Tag Archives: infrastructure

The Hopes of Illinois Social Equity Applicants

By Taneeshia Thomas
4 Comments

It is almost impossible to turn on the tv and not find a show or news conference or even live footage of an ongoing protest over “Black Lives Matter” or “Economic Equality.” The same situation exists with social media platforms, radio broadcast, etc. All sharing the common theme of social equity. While we all seek a solution, the state of Illinois is doing their part by awarding the coveted adult use cannabis business licenses for craft growing, infusion, transportation and dispensaries to social equity applicants by using a scoring system that favors the social equity applicant. We believe in this vision at TGC Group and our dream is to pay it forward.

Taneeshia Thomas and her husband, Christopher Lacy, who did 3.5 years in prison for growing cannabis in 2009.

We see the world, especially for minorities living in poverty, quite differently because of where we come from. “Black Lives Matter” is a movement to save the lives of all people and have human life viewed equally no matter the race of an individual. Economic equality is a totally different fight. Our communities that are impoverished need cash infusions. There needs to be financial infrastructure that recirculates the dollars from the poor communities and that comes from having business owners in the affected community to put their profits back into their community. There needs to be a system of lending that is not based on credit scores and criminal background checks because most people at the bottom will never qualify. An example would be my husband, Christopher Lacy: he went to prison for 3.5 years for growing cannabis back in 2009. He is not a violent man; he never even had a fight in prison. He spent much of his time in prison teaching inmates how to read, write and most importantly, he tried to teach them economics. He is educated about cannabis because he has been intimately involved with this plant and has been growing it for just about 20 years. Yet when he tried to apply for jobs in Illinois for growing cannabis, his invisible barrier starts with the resume. Just think about it, my husband, knows more about cannabis than most people in the industry today and could manage a facility with ease. No one could see his worth because of his background and work experience? This is the same situation with so many others in our poor communities. We know for a fact that there is hidden talent in the impoverished communities and prison system, and we intend to find it and empower these individuals to rebuild what was destroyed by the war on drugs. I speak for all the ghettos when I say this: give us access to the capital and we will get the rest done on our own. Conventional banks have their hands tied with this approach because they are regulated, but private funds have more flexibility. The excess capital needed to rebuild will not come from jobs, it only comes from ownership. Luckily, J.B. Pritzker and Toi Hutchinson are aware of this and hence created the social equity fund to help the social equity applicants fund their projects if and when they are awarded a license. We must find a way to give to the bottom so that the dollars can trickle up. Trickledown economics is kind of like that movie “Platform” on Netflix. There are never enough resources to get to the bottom because the people sending the resources down have no idea how to get them to the bottom floors of society. Trickle up economics can start at the very bottom rungs of society and still will reach to this highest level of the economic system because its built in such a way that it will inevitably get there.

State Sen. Toi Hutchinson (D-Park Forest), now The Illinois Cannabis Regulation Oversight Officer

These new licenses, literally pathways to financial freedom if operated correctly and efficiently, are revenue machines capable of changing our community. This change does not come from providing jobs (although jobs do help and will be available), but by providing capital to rebuild. These funds can provide scholarships, business loans, even small infrastructure projects can get accomplished via the tax revenue generated by the local governments. We have already made a written commitment to give a portion of net margins to the village. Capital in the right hands can make dreams come true. In theory, poverty can be solved. Poverty is not a prerequisite to the American way of life. That is why we were so proud to get zoning approval by our village. They see what we see. We can change neighborhoods like Beacon Hill. The dollars must recirculate in the community. Wherever you see high poverty rates you see high crime rates. This is not a coincidence. If you can lower the poverty rate you can lower the crime rates. This raises the quality of life for everyone. We see the state is on board, the county is on board, the Village of Park Forest is on board and the citizens of the community are on board. Now all we need is the license and capital to get the resurrection started.

Unlike other applicants, we were only capable of applying for one license for a craft grow facility. Some may see this as a disadvantage because only 40 licenses will be issued for this purpose. I wish we could have applied for more to increase our odds, but resources were scarce and applying was not cheap. We decided to stick with the efficient market theory and put all our eggs in the one basket that we know we can carry and be successful with. Without the help of Justice Grown, we would’ve never completed the application so shout out to them and anyone else that helped “true” social equity applicants apply.

