Minimizing Indoor Grow Costs

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Minimizing Indoor Grow Costs

How to Boost Profit Margins for your Indoor Grow

Many growers who are looking to design and build an indoor grow cannabis cultivation facility go in with the mindset of minimizing construction and operation costs. However, with this mindset, the problem that arises is that a bare minimum standard must be reached—because cannabis can be grown by simply sowing a seed in the soil. 

But to economically grow cannabis in a controlled environment certain criterion must be met, and the equipment required to meet this criterion can change depending on property, climate, and regulations.   

This article provides an overview of how you can minimize the cost of building your cannabis cultivation while getting the most bang for your buck. 

Table of Contents:

1. Multiple Routes: New Build, Retrofit, or Buy Existing

2. Minimizing Costs in Cannabis Cultivation

3. The Hybrid Greenhouse: Designing The Most Cost Effective Solution

4. Costs and Return-on-Investment (ROI)




Multiple Routes: New Build, Retrofit, or Buy Existing

The roadmap a facility takes before reaching its first cannabis harvest can vary greatly. Some may look to retrofit an existing manufacturing warehouse or flower greenhouse, while others choose to build new. When building new, the choice between urban and rural properties will drive a range of costs, many not directly related to the growing of cannabis such as parking lots and security. Even on new builds, what is designed and selected may not fit the needs of the cultivation team once the facility is operational as employee turnover and grow license transactions are common.

Minimizing Costs in Cannabis Cultivation

Size Matters

A realistic budget is a requirement for every facility, and some will be constrained to certain sizes and plant counts depending on their regulatory jurisdiction. Increasing the square footage of a facility is the easiest way to increase yield relative to costs.  

As a facility increases, its canopy square footage, the percent space allotted to equipment, offices, and post-harvest decreases.  

The economies of scale also play favorably into new facilities as the cost per sqft for a new build that is 3,000 sqft will be twice of a 15,000 sqft facility which will be twice of an acre facility (43,560 sqft). Maximizing the canopy space of a facility within a budget means the biggest step towards increasing yield has already been taken.

Fast Design and Construction

Once a site has been properly selected, construction may begin. It is in this step that costs may begin to balloon. Oftentimes in cannabis, the design process is skipped during architectural programming, leading to costly scope gaps and misconstrued expectations. Many facilities are rushed through construction in hopes of obtaining much-needed revenue at first to market margins. This rushed process creates headaches at startup and ultimately slows down the facility’s rate of optimization. To overcome these hurdles, flexible designs that meet the minimum requirements for controlled environment agriculture have become the norm.

The Hybrid Greenhouse: Designing The Most Cost-Effective Solution

The hybrid greenhouse is the solution for commercial cannabis cultivators looking to grow in a greenhouse while minimizing capital and operational costs. It does this by minimizing construction costs and lead time using the Prospiant Vail structure and corrugated polycarbonate roof glazing. Throughout the year, the greenhouse utilizes the free sunlight and supplements with HPS lights to grow all year round. Cannabis cultivators growing in a hybrid greenhouse can rely on producing quality flowers high in terpenes for smokable bud or extracts. Typically, a headhouse will adjoin the greenhouse utilizing the same A-frame structure and house space for mechanical equipment, post-harvest processing, and offices.   

The layout of the hybrid greenhouse is dictated by a host of factors but its pad and fan HVAC system places certain requirements. In gutter-connected greenhouses a corridor will connect zones and serve as an operational space. In the hybrid house, the corridor serves another purpose as an air intake. It is common for hybrid greenhouses to exclusively grow in a greenhouse for all cannabis lifecycles: mother, propagation, vegetative growth, and flowering. Separation of zones of different lifecycles is a must, and hybrid growers often opt to make every house an isolated zone to ensure proper sanitation practices. Doors separate every zone and security cameras record those entering and exiting as they pass over sanitation mats. Most hybrid greenhouses will use concrete flooring with drains to route irrigation runoff out of the space.

