diff --git a/cmd/kots/cli/install.go b/cmd/kots/cli/install.go
index 5b8f7a1e5b..7d700e7ff7 100644
--- a/cmd/kots/cli/install.go
+++ b/cmd/kots/cli/install.go
@@ -163,10 +163,11 @@ func InstallCmd() *cobra.Command {
 			}()
 
 			upstream := pull.RewriteUpstream(args[0])
-			preferredChannelSlug, err := extractPreferredChannelSlug(upstream)
+			preferredChannelSlug, err := extractPreferredChannelSlug(log, upstream)
 			if err != nil {
 				return errors.Wrap(err, "failed to extract preferred channel slug")
 			}
+
 			license, err = kotslicense.VerifyAndUpdateLicense(log, license, preferredChannelSlug, isAirgap)
 			if err != nil {
 				return errors.Wrap(err, "failed to verify and update license")
diff --git a/cmd/kots/cli/pull.go b/cmd/kots/cli/pull.go
index d4dbdd0ba5..25ad78b4e2 100644
--- a/cmd/kots/cli/pull.go
+++ b/cmd/kots/cli/pull.go
@@ -101,14 +101,15 @@ func PullCmd() *cobra.Command {
 			}
 
 			upstream := pull.RewriteUpstream(args[0])
-			preferredChannelSlug, err := extractPreferredChannelSlug(upstream)
-			if err != nil {
-				return errors.Wrap(err, "failed to extract preferred channel slug")
-			}
 
 			log := logger.NewCLILogger(cmd.OutOrStdout())
 			log.Initialize()
 
+			preferredChannelSlug, err := extractPreferredChannelSlug(log, upstream)
+			if err != nil {
+				return errors.Wrap(err, "failed to extract preferred channel slug")
+			}
+
 			// If we are passed a multi-channel license, verify that the requested channel is in the license
 			// so that we can warn the user immediately if it is not.
 			license, err = kotslicense.VerifyAndUpdateLicense(log, license, preferredChannelSlug, false)
diff --git a/cmd/kots/cli/util.go b/cmd/kots/cli/util.go
index 4d4ea33f56..ac22cdec04 100644
--- a/cmd/kots/cli/util.go
+++ b/cmd/kots/cli/util.go
@@ -7,6 +7,7 @@ import (
 	"strings"
 
 	"github.com/pkg/errors"
+	"github.com/replicatedhq/kots/pkg/logger"
 	"github.com/replicatedhq/kots/pkg/replicatedapp"
 	"github.com/replicatedhq/kots/pkg/util"
 )
@@ -53,7 +54,7 @@ func splitEndpointAndNamespace(endpoint string) (string, string) {
 	return registryEndpoint, registryNamespace
 }
 
-func extractPreferredChannelSlug(upstreamURI string) (string, error) {
+func extractPreferredChannelSlug(log *logger.CLILogger, upstreamURI string) (string, error) {
 	u, err := url.ParseRequestURI(upstreamURI)
 	if err != nil {
 		return "", errors.Wrap(err, "failed to parse uri")
@@ -67,5 +68,9 @@ func extractPreferredChannelSlug(upstreamURI string) (string, error) {
 	if replicatedUpstream.Channel != nil {
 		return *replicatedUpstream.Channel, nil
 	}
+
+	if log != nil {
+		log.ActionWithoutSpinner("No channel specified in upstream URI, falling back to channel slug 'stable'.")
+	}
 	return "stable", nil
 }
diff --git a/cmd/kots/cli/util_test.go b/cmd/kots/cli/util_test.go
index a270dbaecf..50262ae0f9 100644
--- a/cmd/kots/cli/util_test.go
+++ b/cmd/kots/cli/util_test.go
@@ -111,7 +111,7 @@ func Test_extractPreferredChannelSlug(t *testing.T) {
 			args{
 				upstreamURI: "replicated://app-slug",
 			},
-			"stable", // default channel
+			"stable",
 			false,
 		},
 		{
@@ -133,7 +133,7 @@ func Test_extractPreferredChannelSlug(t *testing.T) {
 	}
 	for _, tt := range tests {
 		t.Run(tt.name, func(t *testing.T) {
-			got, err := extractPreferredChannelSlug(tt.args.upstreamURI)
+			got, err := extractPreferredChannelSlug(nil, tt.args.upstreamURI)
 			if (err != nil) != tt.wantErr {
 				t.Errorf("extractPreferredChannelSlug() error = %v, wantErr %v", err, tt.wantErr)
 				return
diff --git a/pkg/license/multichannel.go b/pkg/license/multichannel.go
index db7f58d444..daad55f299 100644
--- a/pkg/license/multichannel.go
+++ b/pkg/license/multichannel.go
@@ -1,6 +1,9 @@
 package license
 
 import (
+	"fmt"
+	"strings"
+
 	"github.com/pkg/errors"
 	"github.com/replicatedhq/kots/pkg/logger"
 	"github.com/replicatedhq/kots/pkg/replicatedapp"
@@ -40,11 +43,17 @@ func VerifyAndUpdateLicense(log *logger.CLILogger, license *kotsv1beta1.License,
 		return nil, nil
 	}
 	if isAirgap {
-		if !canInstallFromChannel(preferredChannelSlug, license) {
-			return nil, errors.New("requested channel not found in supplied license")
+		if canInstallFromChannel(preferredChannelSlug, license) {
+			return license, nil
+		}
+		validChannels := []string{}
+		for _, channel := range license.Spec.Channels {
+			validChannels = append(validChannels, fmt.Sprintf("%s/%s", license.Spec.AppSlug, channel.ChannelSlug))
 		}
-		return license, nil
+		log.Errorf("Channel slug %q is not allowed by license. Please use one of the following: %s", preferredChannelSlug, strings.Join(validChannels, ", "))
+		return license, errors.New(fmt.Sprintf("channel slug %q is not allowed by license", preferredChannelSlug))
 	}
+
 	log.ActionWithSpinner("Checking for license update")
 	// we fetch the latest license to ensure that the license is up to date, before proceeding
 	updatedLicense, err := replicatedapp.GetLatestLicense(license, "")
@@ -53,8 +62,14 @@ func VerifyAndUpdateLicense(log *logger.CLILogger, license *kotsv1beta1.License,
 		return nil, errors.Wrap(err, "failed to get latest license")
 	}
 	log.FinishSpinner()
+
 	if canInstallFromChannel(preferredChannelSlug, updatedLicense.License) {
 		return updatedLicense.License, nil
 	}
-	return nil, errors.New("requested channel not found in latest license")
+	validChannels := []string{}
+	for _, channel := range license.Spec.Channels {
+		validChannels = append(validChannels, fmt.Sprintf("%s/%s", license.Spec.AppSlug, channel.ChannelSlug))
+	}
+	log.Errorf("Channel slug %q is not allowed by license. Please use one of the following: %s", preferredChannelSlug, strings.Join(validChannels, ", "))
+	return updatedLicense.License, errors.New(fmt.Sprintf("channel slug %q is not allowed by latest license", preferredChannelSlug))
 }