In May 2019, there were 4,400 reports of tornadoes, hail and high winds across the U.S. That’s the highest number of similar weather incidents on record since 2011. This increasing number of weather incidents has a huge effect on the cannabis industry, which has turned more frequently to outdoor cultivation since legalization.
While outdoor cultivation can develop the flavor of the cannabis crop, much like wine, it also brings with it some unique challenges. Each component of the weather – wind, rain, temperature – plays a role in whether a crop succeeds or fails. While conditions one year may easily lead to a bumper crop, the conditions the following year may not be as favorable. And as the weather becomes more volatile due to climate change, growers are ever more at risk, especially when they aren’t insured.
Unfortunately, traditional crop insurance isn’t available for outdoor cannabis cultivators, primarily because of a lack of data on yield performances – and the impact the weather has on yields. Insurance companies don’t create policies until they have the data to back the policy. But meanwhile, the growers are assuming all the risk.
Enter parametric insurance. Parametric insurance is a program that pays out after a certain parameter is met. In the case of cannabis growers, the parameters are weather-related. The policy is triggered when the weather varies from the average – if there is too much rain during a specific period of time, for example, or an occurrence of large hail. Because the policy is related to average weather, it has to be tailored to the specific growing region – which means the parameters for Colorado won’t be the same as a policy for Maine.
For cannabis crops, coverage can be created for the following parameters:
Rain (recorded in inches of rainfall over a period of time)
Wind (recorded in miles per hour)
Early freezing (using recorded temperatures)
Hail (measures intensity and size of the hail)
Drought (for non-irrigated plots)
Once a parameter has been set, the policy starts to pay out at the strike point, or the average measurement specified in the policy. Coverage continues to pay out until the exhaust point, or the entire limit of the coverage is paid out. It works well because it’s straightforward: The further away from the average, the more the likelihood of catastrophic loss.
Parametric insurance isn’t for everyone. It’s a program designed to fill gaps that exist within the traditional insurance system. Nor is it designed to stand alone. But it can protect outdoor cannabis cultivators from weather risks that are truly beyond their control, especially given the hardening property insurance market.
In addition, it works for two simple reasons:
Simplicity: Recorded weather events leave no room for ambiguity or dispute. You don’t even need an adjuster to guide the claims process. The official weather data proves what happened.
Correlation: There is a high degree of correlation between measurable weather events and potential damage to outdoor crops.
Parametric coverage is not widely available. Many insurance professionals may not even know of it. But with the property insurance market hardening and a growing need to protect you and your cannabis business from weather-related disaster, parametric coverage may be your best bet. Make sure you speak to a broker who knows about it.
It’s a different world growing cannabis in California- in fact, it’s a completely different experience than it was even four years ago. It can be overwhelming to begin the process, which is where an experienced cultivation consultant can help. This article will highlight 5 factors to keep in mind before you begin growing in California’s regulated recreational market.
Start Up – Costs, needs & endless variables
So you’ve decided to begin a recreational grow, here are the factors to consider before you get started.
Permitting, the necessary pre-cursor to cultivation, can be time- consuming, extremely expensive, and overwhelming. General experience dictates that any grow will take longer than planned and cost way more money than you ever expected or anticipated. Always account for more money and time than you think you need. Working with an experienced consultant can help you plan and account for all the costs and variables you may not have considered, prior to beginning cultivation, in order to ensure your success.
Equipment. When choosing what equipment to use, stick to reputable equipment manufacturers. Don’t just go with the latest high-tech gear because you see it on Instagram being advertised by a big, fancy grow operation. Stick to what you know best. Do your homework and research the equipment as much as possible, prior to purchase. Use equipment that has been tested and well documented with success. Some questions to ask yourself: is this necessary? Is it cost effective? Will it help me reach my goals?
Grow your business slowly and naturally. Getting too big too quick will most likely expose inefficiencies in your operating plan, which will be further compounded when production increases. Don’t sink before you can swim and start out on a massive scale before you have perfected your process.
Cultivation – It pays to design it right the first time
Success begins in the grow room. Never forget that. A properly engineered cultivation plan can be the difference between 3 and 6 harvests per year. Again, it is imperative here to do your homework. A well-thought-out plan can make or break you, and that is where an experienced cultivation consultant can help.
Set realistic expectations. Understand that growing boutique style cannabis is very difficult on a large scale, consistently. Don’t expect to grow perfect cannabis every time – it is unrealistic and can ultimately lead to failure if your financial model depends on it. Growing a plant, while mostly in your control, involves too many variables to rely on a perfect outcome round after round. You can do everything in your power, yet something unexpected can still happen and be detrimental to your yield, and therefore your profit. You must expect and plan for this.
Automating as much of your grow as possible is always a good idea. This will greatly reduce labor costs and more importantly, minimize human error. In some instances, it will even allow you to review data and information remotely, in real time, allowing you to ensure your cultivation site is always running as efficiently as possible, even when you aren’t there.
