News of cannabis glut and falling wholesale prices has been dominating the airwaves of late, despite some recent reports showing that prices are remaining steady. As legalization continues to spread across the nation, the industry is poised to become commoditized, especially in those areas where it has been legal for a longer period of time. Whether specializing in retail cannabis products or industrial hemp, companies in the cannabis industry should be taking note of the sweeping economic implications of a maturing marketplace.
As is true in any industry, rapid growth and significant investments are sometimes followed by a slowdown (think dot-com, but less extreme). There are measures that companies can take in order to avoid negative outcomes, and a step in the right direction includes focusing on the bottom line and planning for future growth. Company leaders need to educate themselves on the competitive landscape and take the long view toward solutions for their operations.
Sounds easy enough, but how do we actually do this? One key step is to pay attention to overall expenses and create efficiencies wherever possible in order to remain competitive. This means that during the facility and systems design phase, all outcomes need to be taken into account. One of the most important – and cost conscious – things to consider is energy usage. Energy Star, the EPA-backed program for energy efficiency, says that facilities can “reduce their energy use by up to 30 percent through low or no-cost measures.” Generally, this means that efficiencies are built-in to the design with energy cost savings and sustainability in mind.
One of the largest energy outputs for a cannabis operation includes the facility’s HVAC and electrical systems. We have found that when clients step back to consider a range of alternatives, they have a more comprehensive base for this important decision. Considering outside factors, such as growth projections and specific goals, cannabis companies can make a more educated decision on the system that will provide the best economic outcome for their business. Often, those that plan ahead and look past the initial system cost, find longer term savings and lower energy usage over time.
As an example, we had a client looking to build an indoor cannabis cultivation operation. They had originally chosen to build their facility with high pressure sodium lighting to save money up front. Because this method of lighting typically has a lower first cost, it appeals to many companies that are starting out and wary of their budget. However, this particular client was poised for growth and looking to make sustainable choices that would impact their bottom line and meet their goals for environmentally sound business practices. We were able to create a model for them to illustrate the long-term benefits of installing LED lighting. This type of lighting allows growers to keep room temperatures higher, without compromising plant health with issues like tip burn. In addition, LED lights are more efficient and reduce the cooling load. This means mechanical systems were able to be downsized reducing first costs, and these systems also consumed less energy, reducing operational costs. Despite a higher first cost of the LED lights, the company ended up saving enough money in the reduced mechanical equipment size, as well as in the reduction of energy use from the lights and the mechanical equipment. The first costs between an HPS system and an LED system were much more comparable than originally expected, and they were able to keep their operational costs to an absolute minimum. This type of scenario has proven true over and over when models are built to show longer-term cost benefits for electrical and HVAC systems, using analysis from an experienced team of designers and engineers.
While the greater economic outlook for the cannabis industry is in flux, a thoughtful approach can help operations avoid negative outcomes. As more and more companies continue to enter the space, investments roll in and supply rises, we will all watch to see if demand will match this growth. Taking note of incremental methods for impacting the bottom line, such as smart HVAC and electrical system selection, can mean the difference between success and failure (and profit margins!) in this turbulent landscape.
With 33 states and the District of Columbia having passed laws legalizing marijuana in some form, cannabis cultivation is quickly becoming a booming new business across much of the US. From an energy standpoint, unfortunately, it’s not easy being “green”.
New Frontier Data’s 2018 Cannabis Energy Report found that legal cannabis cultivation in the US consumes approximately 1.1 million megawatt hours of electricity annually – enough to power 92,500 homes or a community the size of Newark, NJ, and accounts for carbon emissions equivalent to that of 92,600 cars. And that consumption is forecasted to increase 162 percent from 2017 to 2022. The report recommended that the industry “evaluate energy-efficient and renewable energy technologies” to nip this challenge in the bud.
Growers seeking to reduce their electricity usage through more efficient lighting face a confusing landscape of options, however. It can be difficult to know what will save electricity and work well for their operations. Technology is advancing quickly and questions abound, from how long a fixture will last and whether a manufacturer’s claims about efficacy are accurate to the effectiveness of various wavelengths for growing a particular plant.
