One of the best parts of being in the cannabis industry for as long as we have has been the opportunity to watch (and participate in) its evolution — not just as we plan our own business and explore market opportunities, but also as a spectator. When we step back and look back at how far we’ve all come since those early days of Arizona, Colorado and Washington legalization efforts, it’s really a fascinating thing to have witnessed from the inside.
One of the most interesting facets has been the rise of the multi-facility cultivator and the development of brands spanning multiple markets in the industry. We have never—not once—spoken or worked with a start-up cultivation client who didn’t have at least vague plans to expand or duplicate their facility in multiple markets as their businesses grew. Ultimately, some cultivators fulfill those plans and build out more facilities or improve on existing infrastructure, and some don’t. The reasons for that are nearly always related to the financial success of their inaugural efforts, but we spend a lot of time thinking about what the root causes of success or failure really are. We ask ourselves, what do the most successful cultivators have in common?
VARIABILITY OF CLIMATE; VARIABILITY OF PRODUCT
As we look at every path a cultivation operator takes to success, those paths always seem to lead to one central theme: manufacturing/cultivation process control. Cannabis cultivation continues to evolve into a hybrid of farming and manufacturing. We are producing a product, and like any steel plant or toaster factory or car manufacturing facility, the process must be repeatable to enable successful expansion. We have the luxury of being able to produce cannabis in tightly controlled environments, meaning we can also tightly control every variable to ensure repeatability. With a repeatable process, surprise decreases in yield or quality can be all but eliminated. Costs are predictable. And the road map to incremental improvements is a lot clearer.
Developing and refining a consistent process is essentially dependent on two things: controls and data.
The more tightly controlled the overall environment, the better. Once a cultivation “recipe” is fully developed, repeating that recipe reliably is key. While there are a number of human variables (depending on your level of automation) that can lead to variances in harvests, and any number of processes could be automated, the most important components to automate are generally irrigation and nutrient dosing, lighting, temperature, humidity and VPD. The more tightly each of these variables can be controlled, the better. This is often easier said than done, particularly as it relates to temperature and humidity, as tight control of those components doesn’t begin with a controls system—it begins much sooner than that, at the mechanical HVAC design phase. Different HVAC approaches and equipment selections will have different capabilities and achievable tolerances. It’s important that those differences, and your own tolerance for variances in design parameters, be well understood at the design phase. The right mechanical engineer will be able to clearly articulate the differences in capability of the various systems that are available and begin with the right foundation for the level of controllability your cultivation facility requires.
WEIGHING THE OPTIONS
Once the mechanical HVAC design is complete, the next challenge is identifying the right controls system for the job. Some controls companies in our industry only provide a front-end user interface that gives set points and sends a signal to turn on or turn off equipment. With a wider ranging tolerance this may be acceptable, but when seeking tight tolerances for the most repeatable operations, modulating control is an absolute requirement, which is beyond the capabilities of many of the industry specific controls suppliers in our market. The controls supplier must also have a clear understanding of the way that the HVAC system operates. Simply following a sequence isn’t usually enough, because without a deep understanding the intent of the design, the controls provider may lack the understanding to be able to properly commission the system. We’ve also seen controls providers make what they believed to be inconsequential changes to the controls sequence that were actually quite significant, because they didn’t fully understand the ramifications of the change and how the system was intended to operate.
At Surna, our SentryIQ® controls system began with our original question: What do the most successful cultivators have in common? SentryIQ® enables tight control of environmental parameters and data collection that is an absolute requirement for a repeatable cultivation process. We give cultivators real time insight into the operation of their facility, including not just the environmental parameters but also the loading on the system to assist with evaluation of energy use. Our deep understanding of mechanical systems and cultivation operations eliminates the common coordination issues between design and controls. Our goal with SentryIQ® was to provide cultivators with a toolkit to enable a repeatable process and to continuously evaluate and improve on that process. Just as we strive for repeatability and continuous improvement within our own business, we understand that cultivators do too.
BASING BUSINESS DECISIONS ON DATA
Data collection and analysis is another key component of a repeatable operation. So often cultivators will have a surprise bumper crop—or an unexpectedly disappointing harvest—and have no idea why. What changed from harvest to harvest? Without recording data from every harvest, and all the variables impacting the harvest, the cultivator lacks a clear understanding of exactly what went wrong (or right). Data collection and analysis shouldn’t be limited just to harvest and related activities, however. It should also expand to costs and resource allocation. If a cultivator makes a change that results in a 2% yield increase, it would seem like a no-brainer to make that a permanent recipe change. But if that 2% yield increase created a parallel increase in costs, the cultivator might abandon the change. Conversely, a certain nutrient or process change might deliver a clear path to cost reduction; however, if that adjustment also led to a decrease in revenue (diminished yield or quantity), it would be avoided. Collecting data on both sides of the business gives you the tools to evaluate those adjustments and ensure that the unintended consequences of any business decision are well understood.
Data related to energy use in our industry is also enormously helpful to cost reduction efforts. Cultivators would do well to review time of use and peak energy costs and analyze the benefits of adjusting lighting schedules to take advantage of lower energy costs. It’s not well understood in our industry that HVAC systems typically use as much or more energy than lighting, so understanding exactly how the HVAC system is using energy in cultivation facilities is extremely important to your bottom line as well.