Processing – Don’t skimp on the process
If you are going to be harvesting cannabis for flower, it is imperative to have a properly built facility for drying, curing and storing your product. You must consider that this building will need to be large enough to house and properly store all of your harvest at once. This can make or break your crop at harvest time. If you don’t have the capacity to handle your harvest properly, it can lead to disastrous issues such as mold or too quick of a cure – conditions which make your cannabis unsellable in the regulated market.
Although costly, if done correctly, you can also design this area to serve as your propagation, trimming, and breeding areas, which will ultimately save on costs in the long run.
Also keep in mind, hand trimmed cannabis will always look more appealing to the consumer than machine trimmed cannabis. However, hand trimming can be time-consuming, labor-intensive, and therefore far more costly than machine trimming. These are factors you will need to consider and budget for when deciding how to proceed. If you use a machine, you may save money up front, but will you be able to sell your cannabis at full price?
Distribution – Have a plan
It is a good idea to have a plan for distribution, prior to start up. If you have an agreement with a retail outlet (or contract with a distributor) in writing, you will protect yourself from financial failure. Cannabis will never grow more valuable over time, therefore, you want to have a plan in place for distribution, as soon as the cannabis is harvested and processed. Just as was the case in the black-market days, you never want to hold on to your cannabis for long periods of time.
Do not distribute without agreements in writing! While some oral agreements may be enforceable, it will be extremely costly to litigate. Therefore, you should plan to hire a lawyer beforehand to create fail-proof agreements that will hold up in court, should a distributor not pay you for your product.
Sales – Build your brand, but be realistic
Building your brand is important. And if you don’t produce your own high-quality flower you cannot expect to have a product up to your standards. Your brand will not be successful if you cannot consistently provide consumers with high quality cannabis. Relying on other growers to produce your cannabis for you is risky to your brand. Even if you are a manufacturer, you may not be able to rely on other suppliers to maintain the quality volume you need in order to manufacture your products consistently.
The regulated market in California is new. Therefore you must necessarily account for a great degree of price fluctuations in the market. When creating your budget at the outset, you must account for fluctuations in profit. Knowing when prices are going to be at their lowest can help you avoid having an oversupply of inventory. It can also help you avoid such situations by planning your cultivation/harvest accordingly.
There are both consumer and government influenced market trends that can affect your bottom line. These must be accounted for at the outset.
On the consumer level, you must know what people are buying and how they are consuming. And these factors can change quickly with the introduction of new technology, methods or new devices intended for cannabis consumption. You must stay on top of these trends.
The government regulations can also affect these trends. Products used for cultivation can become banned, i.e. products you once relied on in your cultivation can be found to have contaminants known to cause test failures, even in “approved products.”
Ultimately, all of these factors can make or break your success, and therefore, must be considered, researched and accounted for prior to beginning your cultivation in the regulated market. Working with a consultant with over 20 years of grow experience, and more importantly, extensive experience in large scale cultivation in the regulated market, can help you achieve the success you desire. Cultivation in the regulated market is costly, but working with a consultant can help you cut costs at the outset, and save you from unexpected expenses in the long run.
Connoisseurs know that pairing a fine cut of steak with a Napa Valley cabernet sauvignon is a sure winner. But how many are aware that pairing strawberry cheesecake with a certified Santa Cruz Blue Dream cannabis strain creates an equally delicate palatal synergy? Thanks to the California Department of Food and Agriculture’s CalCannabis Appellations Project (“CAP”), premium cannabis regions will soon have the potential to capitalize on such newfound awareness among discerning consumers.
For decades, cannabis connoisseurs have been willing to pay a premium for flower said to have been grown in certain regions or with certain techniques, but because of cannabis’ legal status, supply chains have been opaque. As a result, cultivators of distinct cannabis strains struggled to capture the full market potential of their products. That has begun to shift with implementation of California’s Cannabis Track-and-Trace System. The costs associated with implementation of the METRC1 system have been bemoaned by many in the industry, but there is also tremendous potential value in having the most transparent supply chain in the world. The CalCannabis Appellations Project is the vehicle through which brands will be able to harness that value.
The underlying premise behind the CalCannabis Appellations Project is that the distinctive qualities of a cannabis product are often attributable to where and how the plant is grown. Through this project, CalCannabis is developing a statewide appellations system2 that will allow qualifying licensed cultivators to effectively communicate information about their cannabis crops (i.e., the standards, practices and/or varietals used) through labels, advertisements and other marketing techniques. It will also prevent disingenuous cannabis cultivators from making inaccurate claims about where and how a product is grown, which protects the integrity and value of the appellation.
What is an appellation?
In general terms, an appellation is an identifying name, title or label that can be legally defined and protected. Appellations are most commonly used in the wine industry to geographically identify the origin of grapes in a particular bottle. This place-based identification system comes from an understanding that certain regions have unique environmental and growing characteristics, which result in a product that cannot be produced from other regions even when the same varietals are used. Famous wine appellations or American Viticultural Areas (AVAs) in California include the Napa Valley and Santa Ynez AVAs, and sub-AVAs such as the Russian River Valley AVA, located within the larger Sonoma County AVA.
