Setting expectations too low leaves money on the table. Setting them too high burns through capital and patience with little to show for either. It is a tension every dispensary operator, multistate company, and cannabis brand recognizes - and a new body of research from behavioral and ecological science puts a finer point on it than most business consultants do. The core finding: the best outcomes come from aiming above average, but not so far above average that the standard becomes unreachable.
That framing has direct relevance to how licensed cannabis businesses make resource decisions - whether to hold a retail location or abandon it, when to add a SKU and when to cut one, how aggressively to expand a wholesale footprint. Colorado operators, for instance, have spent years recalibrating after the adult-use market matured and wholesale prices compressed. Tools like point-of-sale for Colorado dispensaries can give operators real-time inventory and sales data that make the difference between a grounded decision and a guess - but the data is only as useful as the benchmark an operator is measuring against. The research question buried in this new modeling work is one cannabis retailers face every quarter: when is your current patch worth staying in, and when is it time to move on?
The Math Behind Knowing When to Stay or Move
University of Wyoming bioeconomist Matthew Burgess and colleagues built a mathematical model examining how agents - stand-ins for any decision-maker - optimize their search for rewards over time. The finding that came out most clearly: an agent's optimal ambition sits strictly above average, but also strictly below some imagined maximum. In Burgess's earlier work studying fishermen, the operators who fared best were those who stayed in a patch only when it performed better than the fleet average - not when it merely performed, and not when it required outperforming some theoretical best-case scenario.
For cannabis retailers, the parallel is not abstract. A dispensary's category managers routinely face this kind of question with every reorder decision. Does a mid-performing flower SKU get restocked, or does that shelf space go to something with better velocity? Does a delivery route that's covering costs but not generating margin get expanded, or does it get cut? The model's message - stay above average, don't chase perfection - maps cleanly onto how experienced operators describe sound inventory discipline. Holding a product that's doing slightly better than the store average is defensible. Holding it because it might someday hit the top of the menu is a different story.
Social Comparison Distorts the Benchmark
Here is where the research turns genuinely useful for the cannabis business context, because it does not just confirm the "aim high but be realistic" truism. It identifies a specific mechanism that causes operators - and people in general - to overshoot: estimating the possible from what others appear to have achieved, rather than from an honest read of the actual distribution of outcomes.
Ekaterina Landgren, a post-doctoral fellow at Stanford and a co-author of the paper, put it this way: when you observe only the successes of peers - without seeing the rejections, the failed expansions, the license applications that went nowhere - you form a distorted picture of what's available. In the model, agents who had to estimate reward distributions by watching peers consistently overshot, ending up with worse outcomes than agents who had accurate information. They kept searching past the point where they should have settled.
Cannabis trade media, investor decks, and industry conferences are, in their own way, exactly the kind of curated highlight reel Landgren describes. A multistate operator's press release about opening its fortieth location says nothing about the fifteen it closed quietly, the states where it pulled its license application, or the wholesale contracts it couldn't sustain. A brand's placement in a top dispensary chain doesn't broadcast the dozens of buyers who passed. Operators who use public success stories as their primary benchmark for what's achievable risk exactly the overshoot the model documents.
What a Calibrated Ambition Looks Like in Cannabis Operations
Applying this practically means building comparison from real operational data rather than aspirational benchmarks. Basket size, transaction volume, category mix, and margin per square foot - measured against a store's own historical performance and genuine regional averages, not against the most-cited success story at a trade conference - give a more honest picture of what's within reach.
This also applies at the regulatory and licensing level. Operators who have pursued license applications in every jurisdiction where adult-use legislation looked promising have often found themselves overextended - carrying compliance costs, legal fees, and staffing obligations in markets that either stalled or became structurally unworkable. The instinct to capture every available opportunity is understandable; the record of operators who spread too thin is a useful corrective.
The research also points toward a less obvious implication: being willing to see the full distribution of outcomes - including your own failures - is not a sign of lowered standards. It is the condition that makes realistic calibration possible. A "CV of failures," as one academic community briefly popularized, is not a confession of inadequacy. It is, as Landgren noted, a way of seeing the whole picture. For cannabis operators working in a market defined by compressed margins, shifting regulation, and intense competition for shelf space and consumer attention, that kind of honesty about where you actually stand is not pessimism. It is a prerequisite for making the next move well.