Here’s the good news: there are reliable, third-party lighting and safety standards to help indoor growers make the leap from old-school lighting to state-of-the-art light-emitting diodes (LEDs) that use a fraction of the electricity and are increasingly effective for growing crops from cannabis to tomatoes. Here’s a closer look:
Most lighting fixtures in the North American market go through rigorous inspection by certified third-party testing labs. The first part of the check is for safety – an official UL safety standard tailored for the unique challenges of the greenhouse environment was recently released (UL 8800, the Standard for Horticultural Lighting Equipment and Systems). This standard and similar safety certifications at other major labs address wiring, environmental conditions, ingress protection and worker safety related to prolonged photobiological exposure to the eyes and skin. Growers should always ask a fixture manufacturer about safety certification specifically targeted for horticultural environments.
Next on the standards checklist for horticultural fixtures is performance testing. This often happens at the same labs that do safety testing, but is designed to verify efficacy, output, spectrum and other important performance variables. Commercial labs are certified for specific standards, so that a test on a fixture is repeatable at any other lab certified to the same standard. This performance testing results in a report summarizing items like photosynthetic photon flux (PPF), input power (watts), photosynthetic flux efficacy (PPE, measured in μmol/J or micromoles of photosynthetic photons per joule of electrical input power), and spectral content (flux per nanometer (nm) between 400 and 700 nm).
Then, there are flux maintenance standards (such as IES LM-80 and IES TM-21) that help make sure the photosynthetic light output of LED products degrades at an acceptable rate to make a grower’s investment worthwhile. The testing and calculation methods that go into these standards were painstakingly developed through a consensus of knowledgeable lighting stakeholders. A key difference between general lighting and plant lighting, however, is how flux maintenance is measured and benchmarked – the bar is significantly higher for plants compared to people since their metabolism and growth are dependent on the light spectrum and amount.
What’s described above just scratches the surface of the detailed testing used to determine and communicate performance features for commercial horticultural lighting fixtures. There’s a lot of important information to know, but it takes an informed reader to analyze this information and use it to select appropriate horticultural lighting. Our organization, the DesignLights Consortium (DLC), strives to make the vetting process easier for everyone, freeing up growers to focus on their core business.
In the early days of LED lighting, electric utilities had to compare these different lighting factors and reports to inform their energy efficiency rebate/incentive programs. The DLC was founded to fill this need, serving as a central clearinghouse for setting energy efficiency and other product performance minimum standards, and to evaluate products against those standards. Then and now, lighting products that pass review qualify for an online qualified products list (QPL) that utilities use to quickly and accurately incentivize high-performing products.
With its new minimum performance standards for horticultural light fixtures, the DLC seeks to accelerate the adoption of new energy-saving LED fixtures in controlled agriculture environments. To be on the new DLC Horticultural QPL, an LED fixture must be at least 10 percent more efficacious than the best non-LED alternative – a 1,000-watt double-ended high-pressure sodium (HPS) fixture. It also must have a Q90 of 36,000 hours (the number of hours before the photon flux output depreciates to 90 percent), and its driver and fan (if included) must have a rated life of at least 50,000 hours.
Most importantly, every product is listed online in a searchable, filterable database to help growers and facility designers quickly narrow their options. For example, in a retrofit, a grower might know what PPF is needed from each fixture but might also need to stay within a power budget to avoid rewiring circuits. The DLC’s Horticultural QPL can be filtered to quickly find and compare conforming products.
When a new technology is introduced, there is always uncertainty about how to optimally apply it. The horticultural world is no different. We look forward to research supporting additional predictive metrics that allow us to take advantage of the full benefits of high-performance LED and controls technologies. In the meantime, the established standards described here allow for energy efficient and safe cultivation facilities where growers can confidently produce more with less.