Recognizing there are also growing regions that produce uniquely distinctive cannabis, CalCannabis is developing a process for:
Establishing an appellation (i.e., identifying regions that produce distinctive cannabis and defining standards, practices and/or varietals that must be used in those regions to qualify for an appellation); and
Qualifying to use a particular appellation once they are established (i.e., determining the cannabis cultivators that can legally label or market themselves as belonging to a particular appellation).
While the state has not released program details, it’s likely that cultivators will have to demonstrate their outdoor-grown cannabis is distinctly unique.3 CalCannabis has until Jan. 21, 2021,4 to establish these processes, but a draft is expected to be released by early January 2020.5 This is an opportunity for cultivators to organize and participate in the process to define and create unique local appellations.
What are the benefits of an appellations system?
Appellations benefit both cannabis cultivators and consumers. It allows small farmers to capture the value that consumers place on unique and local cannabis products. Allowing for product differentiation through an appellations system will prevent cannabis from becoming a commodity—a situation that could result in indistinguishable products and a single market price for cannabis regardless of how or where it is grown. Thus, an appellations system protects not only local economies and farming communities, but also consumers that care about the origin and growing practices of their cannabis.
A criticism of appellations, particularly in the wine industry, is that they can disincentivize innovation and industry growth when strict growing practices and standards are required to be a part of an appellation. This will be an important consideration as CalCannabis establishes its appellations system.
County of Origin
In addition to setting up an appellations system, the CalCannabis Appellations Project will expand upon current county of origin regulations. Unlike an appellation designation, the county of origin designation is designed to be much more inclusive—it can currently be used on any cannabis product as long as 100% of the cannabis is grown within the designated county.6 Whereas an appellation will communicate information about the quality of a cannabis product and how it was produced, a county of origin designation is more like a “Made In” label. For example, a county of origin designation can be applied to indoor cannabis whereas an appellation will likely only include sun-grown cannabis.
There is also a desire to allow city of origin designations in addition to county of origin designations, which would enable products grown wholly within the political boundaries of a city to further differentiate themselves.7 As the legal cannabis landscape changes nationwide, it may also be important to have a statewide appellation allowing products to be marketed as “Grown in California.”
What should cannabis cultivation regions be doing now?
After CalCannabis releases a draft process for establishing an appellation, the next steps will be clarified. However, not everyone is waiting. For instance, growers in Mendocino County have already started to organize.8 The Mendocino Appellations Project divided the county into 11 unique subregions based on regional growing conditions and practices that could potentially be turned into appellations in the future. The goal of the appellations outlined by the Mendocino Appellations Project is to protect cannabis products coming out of Mendocino County and preserve the region’s growing heritage.
A group in Sonoma County is also discussing the establishment of appellations with the hope that it will help differentiate their cannabis and draw attention to the unique microclimate and soil structure in parts of Sonoma County.9 The groups involved in these discussions also believe it will allow cultivators to develop strict growing standards and to protect certain strains, while creating new jobs and encouraging agritourism. Appellations will become increasingly important as sophisticated consumers begin to select quality cannabis that aligns with their preferences.
METRC is the third-party-owned software contracted by California authorities to implement the commercial cannabis track-and-trace system “from seed-to-sale.”
Passage of Senate Bill 185 calls for the use of the term “appellations of origin” instead of “appellations.”
Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
Business and Professions Code Section 26063.
Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
Business and Professions Code Section 26063(a).
Based on comments made during the October 23 Cannabis Advisory Committee Meeting.
For years, tetrahydrocannabinol (THC) got all the attention. While THC certainly delivers its own benefits (such as relaxation and pain relief), there’s a whole host of other – and often overlooked – compounds found in cannabis with important benefits as well. THC is truly only the tip of the iceberg when it comes to cannabis’s potential.
As the cannabis industry evolves with changing consumer tastes and developing medical research, growers may employ techniques to boost cannabinoid and terpene profiles in their harvests – beyond merely focusing on THC. Advanced LEDs allow growers to elicit specific biological responses in cannabis crops, including increased concentrations of these naturally occurring chemical compounds.
The Foundation of Cannabis’s Effects Whether used medicinally or otherwise, cannabis has changed our society and many of our lives – and there’s a collection of naturally occurring chemical compounds, known as cannabinoids and terpenes, to thank.
The cannabinoids THC and CBD are the most common and well-researched, however they are accompanied by more than 200 additional compounds, including cannabinol (CBN), cannabigerol (CBG) and tetrahydrocannabivarin (THCV), among others.
The cannabis plant also contains terpenes. These structures are responsible for giving flowers (including cannabis), fruits and spices their distinctive flavors and aromas. Common terpenes include limonene, linalool, pinene and myrcene.
Both cannabinoids and terpenes are found in the cannabis plant’s glandular structures known as trichomes. Look closely, and you’ll notice trichomes coating the cannabis flowers and leaves, giving the plant an almost frosty appearance.
Trichomes – which are found across several plant species – are a key aspect of a cannabis plant’s survival. The specific combination of metabolites produced by trichomes may attract certain pollinators and repel plant-eating animals. Moreover, trichomes (and specifically THC) may act as the plant’s form of sunscreen and shield the plant from harmful ultraviolet rays.
