Tag Archives: artificial intelligence

Soapbox

The Stress of a Grower

By Carl Silverberg
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Tell me that you can’t relate to this story.

You’re sitting down to dinner at a restaurant about ten minutes from where you work, finally relaxing after a tough day. You’ve set your environmental alerts on your plants; you have that peace of mind that the technology promised and you know that if anything goes wrong you’ll get notified immediately. As you’re looking at the menu, you receive an alert telling you that the temperature in one of your 2,000 square foot grow rooms has gone out of the safe range. Your mind starts to race, “It’s week seven, I’ve got 500 plants one week away from harvest, that’s 200 pounds of cannabis worth about $150,000-$200,000. Oh my God, what am I going to do?”

You’re doing all this at the dinner table and even though you’re not in a state of panic, you are extremely concerned. You need to figure out what’s going on. You check the graphing and see that over the past hour your humidity dropped and your temperature is gradually going up. Within the past ten minutes, the temperature has gone to 90 degrees. Your numbers tell you that the temperature in the room with $200,000 of cannabis is going up about five degrees every three minutes.

adamJgrow
Monitoring a large grow room can be a stressful task.

“I see this trend and can’t figure it out,” the grower relates. “Normally, the HVAC kicks on and I’d begin to see a downward trend on the graphs. I pre-set my trigger for 90 degrees. But, I’m not seeing that. What I AM seeing is the temperature gradually and consistently getting warmer without the bounce-back that I would expect once the HVAC trigger was hit. All I know is I better find out what’s causing all this and I better find out fast or my entire crop is gone.”

You go through the rest of the checklist from LUNA and you see that the lights are still on. Now, you’re starting to sweat because if the temperature in that room hits 130 and stays there for more than twenty minutes, you’re losing your entire crop. You have to walk in your boss’s office the next day and explain why, after all the time and money you put in over the past seven weeks, not only is all that money gone but so is the $200,000 he is counting on to pay salaries, expenses, and bank loans.

This is something you’ve been working on for seven straight weeks and if you don’t make the right decision, really quickly, when that room hits 130 degrees here’s what happens.

“My equipment starts to fail,” our grower continues. “The crop literally burns as the oils dry up and the crop is worthless. At 130 degrees, my grow lights essentially start to melt. All you can think of is that temperature going up five degrees every three minutes and you’re ten minutes from your facility. I need to leave that restaurant right now, immediately, because even if I get there in ten minutes the temperature is going to be almost 120 degrees while I’ve been sitting here trying to figure out what’s wrong.”

You run out to your car and you speed back to the facility. The grow room is now 125 degrees, you have maybe three or four minutes left to figure things out before you flush $200,000 down the drain. The first thing you do is turn off the grow lights because that’s your primary source of heat. Then, you check your HVAC panel and you realize it malfunctioned and shorted out. There’s the problem.

The real toll is the human cost. Once this happens, no grower ever wants to leave and go home or even go to dinner. It’s a horrible toll. It’s the hidden cost we don’t talk about. The grower opens up with his own personal experience.“This system allows the grower to step back and still feel confident because you’re not leaving your facility to another person,” 

“You think about the burden on the person that you bring in to replace you while you’re out of town and then you think about the burden on you if something goes wrong again. And you decide, it’s not worth it. The anxiety, the fear that it will happen again, it’s not worth it. So, you don’t go. I didn’t even see my sister’s new baby for eight months.”

Your desire to see your family, your desire to have a normal life; all of that goes out the window because of your desire to be successful in your job. It outweighs everything.

This is every grower. It’s why many farmers never leave their property. It just becomes a normal way of living. You just repeat it so much that you don’t even think about it. Why go on vacation if your stress level is higher than it is if you’re home. You’re constantly worried about your farm or your facility. The only way to escape it is to not go away at all.

“This system allows the grower to step back and still feel confident because you’re not leaving your facility to another person,” he tells us. “You don’t realize how stressful a lifestyle you live is until you step back and look at it. Or, if you have an alert system that allows you to pull back. That’s when you realize how difficult your life is. Otherwise, it just seems normal.”

As AI technology expands its footprint into agriculture, there will be more tools to help mediate situations like this; more tools to give you a more normal life. It’s one of the reasons we got into the business in the first place.

Marguerite Arnold
Soapbox

Paradox or Paragon? A Non-Techie Look at Blockchain, Cryptocurrency & Cannabis: Part I

By Marguerite Arnold
2 Comments
Marguerite Arnold

Disclaimer: Marguerite Arnold has just raised the first funds for her blockchain-based company, MedPayRx in Germany (and via traditional investment funding, not an ICO). She will also be speaking about the impact of blockchain on the cannabis industry in Berlin in April at the International Cannabis Business Conference.


