In Colorado, we don't bar vertical integration on either the medical or recreational side. In fact, on the medical side we require vertical integration. Most often, the thing I hear about why you want to bar vertical integration is to prevent a monopoly situation and the growth of one or two major players.
I would argue, and I think it's what we're seeing, that this is an agricultural commodity with small profit margins. The natural economy of it is to push towards larger grows. I do think that whatever kind of system you set up, in the long term you're going to see larger and larger grows.
On the retail side I think there are a number of different ways you can limit somebody owning too many retail shops.