While they play an essential part in the cannabis plant’s lifecycle, trichomes are volatile and easily influenced by a range of environmental factors, including light, heat, physical agitation and time. Therefore, environment is a defining variable in the development of these important structures.
How LEDs Support Cannabinoid and Terpene Development in Crops Spectrally tunable LEDs give indoor cannabis growers unparalleled control over their crops. As research has expanded about plants’ responses to the light spectrum, growers have discovered they are able to elicit certain physiological responses in the plant. This phenomenon is called photomorphogenesis. At its root, photomorphogenesis is a survival tactic – it’s how the plant responds to miniscule changes in its environment to increase the chances of reaching full maturity and, eventually, reproducing. While cultivated cannabis plants won’t reproduce at an indoor setting, growers can still use the light spectrum to encourage strong root and stem development, hasten the flowering process and the development of bigger, brightly colored flowers.
It makes sense that using the proper light spectrums may also have an impact on the production of specific cannabinoids and terpenes – an important factor when responding to highly specific consumer needs and desires, both within medical and adult-use markets.
Here are a few more reasons why utilizing full-spectrum LEDs can lead to higher quality cannabis:
Lower Heat, but the Same Intensity. When compared to HPS, fluorescent and other conventional lighting technologies, LEDs have a much lower heat output, but provide the same level of intensity (and often improved uniformity). This represents an enormous advantage for cannabis cultivators, as the lights can be hung much closer to the plant canopy without burning trichomes than they would be able to with other lighting technologies.
UV Light. Cannabinoids and terpenes are part of the cannabis plant’s natural defense mechanism, so it makes sense that lightly stressing plants can boost cannabinoid and terpene numbers. Some studies illustrate an increase in UV-B and UV-A light can lead to richer cannabinoid and terpene profiles.1 It’s a fine line to walk, though – too much UV can result in burned plants, which leads to a noticeable drop in cannabinoids.
Full-Spectrum Capabilities. The cannabis plant evolved over millions of years under the steady and reliable light of the sun. Full-spectrum is the closest thing to natural sunlight that growers will be able to find for indoor growing – and they’ve been shown to perform better in terms of cannabinoid development. A 2018 study titled “The Effect of Light Spectrum on the Morphology and Cannabinoid Content for Cannabis Sativa L.,” explored how an optimized light spectrum resulted in increased expression of cannabinoids CBG and THCV.2
This is the most important tip for indoor growers: your plants’ environment is everything. It can make or break a successful harvest. That means cultivators are responsible for ensuring the plants are kept in ideal conditions. Lights are certainly important at an indoor facility, but there are several other factors to consider that can affect your lights’ performance and the potency of your final product. This includes your temperature regulation, humidity, the density of plants within the space, CO2 concentration and many other variables. For the best results, your lights should be fully aligned with other environmental controls in your space. Nothing sabotages a once-promising crop like recurrent issues in the indoor environment.
Cannabinoids and terpenes take time to develop – so cultivators will want to avoid harvesting their plants too early. On the other hand, these compounds begin to degrade over time, so growers can’t wait too long either.
Cultivators seeking potent cannabinoid and terpene profiles must find a happy medium for the best results – and the best place to look is where cannabinoids and terpenes develop: the trichomes. With a microscope, cultivators can get up close and personal with these sparkly structures. Younger plants begin with clear trichomes, which eventually become opaque and change to amber. Once your plants show amber-hued trichomes, they’re ready for harvest.
The truth here is that there’s no perfect formula to elicit show-stopping cannabinoids and dizzying terpenes with every harvest. A lot of cannabis cultivation is based around trial-and-error, finding what works for your space, your business and your team. But understanding the basics around indoor environmental controls like lighting and temperature – and how they can affect the development of cannabinoids and terpenes – is an excellent place to start. Using high quality equipment, such as full-spectrum LED lighting can boost both cannabinoid and terpene production, resulting in richer, more potent and higher quality strains.
Lyndon, John, Teramura, Alan H., Coffman, Benjamin C. “UV-B Radiation Effects on Photosynthesis, Growth and Cannabinoid Production of Two Cannabis Sativa Chemotypes.” August 1987. Photochemistry and photobiology. Web. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1751-1097.1987.tb04757.x?&sid=nlm%3Apubmed
Magagnini G., Grassi G., Kotiranta, S. “The Effect of Light Spectrum on the Morphology and Cannabinoid Content of Cannabis sativa L.” 2018. Medical Cannabis and Cannabinoids. Web: https://www.karger.com/Article/FullText/489030
Tilray just did something very interesting. In addition to announcing that it was shipping product to German distributor Cannamedical via its Portuguese facility, it also announced that it had begun outdoor cultivation.
Even more intriguing: the company is claiming that somehow, via its proprietary technology (apparently), this kind of crop will be legit for distribution within the EU medical system.
There is only one problem with this. Outdoor growing does not sound remotely GMP-certified.
Here is the next bit of exciting news. Tilray, apparently, is not the only large Canadian cannabis company now operating in Europe that appears to be trying to get around GMP certifications for medical market penetration. Or appear oblivious to the distinctions in the international (and certainly European market).