The wheels are in motion so all we can do is wait to see who wins. I would hate to be on the team who must decide who wins these licenses. Everyone knows large corporations found ways to apply as social equity applicants because they only needed a certain number of “social equity” employees to qualify. But if you go ask the employees, not the owners, if they have been cured of their financial burdens and see if $15 has raised their quality of life to a middle-class level. The answer is emphatically NO. You cannot give out band-aids for heart attacks. If these large corporations are awarded the licenses, it will perpetuate the cycle of poverty. We do not personally have anything against the big companies. Like Toi Hutchinson said regarding the first round of dispensary and cultivation licenses: we needed the big company dollars to fund the next round of licenses. Well, the next round is here. Let’s do right by the communities that were truly affected by the war on drugs and on a more personal level and my reason for applying: let’s do right by my husband because he lost 3.5 years of his life and was excluded from participating with his family for doing what is now legal.

Why the Central Chiller Isn’t So Central to Grow Room HVAC

By Geoff Brown
2 Comments

There’s a better way to design HVAC for cannabis grow rooms, and it may seem a little odd at first.

Central chillers are a tried-and-true solution for projects requiring large refrigeration capacity. They’re found in college campuses, hospitals, office buildings and other big facilities.

While central chillers are a good default for most large-scale applications, they fall short in this industry. Grow rooms, with their need for tight, variable conditions and scalable, redundant infrastructure, have HVAC requirements that the central chiller model simply can’t deliver on.

Let’s unpack the shortcomings with the central chiller in this niche and explore some possible solutions.

What’s Wrong With Chillers?

Building a scalable HVAC system is essential for the cannabis industry as it continues to ramp up production in the U.S. and Canada.

Many growers are building their large facilities in phases. In Canada, this is common because growers must have two harvests before they can receive a production permit, so they build just one phase to satisfy this requirement and then build out the facility after the government’s approval.

This strategy of building out is less feasible with a central chiller.

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Indoor cultivator facilities use high powered lights that give off heat, requiring an efficient air cooling system.

A chiller and its supporting infrastructure are impractical to expand, which means it and the rest of the facility needs to be built to full size for day one, even though the facility will be in partial occupancy for a long time. This results in high upfront capital costs.

If the facility needs to expand later down the road, to meet market demand for example, that will be difficult because, as mentioned, it’s expensive to add capacity to a central chiller.

Additionally, the chiller creates a central point of failure for the facility. When it goes down, crops in every room are at risk of potentially devastating loss. Grow rooms are unusual because of their requirement for strict conditions and even a slight change could have big impact on the crop. Losing control due to mechanical failure could spell disaster.

One Southern Ontario cannabis grower met with some of these issues after constructing their facility, which uses a central chiller for cooling and dehumidification. The chiller was built for full size, but the results were disappointing as early as phase one of cultivation. While sensible demands in the space are being easily met, humidity levels are out of control – flowering rooms are up to 75% RH.

Humidity is one of the most important control aspects to growers. Without a handle on it, growers risk losing their entire crop either because there’s not enough and the plants dry out, or there’s too much and the plants get mold disease. This facility has fortunately not yet reported serious crop issues but is mindful of the potential impact on harvest quality.

By going unitary, capital costs scale on a linear basis.If tight control over humidity is what you need, then a chilled water system needs very careful consideration. That’s because typical chiller system designs get the coils cold enough to lower the air temperature, but not cold enough to condense water out of the air as effectively as a properly designed dehumidifier coil.

A chilled water system capable of achieving the coil temperatures needed for adequate dehumidification in a typical flower room will also require full-time reheat to ensure that air delivered to the plants isn’t shockingly cold — either stunting their growth or killing them altogether. This reheat source adds complexity, cost and inefficiency which does not serve growers well, many of whom are under pressure from both utilities and their management to minimize their energy usage.

How Do Unitary Systems Solve These Problems?

Compared to central chillers, a unitary setup is more agile.

