Vertical integration

Vertical integration is a business model in which one company owns multiple tiers of the cannabis supply chain — cultivation, processing or manufacturing, distribution, and retail — under common ownership, controlling product from seed to sale. Florida, Virginia, Delaware, and Alabama mandate vertical integration for certain medical license types. Washington State prohibits it outright under RCW 69.50.328, which bars producers and processors from any financial interest in licensed retailers, mirroring post-Prohibition alcohol "tied house" rules. Colorado ran a "70/30 rule" requiring retailers to grow most of what they sold until it was repealed in 2014. New York generally bars full vertical integration for adult-use licensees outside of microbusinesses and legacy Registered Organizations. Proponents argue integration improves product safety and simplifies seed-to-sale tracking; critics argue it favors well-capitalized MSOs and blocks small operators. Many states permit limited integration through microbusiness licenses while barring it at full scale. → See also: MSO, Microbusiness, License