First steps

The romance of the quick buck never goes out of style, and the burgeoning cannabis industry is arguably the sexiest get-rich-quick opportunity out there today for people with a couple million dollars to spare. People who are getting out their wallets to buy into that opportunity are “money people,” not cultivators, yet they are confident they can hire someone to grow this plant for them. One of our cultivator friends in the business laughed when we asked a prospect if she “had $2 million for the facility and startup?” Our friend rightly suggested that the right question really was: “Did she have $2 million to lose?”

Don’t let being star struck turn into dumbstruck. Here are some important points you absolutely should consider before you start on your path to cultivation. If you can say you understand them and how you will act on them, you are off to a good start. If, however, these are foreign topics, you would do well to seek help in researching and planning your operation.

Pesticides

Does your team, or prospective team, know how to control the major cannabis pests using only the (very small or non-existent) list of pesticides approved for use in cannabis cultivation in your state, or no pesticides at all? A well thought out pest-management scheme pays dividends every day.

Pressurized rooms are often cited as effective in preventing airborne “bad actors” from entering the grow space. But make sure that the pressurized air does not flow into another cultivation space, contributing to contamination. If you are willing to spend the money on clean room facilities, you may not need to spray pesticides at all.

If not, however, there are a number of important considerations. Pesticide labels often say something like, “Apply before pests appear. Not effective against established populations.” It is imperative growers understand that these pesticides cannot control pests without help and that they must turn to the principles of integrated pest management (IPM). They need to learn to use every tool available to them to keep pests away from their plants and reduce the need for pesticides. This often requires changes to workflows, access points in cultivation spaces and even infrastructure. It is never fun.

A common phrase overheard again and again regarding pesticides is, “Oh, I tried that stuff; it didn’t work.” Close examination of these cases often reveals usage mistakes, or a lack of understanding how the pesticides work. If you’re using a pesticide that only affects developing insects, for example, don’t judge it to be ineffective when it does not kill the adults.

Growth inhibitors slow or arrest the development of young insects. Contact pesticides have various killing effects when they touch the pests, and stomach pesticides must be ingested by the pest to disrupt the pest’s feeding abilities. Knowing which ingredients do what to pests and at what point in their lifecycles is key information for successful operators.

Choosing pesticides is easy compared to getting them applied properly and safely. Spraying often renders a cultivation space “off limits” for hours, so you need to integrate that time into the work schedule. Every operation needs to use a licensed Private Pesticide Applicator to make sure that the pesticides are handled safely and applied for maximum effectiveness, as well as to satisfy local regulations. Operators should check their state’s pesticide regulations to see if they are required to get staff certified as pest applicators. Regardless, it’s a good idea to get your staff certified in pesticide application, as it not difficult, nor expensive, and it focuses your team on safe practices, as well as reduces mistakes.

The Pesticide Applicator addresses such questions as: Does this product label suggest that the pesticide be applied with a specific drop size that might require a different nozzle? Where do I need to spray for different pests? How often? How long? Is the treatment having the desired effect of controlling the pests/disease? Can I mix one product with another, so I can cut down on applications? Spraying requires focus and attention to detail to keep your workers and your customers safe.

Space and money

Some growers like to stuff as many plants under lights as they can (thinking more plants, more yield). But crowded conditions promote pests and disease and, at the same time, make it harder to detect and treat them. Add to that the reality that tests comparing plant yield between high- and low-density plantings confirm that well-spaced plants produce more than crowded plants.

Many people understand the effect spacing can have on yield, but the space in which we ask workers to toil also makes a difference in how well the operations run. And, again, a crowded space with too limited access to plants due to overcrowding is not a good idea. Crowded plants take extra effort just to access them to perform daily tasks.

Storage

A question we often ask when reviewing facility layouts is, “Where is your storage?” The answers often indicate storage is an afterthought or that there just was not enough space in the facility to hold everything.

The materials/supplies, tools and equipment used in cultivation all need to be stored so that they are not at risk for contamination or degradation, and do not contribute to cross-contamination when they are accessed for use. Yet, they also must be readily available to workers. The ideal situation is to have all supplies and materials stored inside the facility.

