Katie Rodriguez here, digitally joining you with coffee in hand, catching up on news.

I wanted to share a story my colleague, Pam Marino, reported in this week’s edition of the Weekly about the seemingly competitive nature of the cannabis industry. It’s a juicy local story, and one that showcases strong reporting to reveal a familiar business strategy used to tilt the scales in a company’s favor.

On its face, 10 cannabis companies appear to be vying for a single retail cannabis license in Pacific Grove.

But after doing a bit of digging, thanks to a tip from a reader, Marino found that the competition is largely a facade. Beneath the veil, eight of those companies are actually connected to a single entity.

Marino reports what appears to be “permit stacking”—when coordinated affiliates submit multiple applications to gain multiple entries in a licensing lottery. In other words, it’s a strategic way to increase a company’s odds of winning that license.

“It makes a lot of sense,” Anthony Davi Jr., the owner of a building where cannabis companies are interested in setting up shop, told Marino. He explains that completing an application can cost anywhere from $7,000 to $20,000. “It’s kind of like going to a casino. You’re going to see if they win or not.”

Reading this story made me reflect on the many levers companies—large and small, across industries—use to quietly set up shop or expand their footprint. 

Careful business restructuring, through acquiring companies as subsidiaries or setting up separate LLCs, serve all kinds of purposes. Marino’s story makes me think of the chess moves we see companies deploy all the time, from limiting legal exposure to consolidating market power while maintaining the appearance of competition (just name an industry).

Curious about who the players are in the local retail cannabis space? You can read the full story here.