I issued the same bug.
Creating the file /etc/sysctl.d/90-override.conf with the input kernel.pid_max 
= 32768 solved the issue for me.
Thanks for the advice!

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https://bugs.launchpad.net/bugs/1888001

Title:
  Focal minimal cloud image: failed to apply kernel variables

Status in cloud-images:
  New
Status in linux package in Ubuntu:
  Confirmed

Bug description:
  Overview
  ---
  It appears the Focal minimal images have always shipped with a failing 
systemd unit: "systemd-sysctl.service" with the error "Couldn't write '4194304' 
to 'kernel/pid_max': Invalid argument"

  Expected results
  ---
  $ sudo systemctl list-units --failed --no-legend
  # Return no failed units

  Actual results
  ---
  $ sudo systemctl list-units --failed --no-legend
  systemd-sysctl.service loaded failed failed Apply Kernel Variables

  
  From the journal:
  Jul 20 12:18:53 ubuntu systemd[1]: systemd-sysctl.service: Main process exit
  ed, code=exited, status=1/FAILURE
  Jul 20 12:18:53 ubuntu systemd[1]: systemd-sysctl.service: Faile
  d with result 'exit-code'.
  Jul 20 12:18:53 ubuntu systemd[1]: Failed to start Apply Kernel Variables.

  Jul 20 12:18:53 ubuntu systemd-sysctl[135]: Couldn't write '4194304' to 'ker
  nel/pid_max': Invalid argument

  
  Steps to reproduce
  ---
  $ wget 
https://cloud-images.ubuntu.com/daily/server/minimal/releases/focal/release/ubuntu-20.04-minimal-cloudimg-amd64.img
  $ multipass launch file:///$(pwd)/ubuntu-20.04-minimal-cloudimg-amd64.img 
--name=focal-minimal
  $ multipass exec focal-minimal -- sudo systemctl list-units --failed 
--no-legend

  
  ---
  ProblemType: Bug
  AlsaDevices: Error: command ['ls', '-l', '/dev/snd/'] failed with exit code 
2: ls: cannot access '/dev/snd/': No such file or directory
  AplayDevices: Error: [Errno 2] No such file or directory: 'aplay'
  ApportVersion: 2.20.11-0ubuntu27.4
  Architecture: amd64
  ArecordDevices: Error: [Errno 2] No such file or directory: 'arecord'
  AudioDevicesInUse: Error: [Errno 2] No such file or directory: 'fuser'
  CRDA: N/A
  CasperMD5CheckResult: skip
  DistroRelease: Ubuntu 20.04
  IwConfig: Error: [Errno 2] No such file or directory: 'iwconfig'
  Lspci: Error: [Errno 2] No such file or directory: 'lspci'
  Lspci-vt: Error: [Errno 2] No such file or directory: 'lspci'
  Lsusb: Error: [Errno 2] No such file or directory: 'lsusb'
  Lsusb-t: Error: [Errno 2] No such file or directory: 'lsusb'
  Lsusb-v: Error: [Errno 2] No such file or directory: 'lsusb'
  MachineType: QEMU Standard PC (i440FX + PIIX, 1996)
  Package: linux (not installed)
  PciMultimedia:

  ProcEnviron:
   TERM=xterm
   PATH=(custom, no user)
   XDG_RUNTIME_DIR=<set>
   LANG=C.UTF-8
   SHELL=/bin/bash
  ProcFB:

  ProcKernelCmdLine: BOOT_IMAGE=/boot/vmlinuz-5.4.0-1018-kvm 
root=PARTUUID=4a94aad5-09c7-46a5-aa33-f2f2e03254e7 ro console=tty1 console=ttyS0
  ProcVersionSignature: User Name 5.4.0-1018.18-kvm 5.4.44
  RelatedPackageVersions:
   linux-restricted-modules-5.4.0-1018-kvm N/A
   linux-backports-modules-5.4.0-1018-kvm  N/A
   linux-firmware                          N/A
  RfKill: Error: [Errno 2] No such file or directory: 'rfkill'
  Tags:  focal uec-images
  Uname: Linux 5.4.0-1018-kvm x86_64
  UpgradeStatus: No upgrade log present (probably fresh install)
  UserGroups: adm audio cdrom dialout dip floppy lxd netdev plugdev sudo video
  _MarkForUpload: True
  dmi.bios.date: 04/01/2014
  dmi.bios.vendor: SeaBIOS
  dmi.bios.version: 1.10.2-1ubuntu1
  dmi.chassis.type: 1
  dmi.chassis.vendor: QEMU
  dmi.chassis.version: pc-i440fx-bionic
  dmi.modalias: 
dmi:bvnSeaBIOS:bvr1.10.2-1ubuntu1:bd04/01/2014:svnQEMU:pnStandardPC(i440FX+PIIX,1996):pvrpc-i440fx-bionic:cvnQEMU:ct1:cvrpc-i440fx-bionic:
  dmi.product.name: Standard PC (i440FX + PIIX, 1996)
  dmi.product.version: pc-i440fx-bionic
  dmi.sys.vendor: QEMU

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