And things are a bit smelly on that front, not only in Denmark post CannTrust, but in truth even in Germany, the supposed “Fort Knox” of regulatory consumer and pharmaceutical standards.
In fact, at least according to insiders, there is apparently quite a bit of gray market product sloshing around in the Teutonic medical market. Even though so far, at least not publicly punished for the same, nobody has been caught. Or at least publically reprimanded.
And who is on the hot seat at least according to most of the licensed if not just pre-licensed indie producers and distributors who were contacted for this story? Sure, there are dark horse “start-up” indie violators, but they are not the only problem. Many who talked to CIJ named big public Canadian companies too. And potentially Bedrocan beyond that.
Who Is Who And What Is What?
Part of the problem, beyond any kind of deliberate flouting of regulations on the part of many companies who are at least trying to understand them, is that global standards are different. “GMP certifications” of every country, even within a region like Europe, are in fact, not uniform. That is why, for example, the new EU-US MRA agreement had to be signed first regionally and then on a state-by-state level across the EU.
Beyond Germany of course, there are other problems that are coming to the fore.In the medical cannabis space, in particular, right now, that is causing problems simply because many with pharma experience are not hip to the many risks in the cannabis industry itself. On the Canadian, Australian and American side, there is also a lot of bad advice, in particular, coming from consultants who should know better.
To be properly EU and German GMP-certified, one of the required steps is to have German inspectors walk your production floor. It is also not good enough to have “pesticide-free” or national organic certification at the crop cultivation site, and add GMP cert at time of “processing.” That piece of misadvise has been showing up not only in Canada, but Australia too. And creates a nasty reality if not expensive retooling upon entering the legitimate market in Europe, for starters.
These Issues Affect Everyone In The Industry
In an environment where ex-im is the name of the game, and even the big guys are short of product, compliance is getting granular as smaller players step up to the plate – and many if not most hopeful Canadian producers (in particular) now looking to Europe for sales are not (yet) up to speed.
A big piece of the blame also lies in the lack of proper administration at the federal and state level too – even auf Deutschland. To get a distribution license, a company must actually get three licenses, although there are plenty in the market right now who begin to describe themselves as “distributors” with less than the required certs.
The lack of coordination and communication, including which certs to accept as equivalent and from where is creating a market where those who know how to game the system are.
For example, several people who contacted CIJ, claimed that uncertified product was making its way into Germany via Central and Latin America, through Canada, picking up “GMP cert” along the way. In other words, not actually GMP-certified but labelled fraudulently to make it appear that way.
The same claims were also made by those with on-the-ground industry knowledge in South Africa (Lesotho).
Beyond Germany of course, there are other problems that are coming to the fore. As CIJ recently learned, a firm authorized by the Dutch government to provide cannabis packaging, including for exports, was not GMP certified until July 2019 – meaning that all product they shipped internationally even within Europe before that date potentially has labelling issues. Cue domestic importers. If not regulators.
Grey Market Product Is Making Its Way In Through Official Channels
For those who are taking the time to actually get through the legal registration and licensing process, it is infuriating to see others who are apparently fairly flagrantly buying market position but are in no position to fulfil such obligations. It is even more infuriating for those who intend to meet the requirements of the regulations to realize that the vast amounts spent in consulting fees was actually money paid for inaccurate information.
And the only way ultimately the industry can combat that, is by standing up, as an industry, to face and address the problem.German distributors are so aware of the problem that they are starting to offer gap analysis and specific consulting services to help their import partners actually get compliant.
Government agencies also might be aware of the problems, but they have been reluctant to talk about the same. CIJ contacted both BfArM and the local Länderauthorities to ask about the outdoor grow in Portugal and the lack of GMP cert for a Dutch packager. After multiple run-arounds, including sending this reporter on a wild rabbit chase of federal and state agencies (who all directed us back to BfArm) and an implication by the press officer at BfArM that the foreign press was not used to talking to multiple sources, CIJ was redirected back to state authorities with a few more instructions on which bureau to contact. The state bureau (in Berlin) did not return comments to questions asked by email.
Here is the bottom line that CannTrust has helped expose this summer: the entire global cannabis industry is trying hard to legitimize. Not every company is shady, and there are many who are entering it now who are playing by the rules. But those who are hoping to exploit loopholes (including “name” if not “public” companies) are also clearly in the room.
And the only way ultimately the industry can combat that, is by standing up, as an industry, to face and address the problem.
Editors Note: This is a developing story. CIJ has been contacted by the Dutch Cannabis Agency as it investigates what appears to be an intra-government debate over qualification of EU-GMP cert, acceptance of audit documents and other matters within European countries that appear to have caused much of this confusion with regards to Bedrocan and its packager Fagron. Many reputable, licensed sources within the industry spoke to us on deep background, out of concern that they too would be held liable. That said, so far, nobody can explain why the only licensed Dutch packager, was issued a new EU GMP cert document on July 9, 2019, the same day that Danish authorities halted CannTrust product entering Denmark. That is a government decision. Further it is also still unclear why rival cannabis companies would attempt to contact the cannabis media with a certain (and misguided) spin on this situation.