You have probably heard of cryptocurrencies, tokens and smart contracts. You might have also heard, even if you did not understand the significance, that IBM recently suggested that the Canadian government use their form of blockchain, called Hyperledger, to track the recreational cannabusiness. Or that a large LP called Aurora is also looking at this space (as are other licensed producers large and small). Or maybe you have seen an item in the mainstream news about an ICO for a cannabis company that is now also going terribly wrong.

What on earth is going on?

These are all related issues, even if highly confusing and disjointed. Blockchain technology and cryptocurrency are hot right now and getting hotter – both in the mainstream world and in the cannabis industry globally. But for all its fans, the drumbeat for caution is also growing louder the more mainstream this technology (and the legitimate cannabis industry) becomes.

The many problems the entire cannabis vertical has with banking has make this current development almost inevitableOn the technology and finance side, that is why so many big names right now are urging caution. Nouriel Roubini, professor at NYU’s Stern School of Business, is just the latest to do so – and for reasons that everything to do with history. Including recent history ten years ago, when the world stood on the brink of a financial disaster thanks to unchained derivatives. The biggest worry in fact, right now, is about the financial implications of widespread adoption of the technology, beyond the tech itself and how it may (and may not) be legitimately used. Which itself is a huge question.

So why all the fuss?

This is revolutionary technology which is also being introduced into the market at a time when decentralized processing for automation is on the horizon. But also because blockchain can be used to create tokens or digital coins that act like financial instruments. And once created, such tokens can be issued much like money or even stock, to raise additional funds – for both start-ups and ongoing enterprises. The best thing though? This technology was invented to create a decentralized form of value exchange and trust-less, anonymized auditing and verification. No traditional financial institutions or even governments needed, wanted or should apply (at least in theory).

The many problems the entire cannabis vertical has with banking has make this current development almost inevitable. Not to mention accessing investment cash (although this is certainly changing outside the United States). Compliance issues in every direction are another wrinkle this tech will help solve. Starting with tracking product but also rapidly expanding to uses including protecting users’ privacy and facilitating access to high-quality, inspected product for qualified users and buyers. Not to mention other areas that are literally space-age but coming fast. Look for cool stuff coming soon involving both AI (artificial intelligence) and IoT (internet of things).

It is a fascinating, complex space. However, one aspect of this world, in particular, Initial Coin Offerings – or ICOs are getting attention right now. Why? They can be an incredibly efficient way to raise money for companies – both ones currently in business and start-ups with little more than a whitepaper or business plan and perhaps a working prototype. More and more of the successful ICOs are, however, for an existing company or are even attached to an asset, including a license, a prototype or a fund of money (or other combinations). They also rely on blockchain and alternative currency or tokens (sometimes also referred to as smart contracts) to work.

From a technology perspective, you can “mint” new coins relatively easily these days, sourced from a variety of different kinds of blockchain. Or even combinations thereof. You also can issue tokens or altcoins without an ICO.

In a world where there is vastly expanding cannabis opportunity, and many of these hopeful entrepreneurs are both digitally astute but without access to traditional capital, what could be better?

bitcoin
Bitcoin quickly became one of the more popular cryptocurrencies

From a financial and investor perspective, ICOs are a hybrid form of an IPO meets social media. “Coins,” “tokens” and “smart contracts” –or cyber currency collectively– are digital forms of cash, contracts, membership cards, discounts or even authorizations for identity. There are many ways tokens can be used, in other words. This by way of saying there are also important differences too. Not all tokens are the same. Not all are used as “money.” Some are but have assets assigned to them (like real estate). Others, particularly smart contract tokens, are strictly functional (pay funds when product is delivered and verified). The one caveat here is that the exchange of any token or altcoin will also cost money. Why? It is the electricity cost of computer processing the request for transfer. Plus access and service fees. There is no such thing as a “free” token. How tokens are priced, sold, bought, maintain value and for what purposes, is a debate if not process function that will not be solved anytime soon. Starting with the fact that some blockchains are more energy efficient (and sourced from green energy) than others.

To add to all of this confusion, not all ICOs function the same way. Some do give investors ownership in the company or specific portfolios that even include real-world assets. Others offer to use pooled funds to buy assets (like real estate or an expensive license). Many rely on the “coin” issued as a kind of discount scheme, reward mechanism and in many cases, direct discounted payment for future goods and services, of both the digital and real world kind. Many offer banking services directly, including in the very near future, the ability to exchange cyber cash for the fiat variety at even remote ATMs. Sound futuristic? It is coming and soon.