A facility can commence with the minimum capacity it needs for start-up and then add more units in the future as required. They’re usually cheaper to install than a central system and offer several reliability and efficiency benefits as well.

The real business advantage to this approach is to open up the grower’s cash flow by spreading out their costs over time, rather than a large, immediate cost to construct the entire facility and chiller for day one. By going unitary, capital costs scale on a linear basis.

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One of the flowering rooms in an indoor set up (Image: Tall Trees LED Company)

Growers can have more control over their crop by installing multiple units to provide varying conditions, room-by-room, instead of a single system that can only provide one condition.

For example, flowering rooms that each have different strains of crop may require different conditions – so they can be served by their own unit to provide variability. Or, rooms that need uniform conditions could just be served by one common unit. The flexibility that growers can enjoy with this approach is nearly unlimited.

Some growers have opted for multiple units installed for the same room, which maximizes redundancy in case one unit fails.

A cannabis facility in the Montreal area went this direction when building their HVAC system. Rather than build everything in one shot, this facility selected a unitary design that had flowering rooms served independently by a series of units, while vegetation rooms shared one. The units were sized to provide more capacity than currently required in each room, which allows the grower to add more plants and lighting in the future if they choose.

This facility expects to build more grow rooms in a future phase, so it was important to have an intelligent system that could accommodate that by being easy to add capacity to. This is accomplished by simply adding more units.Multiple, small systems also have a better return-on-investment.

The grower, after making a significant investment in this facility, was also averse to the risk of losing crop due to mechanical failure, which is why they were happy to go with a system of independent grow room control.

Multiple, small systems also have a better return-on-investment. Not only are they easier to maintain (parts are easier to switch out and downtime for maintenance is minimal) but they can actually be more efficient than a large, central system.

Some units include heat recovery, which recycles the heat created by the dehumidification process to efficiently reheat the unit’s cold discharge air and keep the space temperature consistent, without needing expensive supplementary heaters. There’s also economizer cooling, which can be used to reduce or even eliminate compressor usage during winter by running the unit on dry outside air only.

Demand for cannabis continues to increase and many growers are looking to expand their businesses by adding new facilities or augmenting existing ones. Faced with the limitations of the traditional chiller system, like the lack of flexibility, scalability and redundancy, they’re looking for an intelligent alternative and the unitary approach is earning their trust. It’s expected this option will soon become the leading one across North America.

Seven Steps To Avoid the Green Rush Blues: Investigate Water Supplies Before Planting Cannabis

By Amy M. Steinfeld
2 Comments

A clean, reliable water supply lies at the heart of every successful cannabis farm. It’s no surprise that the stakes for finding land with ideal growing conditions, including adequate water, are high. But new buyers (and lessees) caught up in the green rush often gloss over water rights or are unaware of California’s byzantine rules governing the irrigation of cannabis.

Water rights are complex. Water regulations applicable to cannabis cultivation are even more complex. And our new climate reality convolutes things further. Longer droughts, more volatile weather, political uncertainties, increased groundwater regulation and water quality concerns are exacerbating tensions over local and statewide water supplies. In many areas of California, landowners can no longer rely on local water districts to meet their needs.

A robust investigation of the property must consider water supplies. Because a property’s water supply is dependent on water rights, local ordinances, state regulations, politics and hydrology, it’s important to consult a water lawyer (and in some instances a hydrologist) before closing. A bit of foresight can prevent a grower from being left high and dry.

The following checklist provides a roadmap to conduct water rights’ due diligence. While many of these details are California-specific, this type of due diligence applies throughout the West.

Step 1: Identify Available Water Supplies and Consider Potential Limitations On Irrigation, Including Potential Future Changes

Conduct a site visit to identify existing water infrastructure, natural water features and existing or potential water service options. Next, determine if the property is served by a public water supplier. If that’s the case, the California State Water Resources Control Board (“State Water Board”) does not require any specific documentation to irrigate cannabis, but the water supply must be disclosed in the CalCannabis license application.

