Goods & Services (G&S) Agreements

What This Covers

Goods & Services (G&S) Agreements are one of the most complex and misunderstood areas of TPI compliance.
Any third party who provides work, consulting, operational support, or services to a cannabis business may be considered a Goods & Services provider. Depending on compensation or authority, these providers can become a True Party of Interest (TPI).

This guide explains who counts as a G&S provider, how OCM evaluates compensation, disclosure requirements, and when agreements trigger TPI status.

What Counts as a Goods & Services Provider

A G&S provider is any person or entity offering work or support to a licensee, including:

Consultants
Contracted operators
Management companies
Operations, HR, or compliance firms
Marketing, branding, or product partners involved in cannabis activities
Supervisors or advisors with recurring responsibilities
Vendors involved in plant-touching or regulatory activities

Provider Classifications

Non-Exempt Providers

Consult on cannabis operations
Agreements heavily scrutinized for influence over management, operations, or compliance

Exempt Providers

Typically do not trigger TPI status unless compensation exceeds thresholds or they gain influence.

Examples:

Landlords
Attorneys
Accountants
Part-time CFOs
Lenders
Insurance brokers
Administrative vendors

Even exempt providers can become TPIs if their compensation or authority resembles ownership or control.

When a G&S Provider Becomes a TPI

A provider becomes a TPI if:

Compensation exceeds financial thresholds
They influence business decisions
They have authority or approval rights
Agreements affect ownership, management, or operations
Contracts include percentage-based compensation tied to revenue or margins
They hold leverage resembling ownership or control

OCM treats providers as TPIs if arrangements resemble profit sharing, operational authority, or equity rights, regardless of title.

Financial Thresholds That Trigger TPI Status

OCM uses the 10/50/250 Rule.

A person becomes a TPI if they receive, in a calendar year, more than the greatest of:

10% of the licensee’s gross revenue
50% of net profits
$250,000

This applies to all forms of compensation, including:

Monthly or flat service fees
Percentage-based fees, revenue share, or profit share
Commissions or bonuses
Performance-based payments
In-kind payments
“Stacked” agreements with related parties

OCM evaluates the entire arrangement, not just the primary contract.

Agreement Types That Raise TPI Concerns

Agreements that often require TPI disclosure include:

Management agreements handling day-to-day operations
Consulting agreements tied to revenue or profit
Percentage-based marketing or brand deals
Product partnerships requiring approval rights
Exclusive agreements controlling key business decisions
Contracts granting veto power over hiring, pricing, or spending
Licensing agreements dictating operations
“Turnkey” or operator-in-a-box models
Bundled agreements combining multiple services

Any arrangement granting ongoing influence may result in TPI classification.

What Must Be Disclosed to OCM

Applicants and licensees must upload:

Full agreement and any related or connected agreements
Compensation details and payment formulas
Scope of work and personnel involved
Ownership information for entity providers
Loan or financing terms tied to the agreement
Modifications, addendums, and renewals

Redacted or incomplete documents trigger deficiency notices.

How OCM Reviews G&S Agreements

OCM examines contracts to determine:

Whether the provider influences cannabis operations
If compensation meets financial thresholds
If the arrangement resembles ownership or control
Whether agreements violate vertical or horizontal license restrictions
Whether separate agreements create hidden financial interest
Whether disclosure is complete and consistent in the TPI Portal

OCM evaluates agreements holistically, not in isolation.

Exempt Providers and When They Become TPIs

Even exempt providers can become TPIs if:

Compensation crosses financial thresholds
They receive revenue- or profit-based pay
They gain approval or decision-making authority
Agreements bind or influence the business
They hold rights normally associated with owners or managers

Exempt status does not shield providers if arrangements resemble ownership or control.

Updating Goods & Services Agreements

Licensees must update the TPI Portal whenever:

A new G&S agreement is signed
Compensation terms change
A contract is terminated or replaced
Additional services are added
A provider begins or ceases consulting on operations
Any term affects revenue, profit, or control

Failure to update the portal is a compliance violation.

Common Issues Operators Experience

Frequent issues include:

Misclassifying non-exempt providers as exempt
Using percentage-based fees that unintentionally create TPI status
Omitting connected or “stacked” agreements
Listing the entity but not individuals behind it
Providing vague descriptions of work
Uploading incomplete documents
Failing to update disclosures after renegotiations

Consistency across all filings is essential.

Source Material

OCM TPI Hub
Goods & Services FAQ
TPI Portal Instructions & FAQ
TPI Portal (Individual, Entity, Applicant)
Retailer TPI FAQ
Supply TPI FAQ
Interim TPI Change Request Guidance