If an employee has to walk outside to get a bale of peat, that is an opportunity for that employee to be contaminated with powdery mildew spores, spider mites or other pests common outdoors. One possible approach, if staff need to bring materials in from outside, is to have them wear disposal garments while they are outside; they would then dispose of the garments outside just before bringing the material into the facility.

If such procedures seem over the top to you, they will seem quite reasonable after you experience your first major pest outbreak that kills all or much of your crop, and interrupts production for months while the production line is reloaded. The money lost will no doubt outweigh the costs of establishing effective procedures.

Environmental controls

How does one plan for the unknown? When developing a new operation in a new facility, especially retrofits, what it actually will take to control your environment will not become known until production begins and the systems experience the actual operating conditions. With luck, the new facility operator will find they only need a little tweaking to get things under control, but others may find their systems are inadequate and in need of expensive changes.

When possible, plan the system for the eventuality of the whole array of environmental equipment: HEPA filtering of intake and recirculated air volumes, heaters, chillers, exhausts, dehumidifiers. But letting the “unknowns” determine whether there is sufficient capacity to control the environment within the target ranges and response times could prove that some items may not be necessary.

An example of where you could potentially save money this way is to hold off on buying dehumidifiers until you know whether you can grow the plants powdery-mildew-free within the humidity ranges the system delivers without dehumidification equipment. Growing an open, airflow-friendly canopy can be all that is required to save on dehumidification. However, if you want tighter control of the humidity in the facility, dehumidification may be necessary; in that case, since you planned ahead, installation of dehumidifiers will be easy.

People

Where are you going to get all of the people to do all of the work—propagating, transplanting, spraying pesticides, harvesting plants and such, and how will you make sure they are not only doing the right things, but doing them effectively? While a lot of the cannabis workforce has grown the plant themselves at one time or another, they seldom have much large-scale work experience, and when you have to explain the importance of hand-washing to people before you can let them into your operation, you begin to understand how much the successful operation needs an effective employee manager/director.

Many operations we have seen have had to invest more than they imagined to get the productivity of their teams up to snuff. This is the result of not knowing things like where to find qualified personnel and how, then, to educate a constantly changing stream of new employees and managers so that the operation does not skip a beat every time personnel changes.

Finding people is a matter of advertising or networking, but educating your staff requires a significant effort; this directly affects your staff’s productivity and, yet, it is seldom considered. A good solution is to create a “How to” reference by documenting every activity that happens in the operation. Documented processes are commonly known as Standard Operating Procedures, or SOPs.

Regulation

State regulation of cannabis production places a unique and heavy responsibility on owners and operators. To avoid the need for a defense lawyer, get good legal counsel upfront and make sure that your operation is compliant with all applicable local, state and federal laws.

This is no business in which to take regulation lightly, and risk management plays a key role in protecting investments. Besides the obvious cannabis regulatory compliance issues, you are building/launching a business in an industrial setting, and worker safety and protection is going to become a part of daily life. Accidents can close an operation as surely as a pest outbreak.

All in all

The lure of big payoffs must be tempered with the realities of stepping into a new and unfamiliar market that warrants due diligence on top of more due diligence before shelling out the cash. Don’t let the fear of the unknown deter you, but know that the devil is indeed in the details, and there are a lot of details out there that can trip you up.

Also know that everyone will have a solution to offer you, and you have to decide who to listen to. A good guideline is to listen to people who focus on cultivation and not technology. Technology guidance can be found by looking for academic and plant industry research (especially from university settings) for information on all the key inputs: light, nutrients, media, plant health care and pest management. Cannabis does not require anything more than any other plant, and the answers about how to properly grow it are already out there.

In short, do your homework, set reasonable expectations, expect pain and trouble like any business, and if you get stuck, get help.

Kerrie and Kurt Badertscher are co-owners of Otoké Horticulture, LLC and authors of “Cannabis for Capitalists.” They have worked with large-scale cannabis producers for more than five years.

This story originally appeared in our sister publication, Cannabis Business Times. For more cannabis production information, visit www.cannabisbusinesstimes.com.