RoHS 3 (EU Directive 2015/863) adds a catch-all “Category 11” of regulated products that includes electronic nicotine delivery systems (ENDS), e-cigarettes, cannabis vaporizers and vape pens. This category becomes effective July 22, 2019. The most significant restricted substance applicable to this category is lead, and RoHS requires regulated products to contain less than 1000 parts per million (ppm). This follows on the heels of California’s new 2019 regulations requiring the testing of contents of cannabis vape cartridges using even stricter limits for lead (which makes sense because it applies to the product being consumed, not the separate electronic components). These regulations may seem unrelated, but anecdotally there have been widespread reports of higher than expected lead content in China-sourced electronic components, including both cartridges and related electronics. Whether metal used in e-cigarette type products is the source of any lead in the actual nicotine, cannabis or other concentrated product is an entirely different topic, but new laws, and in particular the new RoHS catch-all category, make 2019 an important year for any company responsible for certifying or testing lead levels in e-cigarette or vape products.
Background on EU RoHS
RoHS (Restriction of Hazardous Substances) originated in the EU in 2003 as a restriction on hazardous substances in specified categories of electronics and electronic products. Other countries have passed laws styled after RoHS, but only the EU RoHS is addressed here. Unlike some environmental laws, RoHS is not only focused on the safety of products during their life cycle of consumer use, but is designed to keep restricted substances out of landfills and recycling centers.
The original RoHS restricted the use of lead, cadmium, mercury, hexavalent chromium, PBB and PBDE. RoHS now restricts the use of a total of ten substances after the EU added four types of phthalates to its restricted substance list. Compliance with RoHS became a requirement for the use of the CE mark in 2011, and replaced a RoHS compliant mark on restricted products.
RoHS specified categories for regulation include large household appliances, small household appliances, computer equipment, lighting, power tools, toys, certain medical devices, control equipment (smoke alarms, thermostats and their industrial equivalents), and ATM machines. Newly added Category 11, the “catch all” category, includes all other electronic and electrical equipment not covered in the previous categories, including electronic nicotine delivery systems, cannabis vaporizers and vape pens.
RoHS Lead Exemptions Complicate Compliance
RoHS provides numerous exceptions to its strict 1000ppm lead standard that are slated to expire in phases from 2021 through 2024. Most Category 11 exceptions will not expire until 2024. For example, RoHS permits different levels of lead for lead in glass and ceramics, lead in high temperature solders, and lead in copper and aluminum alloys. So, an e-cigarette may contain some parts that are held to the highest level of lead restriction, it may but contain isolated components that (at least through 2024) are held to more permissive standards. While this leeway may reduce manufacturing costs for certain components, it creates greater complexity in testing. Anecdotal reports suggest that especially for products that compete heavily on price, sourcing from lesser-known Chinese foundries has resulted in unpredictable lead levels.
Take Away Points
As vape and e-cigarette companies compete with new features and design elements each year, and companies rely on new manufacturers, keeping up with regulations has proven to be difficult for both U.S. and for EU regulated products. For example, a company has to comply with numerous regulations regarding the oil or concentrate that will ultimately be inhaled by a consumer, and with regulations like RoHS that regulate parts a consumer may never touch or see. Each year, some company comes out with a new set of electronic features that may interact with newly formulated oils or concentrates, other companies compete for features or price points, making these products a moving target when it comes to testing.
Adding lead to many metals makes them easier to work with and therefore cheaper. Anecdotal reports suggest that especially for products that compete heavily on price, sourcing from lesser-known Chinese foundries has resulted in unpredictable lead levels. This can be the result of any number of causes: changes in sub-contractors, uses of industrial equipment for other products that permit higher lead content, or simply unscrupulous management that is willing to risk a contract to save money manufacturing a batch of components. There is speculation that some lead may leach into oil or concentrates in e-cigarette and vape products from the contact between the oil or concentrate and internal heating elements in certain type of products. RoHS compliance with regard to lead levels may reduce the chance of inadvertent lead contamination by such means, and compliance may therefore yield benefits on several regulatory fronts.
Compliance with RoHS for each part of an e-cigarette or vape therefore requires knowing your supplier for each component, but given increased regulation of these products (both the hardware and consumable elements) this can only help compliance with regulations in every relevant jurisdiction.
No matter the size of your cannabis greenhouse operation, keeping your plants alive and healthy requires the best possible growing environment. This means greenhouse managers and personnel must frequently monitor the status of environmental conditions and equipment. The sooner someone discovers extreme temperature fluctuations, rising humidity or equipment failure, the more inventory you can save.
That’s why integrating a remote monitoring system into your greenhouse operation can save you time, money and anxiety. Monitoring systems that use cloud-based technology let you see real-time status of all monitored conditions and receive alerts right on your mobile device.
Installing a monitoring system and sensors can be easier than you might think. Here are answers to ten questions to ask before installing a cloud-based monitoring system:
What is required to use a remote monitoring system?
Most remote monitoring systems require an internet or WiFi connection and access to an electrical outlet. Programming is done through a website, so it’s easiest to use a computer for the initial setup. If you don’t have an internet connection at your location, you’ll want to choose a cellular system. Make sure that there’s sufficient signal strength at your site, and check the signal quality in the area before purchasing a cellular device.
2. How do we determine what kind of monitoring system and sensors we need?
A reputable manufacturer will have a well-trained support team that can assess your needs even without a site visit to determine which products are best for your application. If you feel you need them to check out your greenhouse operation,many companies can set up a video conference or FaceTime chat to substitute for being on site.
You will want to provide details about the scope and purpose of your cannabis growing operation. Important factors to discuss include:
Skeletal structure of the greenhouse (metal, plastic, wood, etc.) and the covering material (glass or plastic).
Floor space square footage and height of each of your greenhouses.
Number of greenhouse structures in your operation.
Outdoor climate to determine if you rely more on heating or air conditioning and the level of humidity control needed.
Space dedicated to phases of growth (cloning and propagation, vegetative, flowering) and the microclimates needed for each.
Types of lighting, ventilation and irrigation systems.
Level of technological automation versus manual operation in place.
The monitoring system representative will then determine the type of system that would best serve your operation, the number of base units you will need and the types of sensors required.
The representative should also be able to provide tips on the placement of the sensors you’re purchasing. For example, to ensure thorough air temperature coverage, place sensors throughout the greenhouse, next to the thermostat controlling the room temperature and in the center of the greenhouse out of direct sunlight.
Note that there shouldn’t be a cost for a demo, consultation or assistance throughout the sales process. Be sure to ask if there are any fees or licenses to keep using the monitoring equipment after you purchase it.
3. Are sensors included with the monitoring system?
In most cases, sensors are sold separately. The sensors you select depend upon the conditions you want to monitor and how many you can connect to your base unit. Certainly, temperature is critical, but there are many other factors to deal with as well, such as humidity, CO2, soil moisture, water pH, power and equipment failure, ventilation and physical security.
For example, humidity has a direct impact on the photosynthesis and transpiration of plants. High humidity can also cause disease and promote the growth of harmful mold, algae and mildew. Sensors can detect changes in humidity levels.
Like any other plant, cannabis needs CO2 to thrive, so it’s a good idea to include a CO2 sensor that will signal to the monitoring device when readings go out of the preset range. There are even sensors that you can place in the soil to measure moisture content to help prevent over- or underwatering, budget water usage costs, promote growth and increase crop yield and quality.
Of course, all the critical systems in your growing facility—from water pumps to irrigation lines to louvers—rely on electrical power. A power outage monitoring sensor detects power failure. It can also monitor equipment for conditions that predict if a problem is looming, such as power fluctuations that occur at specific times.
Ventilation systems not only help control temperature, they also provide fresh air that is critical to plant health. Automated systems include features like vented roofs, side vents and forced fans. Sensors placed on all these systems will send personnel an alert if they stop running or operate outside of preset parameters.
To monitor the physical security of your greenhouses, you can add sensors to entrance doors, windows, supply rooms and equipment sheds. During off hours, when no staff is on duty, you can remain vigilant and be alerted to any unauthorized entry into your facility.
4. Do monitoring systems only work with the manufacturer’s sensors?
Not necessarily. For example, certain monitoring units can connect with most 4-20mA sensors and transmitters regardless of the brand. When selecting sensors, you might have a choice between ones that are designed by the manufacturer to work specifically with the monitoring system or universal components made by a third party. If the components aren’t made by the system manufacturer, you’ll want to find out if they have been tested with the monitor you are choosing and if you need to work with another vendor to purchase the parts.
5. Is a monitoring system easy to set up, or do we need to hire an electrician?
Many monitoring systems are quick and easy to install, and users can often set them up without hiring an outside expert. Look for one that requires only a few simple physical installation steps. For example:
Mount the device to the wall or somewhere secure;
Plug it into an electrical outlet and an internet connection;
Connect the sensors.
You connect the sensors to the base unit’s terminal strip using wire, which is included with many sensors. The range of many wired sensors can be extended up to 2,000 feet away from the base unit by adding wire that can be easily purchased at any home store. It’s a good idea to hire an electrician if you need to run wires through walls or ceilings.
Usually, once you plug in the device and connect the sensors, you then create an account on the manufacturer’s designated website and begin using your device. There should be no fee to create an account and use the site.
If the manufacturer doesn’t offer installation services, ask if they can recommend a local representative in your area who can set up your system. If not, make sure they provide free technical support via phone or email to walk you through the installation and answer any questions you might have about programming and daily usage.
6. Is there a monthly fee to access all the functionality of a monitoring device?
Many web- or cloud-based systems provide free functionality with some limitations. You might have to purchase a premium subscription to unlock features such as text messaging, phone call alerts and unlimited data logging access.
7. Should we get a system that is wired or wireless? Will we need to have a phone line, cable, internet or something else?
Wireless can mean two different things as it relates to monitoring: how the system communicates its data to the outside world and how the sensors communicate with the system.
The most popular systems require an internet or WiFi connection, but if that’s not an option, cellular- and phone-based systems are available.
A hardwired monitoring system connects the sensors to the base device with wires. A wireless system uses built-in radio transmitters to communicate with the base unit. Some monitoring systems can accommodate a combination of hardwired and wireless sensors.
8. Can one system monitor several sensor inputs around the clock?
Once the monitoring system is installed and programmed, it will constantly read the information from the sensors 24/7. Cloud-based systems have data logging capabilities and store limitless amounts of information that you can view from any internet-connected device via a website or app.
If the system detects any sensor readings outside of the preset range, it will send an alarm to all designated personnel. The number of sensors a base unit can monitor varies. Make sure to evaluate your needs and to select one that can accommodate your present situation and future growth.
When a monitoring system identifies a change in status, it immediately sends alerts to people on your contact list. If you don’t want all your personnel to receive notifications at the same time, some devices can be programmed to send alerts in a tiered fashion or on a schedule. Multiple communications methods like phone, email and text provide extra assurance that you’ll get the alert. It’s a good idea to check the number of people the system can reach and if the system automatically cycles through the contact list until someone responds. Some systems allow for flexible scheduling, so that off-duty personnel don’t receive alerts.
9. Do monitoring systems have a back-up power system that will ensure the alarming function still works if the power goes out or if someone disconnects the power?
The safest choice is a cloud-based system that comes with a built-in battery backup that will last for hours in the event of a power failure. Cloud-based units constantly communicate a signal to the cloud to validate its online status. If the communication link is interrupted—for example by a power outage or an employee accidently switching off the unit—the system generates an alarm indicating that the internet connection is lost or that there is a cellular communications problem. Users are alerted about the disruption through phone, text or email. All data collected during this time will be stored in the device and will be uploaded to the cloud when the internet connection is restored.
If you opt for a cloud-based monitoring system, make sure the infrastructure used to create the cloud platform is monitored 24/7 by the manufacturer’s team. Ask if they have multiple backups across the country to ensure the system is never down.
10. What should we expect if we need technical support or repairs to the system?
Purchase your system from a reputable manufacturer that provides a warranty and offers full repair services in the event the product stops working as it should. Also, research to make sure their tech support team is knowledgeable and willing to walk you through any questions you have about your monitoring system. Often, support specialists can diagnose and correct unit setup and programming issues over the phone.
It helps to record your observations regarding the problem, so the tech team can look for trends and circumstances concerning the issue and better diagnose the problem. Ideally, the manufacturer can provide loaner units if your problem requires mailing the device to their facility for repair.
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