In an industry that has evolved at breakneck speed, cannabis operators are constantly navigating shifting regulations, fluctuating market demands, and the challenge of maintaining profitability. The remnants of the early-stage cannabis industry are still very much felt today, with some growers struggling to achieve or sustain profitability in a market dominated by large companies, while smaller growers try hard to stand out as beacons of craft and quality. One could argue that one of those remnants is the focus on capacity over actual market demand. Ian Miller from Catalyst BC recalls an early moment of realization in the cannabis sector: "In the public markets, value was based on capacity—how much could be grown—not on the quality of the product or whether people even wanted to purchase it or would purchase it at any price. That disconnect created major problems globally, including in the capital markets."
Leif Olsen from Catalyst BC echoes the same sentiment, noting that many companies failed to appreciate the actual size of their market early on. "In Canada, growers were producing six to ten times more cannabis than the consumers worldwide were consuming. It was clear that right-sizing and optimizing facilities from the outset—phasing growth, avoiding unnecessary scope and scale CapEx costs—was essential to long-term sustainability."
An industry with no room for mistakes
Catalyst BC works closely with global corporations, independent operators, social equity ventures, and both startup and mature cannabis businesses to accelerate market entry, optimize yields, sales, consumer loyalty, and profitability, and achieve the best Net Enterprise Value (NEV) for the Investor Class. They have seen many cannabis operations, not only in the US but globally, which has granted them a better understanding of the nuances, complexities, and dynamics at play in the cannabis market. "We help businesses build well-functioning systems that ensure operating expenses stay at the lowest reasonable level without compromising quality, consistency, or other desirable outcomes," Ian explains.
Leif adds that facility design is a crucial component. "So much comes down to avoiding design flaws that create bottlenecks—workflow constraints, post-harvest missteps, improper engineering, failing to meet environmental requirements necessary to achieve projected yields. These constraints can cripple an operation before it even starts."
"Who do I want to be when I grow up?"
Cannabis consumers have evolved alongside the industry, and understanding what they want is critical. Ian draws a parallel to the craft beer movement: "People are willing to spend money on products that offer real value beyond just getting high. They care about flavor, aroma, and all those unique things that proper cannabis embodies. Some want hand-trimmed flower, solventless hash, or unique cultivars."
However, the industry isn't just about craft connoisseurs. "There's always demand for products that are cheap and effective," Ian continues. "It's like the vodka market—some people want a premium product, and some just want something that gets the job done. Successful operators understand both ends of that spectrum. Thus, operators need to ask themselves: "Who am I now?" and "Who do I want to be when I grow up?""
Big plans, unrealistic expectations
Cash flow issues remain one of the biggest hurdles for new operators. "Most cannabis businesses weren't properly capitalized at the start," Ian points out. "Ask any of them if they underestimated how much money they needed, and most will say yes. Unrealistic expectations are a recurring theme in this space."
Catalyst BC takes a meticulous approach to financial planning, using rigorous models to predict cash flow. "We can predict how a market will evolve over time," Ian says. "New York, for example, is one of the toughest environments for an indoor cultivator. If you can't hit 70 grams per square foot out the gate, you won't survive. Those who don't understand the numbers are setting themselves up for failure."
Mastery of different elements
Beyond financials, Catalyst BC places a strong emphasis on horticultural science. "Math matters. Chemistry matters. Physics matters. Horticulture matters," Ian stresses. "We're at a point where sophisticated mastery of these elements is critical."
Leif highlights the importance of plant health: "It all starts with healthy plants. Data doesn't lie. We aim for optimal plant health, which means aligning growers, executives, and investors around a shared vision. Too often, executives take a grower's word for it without having a way to verify results. That leads to major problems."
The details matter, from avoiding cloning mistakes that lead to weak plant vigor to ensuring proper post-harvest handling. "We've seen operators unknowingly ruin their crops post-harvest because they didn't understand environmental requirements," Leif says. "Cannabis isn't a cucumber—you can't treat it like one."
For Catalyst BC, success comes from a practical, science-and-data-driven approach. "The industry is getting more serious," Ian says. "If you don't bring science and financial literacy into your operation, you're going to hit a ceiling. There are incredible growers out there who can hit over 100 grams per square foot on a small scale, without all the complexity, but replicating that at scale is a different challenge entirely."
Leif concludes, "Whether you're a micro grower or a mid-sized operator, understanding your market, positioning, and production capabilities is critical. When the facility is designed properly, you should consistently hit those numbers. It's all about planning to win, not just hoping to survive." If you are an owner, operator, executive, lender, or investor in the industry and want to maximize your returns—whether that means achieving top-tier yields (80-120 grams per square foot), strong profit margins, brand loyalty, and/or maximizing enterprise value at exit—we are here to assist you. If you are facing challenges in meeting financial or operational targets at the cultivation, extraction/processing/manufacturing, or retail levels, let's talk. Our value creation strategies often make our services pay for themselves for most clients, and we always offer a complimentary initial consultation."
For more information:
Catalyst BC
501 S. Cherry St, Suite 1100, Denver CO 80246
(USA) 303-305-3787
info@catalyst-bc.com
catalyst-bc.com