Groundwater is generally the best supply for cannabis, but the era of unregulated groundwater pumping is over. Many groundwater basins in California are now governed by the Sustainable Groundwater Management Act (“SGMA”), which requires water agencies to halt overdraft and restore balanced levels of groundwater pumping from certain basins. As a result, SGMA may result in future pumping cutbacks or pumping assessments. It’s imperative to identify the local groundwater basin via the Department of Water Resources’ Bulletin 118, and determine whether the groundwater basin is adjudicated or governed by a groundwater sustainability agency. Growers should also test the local water supply’s pH and salt levels because cannabis plants are finicky and water treatment can be cost prohibitive. If a new well is needed, growers should consult with their local county before drilling a new well. In some areas, moratoriums and restrictions on drilling new wells are on the rise.

As a rule of thumb, cannabis cultivators should avoid using surface water to irrigate cannabis. Surface diversions are subject to the California Department of Fish and Wildlife’s permitting authority. And under the interim State Water Board Cannabis Policy, commercial cannabis cultivators cannot divert anysurface water during the dry season (April 1 through Oct. 31), even if they have a riparian right that can be used to irrigate other crops. During the dry season, cultivators may only irrigate using water that has been stored off-stream. And even during the wet season, cannabis cultivators must comply with instream flow requirements and check in with the state daily to ensure adequate water supplies are available. Cannabis cultivators are also required to install measuring devices and track surface water diversions daily. And buyer beware, a groundwater well that extracts water from a subterranean stream may be considered a surface-water diversion. So be especially cautious if the well is located close to a creek or river.Develop a water use plan to optimize water efficiency 

Step 2: Identify Water Supplies Used On the Property, Including the Basis of Right, and Quantify Historical Use

Review information on historic and existing water use. This may include past water bills and assessments. If there is a well on the property, the seller or lessor may have metering data, electrical records and crop data that can establish historic groundwater use. Cultivators must submit a well log to CalCannabis as part of the cannabis cultivation application. If surface water is available, the purchaser should review the State Water Board eWRIMs database for water rights permits, licenses, stock pond registrations and certificates, decisions and orders. The purchaser should also identify surface water diversion structures and review annual filings to determine compliance with all terms and conditions of the water right. Lastly, the purchaser should request all documents and contracts pertaining to water rights.

Realistically estimate water demand for irrigation and other on-site purposes.Step 3: Confirm Ownership of Right and Assess Any Limitations On Water Right

Determine whether the right has been abandoned, lost to prescription or forfeited. Evaluate the seniority of the water right, availability of the right, adequacy of place of use, purpose of use (must include irrigation), season of use, and quantity of any permitted or licensed post-1914 right. Determine whether historical diversions pursuant to an appropriative right support the full amount of the claimed right, and whether any changes to the water right are needed to support the proposed new use. Cultivators in California who plan to utilize surface water also need to file for a “Cannabis Small Irrigation Use Registration” to store water during the wet season for use during the dry season.

Step 4: Reconcile Water Demand With Available Supply

Realistically estimate water demand for irrigation and other on-site purposes. Develop a water use plan to optimize water efficiency (drip irrigation, rainwater harvesting, water monitoring, hoop structures) regardless of supply sufficiency. Many counties, such as Santa Barbara County, require that cannabis growers meet certain irrigation efficiency standards. Determine whether available supplies can meet all proposed demands, including plans for full buildout. If not, consider whether additional supplies are available for use on the property.

Step 5: Determine Water Supply Compliance Obligations

 The rights associated with water supplies are defined by their source, the time frame during which supplies can be taken, the quantity of water to which the right attaches, and any limitations on the purpose of use of the water supply. There may also be reporting requirements associated with taking and using the supply—these can include requirements to report the quantity of water used as well as information regarding the end use of the water. Failure to timely report can have serious consequences. Cannabis cultivators are also subject to additional water quality regulations and restrictions, including waste discharge requirements pursuant to the State Water Board’s Cannabis General Order.

Step 6: Negotiate Deal and Draft Conveyance Documents

After obtaining an understanding of the water supply associated with the property, the property conveyance documents may be drafted to incorporate the transfer of rights associated with the property’s water supplies. These may include the assignment of contracts pursuant to which water supplies are obtained, the transfer of permits or licenses as to the water supplies, or the transfer of water rights arising out of a judgment or decree.