The first article of this series discussed resource management for cannabis growers. In this second piece of the series on how indoor farming has a reduced impact on the environment, we’re going to look at land use & conservation. There are really two aspects and we have to be up front and acknowledge that while our focus is on legal cannabis farming, there’s a significant illegal industry which exists and is not subject to any environmental regulation.
“Streams in Mendocino run dry during the marijuana growing season impacting Coho salmon and steelhead trout who lay their eggs in the region’s waterways.” One biologist reported seeing “dead steelhead and Coho on a regular basis in late August and September, usually due to water reduction or elimination from extensive marijuana farming.” The quotes are from an extensive article on cannabis land use by Jessica Owley in the U.C. Davis Law Review.The concept that land will stay in its natural state is a mixture of idealism and reality.
This is going to continue until it’s more profitable to go legit. For this article, we’re going to focus on the legitimate cannabis grower. On the land use side, we usually hear four main reasons for indoor growing: remaining land can stay in its natural state, fewer space usually translates to fewer waste, you conserve land and natural resources when you don’t use fossil fuels, greenhouses can be placed anywhere.
The concept that land will stay in its natural state is a mixture of idealism and reality. Just because someone only has to farm five acres of land instead of one hundred acres doesn’t necessarily mean they’re going to leave the rest in its pristine natural state. Granted the footprint for automated greenhouses is significantly less but the key is what happens to that extra space. Assuming that it will all be preserved in its natural state isn’t realistic. What is realistic is the fact that a developer may not want to build tract houses abutting a commercial greenhouse operation. If they do, likely there’s going to be more land set aside for green space than if a farm was sold outright and a series of new homes were plunked down as if it were a Monopoly board.
Combined with workforce development program funding, urban indoor farming is getting more attractive every day.That’s not the same kind of issue in urban areas where the situation is different. Despite the economic boom of the past ten years, not every neighborhood benefitted. The smart ones took creative approaches. Gotham Greens started in Greenpoint, Brooklyn and has expanded to Chicago as well. “In early 2014, Gotham Greens opened its second greenhouse, located on the rooftop of Whole Foods Market’s flagship Brooklyn store, which was the first ever commercial scale greenhouse integrated into a supermarket.”
Green City Growers in Cleveland’s Central neighborhood is another example. “Situated on a 10-acre inner-city site that was once urban blight, the greenhouse—with 3.25 acres under glass–now serves as a vibrant anchor for the surrounding neighborhood.”
The beauty of greenhouse systems even those without greenhouse software, is they can be built anywhere because the environmental concerns of potentially contaminated soil don’t exist. The federal government as well as state and local governments offer a myriad of financial assistance programs to encourage growers to develop operations in their areas. Combined with workforce development program funding, urban indoor farming is getting more attractive every day.
As for the argument that greenhouses save energy and fossil fuels, I think we can agree that it’s pretty difficult to operate a thousand-acre farm using solar power. To their credit, last year John Deere unveiled a tractor that will allow farmers to run it as a fully autonomous vehicle to groom their fields while laying out and retracting the 1 kilometer long onboard extension cord along the way. It’s a start although I’ll admit to my own problems operating an electric mower without cutting the power cord.
In a 2017 article, Kurt Benke and Bruce Tomkins stated, “Transportation costs can be eliminated due to proximity to the consumer, all-year-round production can be programmed on a demand basis, and plant-growing conditions can be optimized to maximize yield by fine-tuning temperature, humidity, and lighting conditions. Indoor farming in a controlled environment also requires much less water than outdoor farming because there is recycling of gray water and less evaporation.”
The overall trend on fossil fuel reduction was verified this week when the Department of Energy announced that renewables passed coal for the first time in U.S. history. And on the water issue, Ms. Owley had a salient point for cannabis growers. “The federal government will not allow federal irrigation water to be used to grow marijuana anywhere, even in states where cultivation is legal.” That’s not a minor detail and it’s why outdoor farming of cannabis is going to be limited in areas where water resources and water rights are hotly debated.
Core values often get wrapped into buzzwords such as sustainability, locally sourced and organic. In the first part of a series of four articles exploring greenhouses and the environment, we’re going to take a look at indoor vs. outdoor farming in terms of resource management.
Full disclosure; I love the fact that I can eat fresh blueberries in February when my bushes outside are just sticks. Is there a better way to do it than trucking the berries from the farm to a distribution plant to the airport, where they’re flown from the airport to a distribution center, to the grocery store and finally to my kitchen table? That’s a lot of trucking and a lot of energy being wasted for my $3.99 pint of blueberries.The largest generation in the history of the country is demanding more locally grown, sustainable and organic food.
If those same blueberries were grown at a local greenhouse then trucked from the greenhouse directly to the grocery store, that would save diesel fuel and a lot of carbon emissions. People who can only afford to live near a highway, a port or an airport don’t need to ask a pulmonary specialist why their family has a higher rate of COPD than a family who lives on a cul-de-sac in the suburbs.
