# Vertical Integration Isn't Strategy — It's a Trap

Cannabis runs six or seven businesses at once, in multiple states, every supply chain locked to one state. Most of it is solved next door.

- Author: Bryan Fields (human written, not AI generated)
- Published: 2025-09-22
- Canonical: https://www.dimepodcast.com/newsletter/vertical-integration-isnt-strategy-its-a-trap
- Episode: [Strategy Truths & Lies, Mature Industries Already Know ft. Mitchell Osak](https://www.dimepodcast.com/episodes/strategy-truths-lies-mature-industries-already-know-ft-mitchell-osak) with Mitchell Osak
- Audio: https://afp-901980-injected.calisto.simplecastaudio.com/583052dc-8161-4a60-8c68-f486c33c8be9/episodes/3b9fe28d-3482-4355-8548-e74349a99648/audio/128/default.mp3?aid=rss_feed&awCollectionId=583052dc-8161-4a60-8c68-f486c33c8be9&awEpisodeId=3b9fe28d-3482-4355-8548-e74349a99648&feed=Vnrz0StH
- Topics: [MSOs & Multi-State Operators](https://www.dimepodcast.com/topics/msos-and-multi-state-operators), [Supply Chain & Distribution](https://www.dimepodcast.com/topics/supply-chain-and-distribution), [Branding & Marketing](https://www.dimepodcast.com/topics/branding-and-marketing)
- Originally published: https://www.linkedin.com/pulse/vertical-integration-isnt-strategy-its-trap-the-dime-podcast-zs0je

When you strip it down, cannabis is trying to do something no other industry has done: run six or seven different businesses at once — and do it in multiple states.

Even harder: the unique benefits that *should* come from vertical integration. There are a ton. But none of them truly replicate here because every supply chain is locked to a single state.

No surprise it feels chaotic.

For a while, with limited competition in new markets, being average was enough. [Yeah — maybe you don't have real visibility into extraction performance (hint: you should)](https://www.newton-insights.com/benchmark), but you've got a Google Sheet feeding another Google Sheet.

This industry is littered with unnecessary, unique challenges — and some are self-inflicted.

Most of the operational problems have been solved in adjacent industries:

- **Dispensary →** CPG/Retail
- **Cultivation →** Big Ag
- **Extraction →** Oil & Gas

The parallels aren't 1:1 — they never are. But the thought process transfers, and best practices often come through the right partner — someone who's spent 25 years advising those adjacent industries and has seen how mature categories scale, standardize, and survive — and how cannabis keeps repeating the same mistakes.

Mitchell Osak is that partner, and this week we sat down to share ideas for the industry.

**Here are a few insights that stood out:**

- **Stop chasing the wrong metrics.** For years it was "cost to grow." Some MSOs are dusting off that same flawed playbook. Consistency and quality — not shaving pennies — drive margins and pricing power.
- **Clarity beats chaos.** Too many operators don't know their "superpower." Mid-size firms win by focusing relentlessly on what they do best (cultivation, extraction, brands) while giants dilute themselves chasing everything.
- **Borrow playbooks from outside.** Wine, fashion, and tech point to where cannabis is headed: consolidation + boutique craft, faster product cycles, and CapEx-heavy innovation. The signals are there if you look beyond the echo chamber.
- **Get real about TAM.** The biggest lie in cannabis? Total Addressable Market slides. Reality arrives slower, smaller, and with brutal price compression — plan accordingly.

The recurring theme of the last few weeks continues:

**What got cannabis here won't get it to the next level.**

Survival depends on strategic thinking — not just cutting costs.

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