Guest Column: 5 Ways Commercial Cannabis Cultivation Businesses Lose Money

By Van McConnon

Medical marijuana growers typically are not business people. They focus on pumping out high-quality product rather than on dollars and cents, maximizing efficiency and keeping expenses in check.

That’s certainly understandable, given the fact that cannabis cultivation was an underground industry for so long.

But I’ve seen many cultivation sites in the state-legal medial marijuana sector employ money-sucking practices that hurt the bottom line and, ultimately, make it harder for them to compete.

Here are five of the biggest problems that cost grows money – and how to fix them:

#1. Inadequate Climate Control

Everybody growing cannabis is aiming for a day at the beach. Flowers need to be grown at 78 degrees, with 48% humidity and a light breeze.

But it’s easier said than done. While the target environment is a known, most growers have never tried to create this environment on a commercial scale.

I have walked into grows with humidity ranging 35% and 91% in a 24-hour period. I have fixed grows that were hitting highs of 96 degrees for weeks during the summer months.

How does this happen? It happens when you ask a grower to design your HVAC and interior finish instead of an architect, a structural engineer and a mechanical engineer. Your grower’s job is to grow – do not let them engineer your facility.

If your environment is too cold by 10 degrees, your plants’ metabolism is off 20%. Your yield will be off and your bud density and quality will also suffer.

Climate is everything, so make sure it’s right.. If you’re reacting to a predictable and preventable disaster, you need to make sure that the next dollars you spend guarantee your climate is under control. A lot of problems that are blamed on growers are actually environmental issues. Fix them.

#2. Haphazard Pest and Disease Management

You’re a farmer. You cannot react to pest problems; you must have a preventative pest management regimen that proactively addresses the most common problems in commercial gardens.

Spider mites, powdery mildew, root aphids, whiteflies, fungus gnats, thrips, hemp russet mites, and botrytis will destroy your garden if you let them. Preventative measures will ensure success.

Your environment is your first line of defense against powdery mildew and botrytis. If the temperature throughout your facility is between 65 and 80 degrees during every twenty-four hour period and your humidity stays between 40% and 55%, you have prevented the vast majority of powdery mildew and/or botrytis outbreaks. Any outbreaks will be the the result of microclimates in your grow and/or gross contamination.

All of the other pests can be controlled with routine applications of pesticides and/or the use of predator insects.

I recommend at least two distinct regimens be used in series. One very effective regimen involves using Pyganic and Azamax insecticides – products that are certified by the Organic Materials Review Institute (OMRI) – as well as nematodes and predator insects during different phases of veg and flower.

Another effective regimen featuring OMRI-certified products uses various sulphur applications, insecticidal soaps, nematodes and predator insects.

Having multiple effective regimens will help prevent catastrophes.

#3. Absurd Strain Selection

The strains you choose to grow directly affect the profitability of your business. I’ve seen many growers who focus on lower-yield strains that don’t command the pricing power to justify what amounts to higher production costs.

If your cultivation site averages a pound per thousand watts five times a year, your costs will be $850 to $1,200 per pound. If your garden produces a pound and a half per thousand per turn, on the other hand, your costs drop to between $500 and $850 a pound – a significant difference.

You must always consider yield versus the price the flower commands at retail when selecting strains. Always try to add strains that up your average. If you have to grow a highly fashionable strain that yields 400 grams per thousand watts, get rid of a strain that yields 375 grams to provide some balance. If you have a strain that produces two pounds per thousand watts, grow it until you literally can’t sell any more.

A good OG-derived strain should cost twice as much as Blue Dream at retail. It doesn’t. In fact, in some cases the prices are the same. And it costs a lot more to produce OG strains, the yield is much lower and customers are not ready to pay a premium for it.

Yet I still see grows overloaded with OG strains. Until the market matures, they are essentially catering to connoisseurs who won’t pay for the difference, and therefore they are not running a good commercial business.

Finding a better balance is going to be even more important as the market moves away from flowers towards extracts.

#4. Poor Scheduling

If your facility is not growing at capacity, you are losing $30-$55 a day per fallow lamp.

Most empty flowering space is the result of poor scheduling and inadequate strain notes.  Your strain notes should at a minimum include: propagation rates, veg time, growing method, plant density numbers and flowering time.

With this information, you will able to develop a schedule to keep your space full. A single-day turn is the ideal that can be achieved with excellent planning and strain notes.

Start thinking six months in advance and avoid fallow lamps – they’re burning money.

 #5. Inadequate Production Space

Make sure that you have allocated sufficient space for all phases of production.

I have been in grows with no space for processing and curing. I have been in grows with one vegetative lamp for every 10 flowering lamps. I have been in grows with no bathroom or potable water. Your space and equipment must provide for efficient workflow. Adding 10 more lamps to flower is pointless if you don’t have the veg or propagation space to support it or enough space to process and cure the harvest. Well-planned space will produce higher quality marijuana in larger quantities.

Fixing these five issues will help cultivation sites move to the next level and improve their financial health.

Growing great cannabis at a commercial scale had never legally been done before 2009. The learning curve has been steep, but best practices are emerging from the chaos – as well as acres and acres of great marijuana.

Van McConnon is a senior consultant with Colorado Cannabis Systems in Boulder, Colorado, and has been growing and selling legal medical marijuana in the state for five years.

Daily News | National Medical Cannabis Business & Marijuana Legal News

 9 Comments

  1. Lonnie Painter December 16, 2013
  2. Patrick Smyth December 17, 2013
    • bongstar420 October 31, 2015
  3. Trippy Tim March 10, 2014
  4. Brandon Kelley September 30, 2015
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  7. Rob Cochran February 7, 2017

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