Small cannabis operators are better positioned to grow than the big multi-state operators, according to strategy consultant Mitch Osak, and the reason has less to do with how much money a company raises than with what it does with it. Osak made the case on Episode 222 of The Cannabis Accounting Podcast, hosted by Raymond Guns of DOPE CFO and released Aug. 11, 2026.
Osak is founder and president of Quanta Consulting in Toronto. He has worked in cannabis since 2016 and says he has advised more than 220 clients worldwide. Guns, a CPA, runs a firm whose core clients are cannabis companies doing $1 million to $20 million in revenue. All credit for the insights below goes to the two of them; the full conversation is worth the 49 minutes.
Why Are Smaller Operators Better Positioned To Grow?
Because focus beats sprawl. Osak said single-state and smaller operators in the $1 million to $20 million range are the ones best positioned to grow, and that Canada's market history backs that up. Guns said the same from his client roster: his most successful clients are not large MSOs but multi-location single-state operators that started strong in retail and moved backward into cultivation to build a profitable house brand, or the reverse.
Guns described the structural problem with the MSO model plainly. Cannabis is an agricultural business, a manufacturing business and a retail business at once, and a vertically integrated operator has to be good at all three. Most traditional companies only need to master one.
Is The Real Problem Capital Raised Or Capital Allocated?
Allocated. Osak's criticism of Canadian, U.S. and now German cannabis companies is not how much they raised or at what valuation, but what they did with the money. Early Canadian investors, he said, would refuse to fund a plan unless the greenhouse got bigger, so the only way to raise more was a more grandiose plan.
The result was predictable. Everyone chased the low-cost producer or biggest-brand slot, almost no one went after niches or focused on one or two provinces, and the market ended up with overcapacity and undifferentiated brands. Osak said that same mistake has shown up in every cannabis market he has worked in. Guns put the practical version simply: raise a lot, overbuild the facility, and your operating capital disappears.
Does Cannabis Get To Play By Different Rules?
Partly, but not on the books. Osak said cannabis is genuinely special, caught between consumer goods executives who ignore the regulations and pharma executives who ignore the legacy market. But he was blunt that it still has to be run like a real business, with cash flow, profit, governance and reporting. He called the industry too inward-looking, treating the plant like something above ordinary commercial rules.
Should U.S. Operators Chase Exports?
For most, not yet. Osak said export inquiries from U.S. companies have jumped since Schedule III and talk of possible DEA export waivers, and he often talks them out of it. International sales may be no more than 10% to 15% of revenue for many Canadian producers, he said, and Canada's whole market is roughly a $5 billion U.S. market. Meanwhile Texas, Virginia, New York and Florida offer bigger growth with no new supply chain to build.
For those who still want in, his fastest route is buying a Canadian licensed producer already exporting to Europe. Building EU GMP capability from scratch, he said, takes three to five years and a lot of capital. Guns added the cash-flow math: exports lengthen the cycle, orders get larger and buyers do not pay faster.
Is Big Alcohol Or Big Pharma About To Buy The Industry?
Not soon, by Osak's read. Big firms have already been burned, with Constellation Brands' Canopy Growth investment the clearest example, and they set capital budgets a year ahead, wait for regulatory clarity on interstate commerce and can afford to buy whoever they want whenever they choose. The one caveat: pharmaceutical companies could move in on the medical side if rescheduling to Schedule III is fully realized, since compliant medical operators start to look like pharma businesses.
What Should Operators And Managers Take From This?
Make the current footprint profitable before expanding it, and judge every new market, export deal or facility by return, not size. Guns' own shift mirrors that: as licenses got easier and capital got harder, the question became how to make existing operations work. Osak's advice for growth decisions is the classic toolkit any industry uses, return on investment, net present value and an honest strategic plan.
FAQ
Who Is Mitch Osak?
Osak is founder and president of Quanta Consulting, a Toronto-based cannabis strategy firm. He has worked in cannabis since 2016 and writes Cannabis Management Review, a free newsletter on Substack.
What Is DOPE CFO?
DOPE CFO is a cannabis accounting and finance firm. Raymond Guns hosts its weekly Cannabis Accounting Podcast.
How Long Does EU GMP Certification Take?
Osak estimates three to five years and significant capital for a company building it from scratch, which is why he favors acquiring a producer that already exports.
Listen to the full episode, EP 222: Why Small Cannabis Companies Are Beating The Big MSOs, on Apple Podcasts. Credit to host Raymond Guns of DOPE CFO and guest Mitch Osak of Quanta Consulting.