Most ICOs in the market now, however, rely on the following supposition: Issue a token with a unique name. Put up an ICO website. Encourage investors from anyplace on the planet with an internet connection, to use either crypto or fiat currency to buy tokens in the issuing startup as an investment that will give the new company funds to operate and build out services or the application (whatever that is). Also, plan to use the tokens for an exchange of some kind in the future (either for other coins or a good or service). Watch the value of the coin increase (for whatever reason) while informing investors (or contributors) that this is not really a security but a “utility” token that is expected but not guaranteed to become more valuable. Retire early with the prospect of having brokers of expensive real estate in places like London and Dubai come calling.The public tide of opinion, even if regulations are slow to move, is on the side of reform if not outright advocacy.

That will not be the case for the vast majority of ICOs, however, no matter what returns, goods or services they offer. Even if they also have vibrant communities already using their services (whatever those are). It will not be the case for most of the cryptocurrencies upon which such ICOs are based (most at the moment are based on Ethereum, NEO, Hyperledger or combinations of the three). There will be more of those too. And not every blockchain will make it (cryptocurrencies and tokens are based on an origin protocol or blockchain much like computer operating systems are either PC or Mac or mobile phones are Android or Apple). Some speak to one another well. Most do not “exchange” easily – even between themselves – let alone back into good old cash. And while nobody wants to be the Betamax of blockchain, there will, inevitably, be quite a few of them. When that happens, any economic value of the coins and even contractual relationships created with them disappear as well. Add in extreme price volatility in the current market pricing of these tokens, and you begin to get a sense of the risk profile involved in all of this.

The real hurdle, not to mention expense, comes when transferring back from the world of crypto to the one of fiat (regular money). Being a Bitcoin billionaire (there are about 1,000 individuals who own about 40% of the entire global Bitcoin issuance) is no fun if you have no place to spend it.

A Rapidly Changing Marketplace

In the past 18 months, cryptocurrency and ICOs have gotten increasing attention because of the increasing value of all kinds of cyber currency (far beyond Bitcoin). The total market cap for all forms of cryptocurrency itself zoomed past $700 billion at the turn of the year. That is impossible to ignore. You might have heard of some of these currencies too. There is ETH, Litecoin, Bitcoin Cash, Dash, even Dogecoin (created originally as a joke on an internet dog meme). Right now, in fact, at some of the most expansive exchanges, there are literally hundreds of these coins which are constantly bought and sold if not exchanged and used.

paragon advertisement
This has red flags written all over it.

And then there are the sums ICOs are bringing in some cases, flagrantly flaunting regulatory agencies and doing end runs on the global banking system that cannot keep up with them. The top ICO of 2017, a company called Block.one and registered in the Cayman Islands, so far holds the record at $700 million and counting. Filecoin, the second largest ICO last year, raised $262 million in one month from August to September. And then, of course, there is the cannabis industry-specific case of Paragon – now headed for class-action lawsuit litigation over their $70 million pre-and ICO sale intentions.

It would be logical to assume, given the eye-watering sums potentially involved not to mention the large role a smart digital media footprint has to do with an ICO’s success, beyond its service or technology offerings, that this would be a perfect place for cannapreneurs to turn for funding. The global market is opening for cannabis reform at the same time the crypto craze meets Fintech Upheaval is occurring – in fact, these two things are happening almost simultaneously.

Thanks to regulatory realities and an ongoing stigma, there is still no institutional investment in the industry in the United States (that is rapidly changing other places). These are two new industries and dreams are large.

In the legit cannabis space, so are the expenses.

The price of opening a dispensary in most U.S. states tops a million dollars right now. In Europe, the price of entry is even more expensive. A GMP compliant grow facility in Western Europe, plus the money for lawyer’s fees and negotiations for the license itself will set you back anywhere from $20 million and up, depending on the location. Even staying afloat in the industry once the doors are opened is a challenge. And loans, even for outstanding invoices, are still tough to come by in an industry where banking services of the simple business account kind are a challenge. Particularly in the United States.

The public tide of opinion, even if regulations are slow to move, is on the side of reform if not outright advocacy. Why shouldn’t a reform-group-rooted ICO aspire to own or provide ongoing business financing to a community-minded canna farm in California, Canada, Germany, Israel or Australia? Or even Greece?

However, right now, with some noted exceptions, the cannabis business remains at minimum, a dangerous place to consider issuing altcoins that act like financial instruments or raise money with them. Why and how?

Part II of this series will look at the significant liabilities of using cryptocurrency and ICOs in the cannabis industry.