Fact: 55% of vegetables in the U.S. are grown under cover. The same energy saving principles apply to indoor cannabis and the reasons are consumer driven and producer driven. The largest generation in the history of the country is demanding more locally grown, sustainable and organic food. They want it for themselves and they want it for their kids.
The rapid proliferation of greenhouses over the past ten years is no coincidence. Millennials are forcing changes: organic fruit and vegetables now account for almost 15% of the produce market. A CNN poll last month revealed that 8 of 10 of registered Democrats listed climate change as a “very important” priority for presidential candidates. The issue is not party I.D.; the issue is that a large chunk of Americans are saying they’re worried about the direct and indirect impacts of climate change, such as increased flooding and wildfires.
So how does the consumer side tie into the cannabis industry? Consumers like doing business with companies who share their values. The hard part is balancing consumer values with investor values, which is why many indoor growers are turning to cultivation management platforms to help them satisfy both constituencies. They get the efficiency and they get to show their customers that they are good stewards of their environment. The goal is to catch things before it’s too late to save the plants. If you do that, you save the labor it costs to fix the problem, the labor and the expense of throwing away plants and you reduce pesticide and chemical usage. When that happens, your greenhouse makes more money and shows your customers you care about their values.
The indoor change is happening rapidly because people realize that technology is driving increased revenue while core consumer values are demanding less water waste, fewer pesticides, herbicides and fertilizers.Let’s add some more facts to the indoor-outdoor argument. According to an NCBI study of lettuce growing, “hydroponic lettuce production had an estimated water demand of 20 liters/kg, while conventional lettuce production had an estimated water demand of 250 liters/kg.” Even if the ratio is only 10:1, that’s a huge impact on a precious resource.
Looking at the pesticide issue, people often forget about the direct impact on people who farm. “Rates in the agricultural industry are the highest of any industrial sector and pesticide-related skin conditions represent between 15 and 25% of pesticide illness reports,” a 2016 article in The Journal of Cogent Medicine states. Given the recent reports about the chemicals in Roundup, do we even need to continue the conversation and talk about the effects of fertilizer?
I’ll finish up with a quote from a former grower. “The estimates I saw were in the range of between 25%-40% of produce being lost with outdoor farming while most greenhouse growers operate with a 10% loss ratio.”
The indoor change is happening rapidly because people realize that technology is driving increased revenue while core consumer values are demanding less water waste, fewer pesticides, herbicides and fertilizers. Lastly, most Americans simply have a moral aversion to seeing farms throw away food when so many other people are lined up at food banks.
This is not a discussion of climate change, it’s a discussion of the impact of weather on the agriculture industry. The question for the cannabis & hemp industry, and basically the entire specialty crop industry, is what will be the impact? According to the U.S. National Climate Assessment, “Climate disruptions to agriculture have been increasing and are projected to become more severe over this century.” I’m sure that’s not much of a shock to anyone who owns a farm, orchard or greenhouse.
Every national newspaper for the past two weeks has published at least one article a day about the flooding in the Midwest, while industry newsletters and blogs have contained more in-depth stories. The question is, what can agriculture professionals do to mitigate these problems?
Relying on state and national legislators, especially heading into a presidential election year is likely to be frustrating and unrewarding. Governments are excellent at reacting to disasters and not so good at preventing them. In short, if we depend on government to take the lead it’s going to be a long wait.Instead, many farmers are looking at the future costs of outdoor farming and concluding that it’s simply cheaper, more efficient and manageable to farm indoors.
Instead, many farmers are looking at the future costs of outdoor farming and concluding that it’s simply cheaper, more efficient and manageable to farm indoors. Gone are the days when people grew hemp and cannabis indoors in an effort to hide from the police. Pineapple Express was a funny movie but not realistic in today’s environment.
Today’s hemp and cannabis growers are every bit as tech savvy as any other consumer-oriented business and one could argue that given the age of their customers (Statista puts usage by 18-49-year-olds at 40%), distributors must be even more tech savvy to compete effectively. Some estimates put the current split of cultivation at about one-third indoors/two-thirds outdoors. To date, the indoor focus has been on efficiency, quality and basically waiting for regulators to allow shipping across state lines.
A major driver in the indoors/outdoors equation is that as the weather becomes more unfriendly and unpredictable, VC’s are factoring climate disruption into their financial projections. When corn prices drop because of export tariffs, politicians lift the ban on using Ethanol during the summer months. It’s going to be a while before we see vehicles running on a combination of gasoline and CBD.
Leaving aside the case that can be made for efficiency, quality control and tracking of crops, climate change alone is going to force many growers to reassess whether they want to move indoors. And, it’s certainly going to weigh heavily in the plans of growers who are about to launch a cannabis or hemp business. Recently, one investment banker put it to me this way: greenhouses are the ultimate hedge against the weather.
By Dr. Nadia Sabeh, Founder/President of Dr. Greenhouse
Controlling the environmental parameters of the indoor farm is essential to managing the productivity and health of your crop.
