis culture of collaboration, community, and shared success. Regulators have been receptive to ESOP structures, as they keep ownership local, rooted in strong values, and aligned with community integrity. Employee-owned companies consistently demonstrate higher productivity, stronger retention, and greater profitability than their peers.

Our process is rigorous, transparent, and built to withstand regulatory scrutiny. We work alongside trusted ESOP trustees, legal counsel, and lenders to streamline every phase — from initial feasibility through closing — reducing execution risk and ensuring alignment among all stakeholders.

We provide the following ESOP advisory services: