Cannabis is a unique product, but successfully and profitably growing it is very much a business. To succeed and achieve maximum profitability, your operation has to be efficient. As an owner, you need to plan carefully, budget appropriately, and rely on experts for guidance. This is especially true for growing cannabis indoors.
Professional growers realize that growing in a 20,000-square-foot warehouse or greenhouse is not the same as growing in your father’s basement. I advise growers who are starting out to take a long-term, rather than a short-term approach. This means talking to experts — lots of them.
I also recommend that growers at all levels carefully consider the following steps to develop a sound business plan and to make sure their cannabis growing operation gets off on the right foot.
Select the Right Cannabis Strain to Grow for Your Market — Then Specialize
Depending on where your operation is located, there are different regulations for growing. For instance, some states may regulate the operation by plant count or canopy space. This affects the operation.
Different cannabis strains also require different growing techniques and equipment. The best operations bridge the gap between cannabis and horticultural growing. Find a good cannabis-growing expert, as well as an experienced horticultural grower who knows how to grow the crop efficiently, to give you advice.
Finally, look around and find a good niche market that will set your product apart. That’s where the real money is.
Expect the Unexpected in Budgeting
Many people think they can start out on a shoestring budget, but in my experience of more than 20 years in this business, that never seems to work out. It takes more money than you may expect for a startup. If you’re growing 20,000 square feet, you have to be willing to spend a couple million dollars. To do something properly always costs more up front, but it saves money in the long-run.
Consider the use of automated equipment versus manual labor. Many people think it is cheaper at first to pay for manual labor, but labor is a constant, ongoing cost (and usually the most expensive cost) in the operation. If you’re in it for the long haul, you’ll realize that while the up-front cost of automated equipment is more, you’ll save money over time when you don’t need as many workers.
Similarly, I’ve seen cannabis operations purchase cheap equipment, and then have to spend even more money shortly after on more dependable, professional-grade replacements.
Find a Location That Works
Not all growing locations are created equal. Many areas have numerous regulations regarding cannabis production, security, utility use, renovations, and much more. It’s imperative to understand how these regulations can affect your operation. When you look long-term, you need to make sure you will have enough power, gas, water rights, etc., when you are ready to expand.
Selecting the right building can be complicated, so reach out to appropriate local real estate and regulation experts for help. If you’re looking into an existing building, you may want to have a structural engineer check it out and an electrical engineer (to ensure you get the amperage needed).
I prefer building new to renovating an existing building, simply because it is usually cheaper to build new than to renovate later. However, if you do select an existing building, make sure that it is large enough for future expansion and renovating up front, if possible. For instance, you may have a long-term plan to grow in 200,000 square feet, but you want to start out at 20,000 or 40,000 square feet to get established.
Talk to Experts, Experts, and More Experts
My company provides turnkey facilities that are developed by a very experienced team. When I work with new growers, I often ask them if they want a Honda Civic operation, a Porsche operation, or a Maserati operation, because each has different options depending on the budget. I tell them to be open-minded and talk to as many experts and vendors as possible, so they know what they want and what they can get for their money.
The best thing you can do as a grower and/or owner is to find good experts you can trust, such as electrical and structural engineers, horticultural growers, lighting experts, pest and disease experts, benching experts, and management experts.
Professionalize Your Operation
Good equipment is the key to an efficient and profitable growing operation, and it requires investment. Keep in mind that some equipment can be leased. Efficient growing means faster crop turns and that means more money.
Retrofitting and Renovating for Improvements
If you’ve already been growing cannabis, you are probably looking for ways to make your operation more efficient and profitable. Retrofitting existing systems and renovating the growing area are two investments that make a huge difference.
Typical retrofits might include adding automated equipment like rolling benches or updating systems like lighting for better performance.
I recommend that growers focus on key areas of need, then talk with several vendors for ideas, new information, and quotes. Most vendors are looking for a long-term partnership and are interested in helping growers move to the next level over time. Serious growers learn and think long-term.
Five Main Areas to Start With When Investing in Equipment
Equipment is like Legos — you can buy basic and add on from there when you’re ready. I recommend that cannabis growing operations start with basic equipment investments like the following that will get them off to a good start:
• Lighting. This is critical to growing cannabis, so find a good lighting expert and trust their expertise. Lighting companies will design customized layouts for your operation to provide the right amount of light, as well as the right spectrum for growing.
• HVAC Systems. The right growing temperature, humidity, and cooling all play a major role in keeping an indoor cannabis crop consistently healthy and vibrant. Some growers are moving beyond basic HVAC systems into specialized temperature and cooling systems for growing in the unique indoor environment.
• Rolling benches. These bench systems maximize a grower’s space (always a concern in growing) and help cut labor costs dramatically.
• Automated irrigation. This is another critical, labor-saving element that helps you grow consistent crops efficiently.
• Environmental control systems. Monitor and precisely control the growing environment to make sure your crop stays healthy and robust.