Step 7: Consider Unused Water Supply Assets That Could Be Monetized 

To the extent the water supply rights associated with the property exceed the cannabis plants’ water demand, it may be possible to monetize unused or excess water supply assets through transfer of the rights to a third party.

If you have any questions about water rights related to cannabis cultivation it’s always in your best interest to contact an experienced water attorney early on in the process.

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CannaGrow Expo Heads to Palm Springs

By Aaron G. Biros
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canna grow

We’ve covered the CannaGrow Expo previously, but this time around we catch up with Joseph De Palma, founder of CannaGrow, to talk about the genesis of his conference and what makes the event so special. This year’s CannaGrow Expo heads to Palm Springs, California, a new location for the event, on May 19thand 20th.

We’ve watched De Palma’s conference grow over the years, moving around the country and becoming the tight-knit community we know it as today. The meat and potatoes of the show are definitely the educational sessions, panel discussions, roundtables and the expo hall. But covering it year after year we’ve noticed a real sense of community develop, one where genuine idea sharing, collaboration and inclusivity are preached. There are no dumb questions at the CannaGrow Expo.

Tom Lauerman speaks to a room full of attendees at CannaGrow San Diego

According to Joseph De Palma, CannaGrow started in 2014, when the original event was held in Denver. “From the beginning, we wanted to create an event specifically for growers, where the focus was always on education and ‘becoming a better grower’,” says De Palma. “We had experienced the existing events in the marketplace, and almost all fit into two categories at the time, festival, or generic tradeshow. Those were fine for their purpose, but they didn’t foster an environment of education, and that’s what we believed was most important to the emerging cannabis industry.” Back in 2014, their show only had 10 sessions and 30 exhibitors. “Passionate growers from around the country had 2 days of grow-focused sharing and learning, and you could see the energy and excitement,” De Palma says. “Discussions would dive deep, people made new friends, and it really elevated the conversation around cultivation.”

Attendees gather at a lighting exhibit at CannaGrow San Diego

Since the show’s debut, it’s grown substantially. The 7th CannaGrow Expo is fast approaching, and this upcoming conference has four separate tracks and roughly 100 exhibitors. But it still keeps its sense of community, one where you don’t feel crowded, where everyone has time to chat and network, without the overwhelming feeling that can come with larger trade shows. “That inclusivity and open dialog is built in,” says De Palma. “If you go to an event that’s tradeshow dominant, most people are there to walk, shop, and leave. At CannaGrow, growers and extractors come together with a plan for the weekend, remaining in a constant state of engagement with others at the show.”

This year’s show has some exciting additions to look out for. The agenda covers a wide range of topics, including everything from an introduction to growing with living soil to a discussion of cyber security. The Extraction Summit, new to this year’s event and held on Day 2, is their response to the massive rise in popularity and demand of extracts.

Eric Schlissel
Eric Schlissel, president and chief executive officer of GeekTek

Eric Schlissel, cybersecurity specialist, president and chief executive officer of GeekTek, is giving a talk focused on IT infrastructure. “My presentation will center around the actions cannabis businesses need to take right now to repel cybercrime and potential federal seizure,” says Schlissel. “As cannabis operators build their businesses and develop their security strategies, they often focus exclusively on the physical portion of their business – the merchandise and the cash in particular – and overlook the importance of designing and fortifying a secure IT infrastructure. I will discuss the importance of a holistic security strategy that embraces both and how you can both create one and prepare it for expansion into other states or even globally from the very start.” Schlissel’s discussion is one example of just how all-encompassing CannaGrow intends to be.

De Palma and his team leave few stones unturned as the show truly delivers vital information for cannabis cultivators in every area. Some things we are looking forward to? Seeing old friends and learning everything under the sun about cannabis science, growing and extraction. “People get to know each other, and with everyone sharing a core passion for cultivation and extraction, lifelong friendships are made,” says De Palma.


To check out the agenda, speakers and exhibitors, click here.