This presentation will discuss the critical roles that VPD, airflow, CO2, and other parameters play in the dynamic indoor environment, and we will review different systems and strategies you can use to manage them.
A project case study will be presented to demonstrate the costs associated with different climate management (HVAC) alternatives, including first cost, operating cost, maintenance, and crop productivity.
As the operations manager at Los Sueños Farms, the largest outdoor cannabis farm in the country, I was tasked with the challenge of finding a yeast and mold remediation treatment method that would ensure safe and healthy cannabis for all of our customers while complying with stringent regulations.
While outdoor cannabis is not inherently moldy, outdoor farms are vulnerable to changing weather conditions. Wind transports spores, which can cause mold. Each spore is a colony forming unit if plated at a lab, even if not germinated in the final product. In other words, perfectly good cannabis can easily fail microbial testing with the presence of benign spores.
If all of those landed on cannabis it would be enough to cause over 450 pounds of cannabis to fail testing, even if those spores remained ungerminated.
It should also be known that almost every food item purchased in a store goes through some type of remediation method to be considered safe for sale. Cannabis is finally becoming a legitimized industry and we will see regulations that make cannabis production look more like food production each year.
Regulations in Colorado (as well as Nevada and Canada) require cannabis to have a total yeast and mold count (TYMC) of ≤ 10,000 colony forming units per gram. We needed a TYMC treatment method that was safe, reliable, efficient and suitable for a large-scale operation. Our main problem was the presence of fungal spores, not living, growing mold.
Below is a short list of the pros and cons of each treatment method I compiled after two years of research:
Autoclave: This is the same technology used to sterilize tattoo needles and medical equipment. Autoclave uses heat and pressure to kill living things. While extremely effective, readily available and fiscally reasonable, this method is time-consuming and cannot treat large batches. It also utilizes moisture, which increases mold risk. The final product may experience decarboxylation and a change in color, taste and smell.
Dry Heat: Placing cannabis in dry heat is a very inexpensive method that is effective at reducing mold and yeast. However, it totally ruins product unless you plan to extract it.
Gamma Ray Radiation: By applying gamma ray radiation, microbial growth is reduced in plants without affecting potency. This is a very effective, fast and scalable method that doesn’t cause terpene loss or decarboxylation. However, it uses ionizing radiation that can create new chemical compounds not present before, some of which can be cancer-causing. The Department of Homeland Security will never allow U.S. cannabis farmers to use this method, as it relies on a radioactive isotope to create the gamma rays.
Gas Treatment: (Ozone, Propylene Oxide, Ethylene Oxide, Sulfur Dioxide) Treatment with gas is inexpensive, readily available and treats the entire product. Gas treatment is time consuming and must be handled carefully, as all of these gases are toxic to humans. Ozone is challenging to scale while PPO, EO and SO2 are very scalable. Gases require special facilities to apply and it’s important to note that gases such as PPO and EO are carcinogenic. These methods introduce chemicals to cannabis and can affect the end product by reducing terpenes, aroma and flavor.
Hydrogen Peroxide: Spraying cannabis plants with a hydrogen peroxide mixture can reduce yeast and mold. However, moisture is increased, which can cause otherwise benign spores to germinate. This method only treats the surface level of the plant and is not an effective remediation treatment. It also causes extreme oxidation, burning the cannabis and removing terpenes.
Microwave: This method is readily available for small-scale use and is non-chemical based and non-ionizing. However, it causes uneven heating, burning product, which is damaging to terpenes and greatly reduces quality. This method can also result in a loss of moisture. Microwave treatment is difficult to scale and is not optimal for large cultivators.
Radio Frequency: This method is organic, non-toxic, non-ionizing and non-chemical based. It is also scalable and effective; treatment time is very fast and it treats the entire product at once. There is no decarboxylation or potency loss with radio frequency treatment. Minimal moisture loss and terpene loss may result. This method has been proven by a decade of use in the food industry and will probably become the standard in large-scale treatment facilities.
Steam Treatment: Water vapor treatment is effective in other industries, scalable, organic and readily available. This method wets cannabis, introducing further mold risk, and only treats the product surface. It also uses heat, which can cause decarboxylation, and takes a long time to implement. This is not an effective method to reduce TYMC in cannabis, even though it works very well for other agricultural products
Extraction: Using supercritical gas such as butane, heptane, carbon dioxide or hexane in the cannabis extraction process is the only method of remediation approved by the Colorado Marijuana Enforcement Division and is guaranteed to kill almost everything. It’s also readily available and easy to access. However, this time-consuming method will change your final product into a concentrate instead of flower and usually constitutes a high profit loss.
UV Light: This is an inexpensive and readily available method that is limited in efficacy. UV light is only effective on certain organisms and does not work well for killing mold spores. It also only kills what the light is touching, unless ozone is captured from photolysis of oxygen near the UV lamp. It is time consuming and very difficult to scale.
After exhaustively testing and researching all treatment methods, we settled on radio frequency treatment as the best option. APEX, a radio frequency treatment machine created by Ziel, allowed us to treat 100 pounds of cannabis in an hour – a critical factor when harvesting 36,000 plants during the October harvest.
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