'This Isn't A Short-Term Fix': Inside Cannabis Companies' Push For Efficiency And Growth

Jesse Redmond, head of cannabis research at Water Tower Research, shared his perspective during his recent participation at the Benzinga Cannabis Capital Conference, emphasizing the strategic shift many cannabis companies are making toward efficiency. Redmond explained that this year has marked what he calls the “year of the core,” where companies are focused on cutting costs and optimizing their most productive assets to achieve long-term sustainability.

Redmond pointed out that the process is not a one-time adjustment but an ongoing commitment to operating smarter. “It’s not just about cutting expenses,” Redmond explained. “We’re becoming leaner and more efficient while still expanding mindfully.”

The “Year of the Core” Strategy

The strategy, as described by Redmond, reflects a deeper evolution within the cannabis industry. Companies are tightening operations and reassessing their core assets, focusing on balancing cost-cutting with the desire to grow. “This isn’t a short-term fix,” Redmond emphasized, adding that the approach is part of a broader effort to align with investors' expectations while maintaining operational integrity.

In his discussions at the conference, Redmond revealed that his team at Water Tower Research has been actively engaging with operators and investors to facilitate this shift. “Over the last two days, we’ve had 14 meetings with operators and around six or seven investor meetings,” he noted, indicating that the industry’s focus on efficiency resonates with stakeholders on both sides.

Operators and Investors Aligned on Efficiency

The alignment between operators and investors around this strategy is clear. Operators are working to maximize productivity while investors seek transparency in financials and growth potential. Redmond's role at Water Tower Research bridges the gap between these two sides, helping both groups adapt to the rapidly changing cannabis industry.

Redmond’s key message was that the cannabis industry's current climate demands financial discipline and thoughtful expansion. “It’s an evolution, not just cost-cutting,” he reiterated, stressing the importance of mindful growth in the “Year of the Core.”

This shift toward efficiency will likely define the strategic direction of cannabis companies in the coming years as they work to strengthen their place in the market while staying nimble and competitive.

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Jesse Redmond, head of cannabis research at Water Tower Research, speaks at the Benzinga Cannabis Capital Conference. Photo by Wendy Davis.