Greenhouse Structure

What makes the Vail structure unique compared to other A-frames is its pre-welded engineered truss that has served the American commercial flower industry for generations. Because the truss is pre-welded, there are fewer parts shipped and in need of installation on-site. This also provides consistency in dimension and prevents troubleshooting in the field. The Vail uses a 6/12 roof pitch that is ideal for shedding snow and managing roof condensation. Structural engineers can calculate the required size and thickness of galvanized steel posts and trusses for any region’s snow and wind loads—ensuring your dollar is spent efficiently while ensuring proper permitting and state of mind. Designed around supporting hanging flower baskets in the Rocky Mountains, the Vail’s truss seamlessly merged with the weight requirements of cannabis such as fire sprinklers, grow lights, circulation fans, cable trays, and heat pipe. Typical widths for a Vail truss include 30’ and 42’ with bay spacings of 10’ and 12’. Posts of a hybrid greenhouse are around 14 feet tall and are secured to the foundation using preset post stubs or base plates. Aluminum flashings and extrusions ensure proper sealing and leak control.

Glazing: Roof and Walls

Typical wall coverings for the hybrid greenhouse include 8mm opaque polycarbonate—referred to as white-black-white for its white exterior and light-blocking interior. These panels are easily cleaned and installed while being the most cost-competitive option on the market. Operators often look to upgrade exterior walls to an insulated metal panel to provide increased security and insulation to prevent condensation from forming on the cold surface. These same opaque materials are used for roof covering in zones where sunlight is not desired. This allows for proper photoperiod control and reduces the solar heat gain in these areas. An economic and easily installed option for roof glazing in grow areas is a corrugated diffused polycarbonate panel. To improve light transmittance, operators may upgrade to acrylic or diffused glass panel. Many facilities use poly films for greenhouse roof glazings, which experience lower PAR light transmittance, but this is often seen as the easiest way to increase profitability as upgrading from a poly film to rigid covering is cheap compared to increasing supplemental lighting and comes at no additional operating costs. In fact, rigid coverings require less maintenance than polyethylene films.

Blackout: Light Deprivation

One aspect that separates the hybrid greenhouse from its traditional counterparts is its photoperiod control. Sidewalls are opaque in part to prevent light from entering the growing environment. While it can be argued that the additional light is worth utilizing and a roll-up blackout curtain should be used on sidewalls, these systems often add quite a bit of additional costs. In addition, roll-up curtains are prone to malfunction and can impact photoperiod control, it is also hard to provide a complete seal when using a vertical roll-up curtain over an entire range. To prevent light leaks from wall-mounted equipment like fans and shutters light traps are used, unfortunately, these light traps also add to the static pressure fans need to overcome and must be routinely cleaned. To prevent sunlight from entering the crop canopy during nighttime blackout curtains are used. These slope flat slope curtains integrate seamlessly with the Vail truss and provide proper sealing. Most curtain systems will experience pinhole light leaks with wear and tear, for this reason, it is recommended to use a triple-layer blackout curtain if all light is to be eliminated in the zone. The blackout curtain should be located above the shade curtain on a vail to help ensure a proper seal, where the shade curtain does not need to be as precise.

Shade Curtains

The shade curtain is an incredibly efficient piece of equipment that every cannabis greenhouse should use. Its primary function is to reduce solar heat gain where zones can experience 10F in cooling with no utility cost. The percent of shading a cloth incorporates will change depending on geographic location but 30%-60% is common. The shade and blackout curtains can also be used as an energy curtain at night and in the winter. By utilizing energy curtain techniques, the insulation value of the roof is nearly tripled, greatly reducing the amount of energy used for heating in the winter.

Heating

To heat the greenhouse in the winter the cheapest option is to use a unit heater to provide sufficient BTUs to maintain the desired temperature delta. While minimizing heating costs is a priority in many greenhouses, cannabis growers tend to put the issue behind lighting and dehumidification. Commercial greenhouse unit heaters are very easy to install but do require natural gas or propane along with proper venting. To create a more homogenous heat distribution fan jets with poly tubes may be attached to the unit heater and run throughout the zone. In addition to unit heaters, many growers will opt to provide hydronic under bench heating. This heating not only provides a more uniform distribution of heat right to the plant but can also be used as a growing tool to heat the root zone and dry out the media. Those looking to reduce operational costs on large ranges may look to go full hydronic and use radiant heat pipe on sidewalls, gutters, and overhead.

Cooling

To cool the hybrid greenhouse uses pad and fan cooling. At the initial stages the evaporative pad will not turn on but rather the fans will begin to turn on and pull a varying amount of air through the grow zone depending on how many fans are on. Air intakes are outfitted with insect screening designed to keep aphids and thrips out of the zone. Insect screens require routine maintenance and replacement as they quickly clog up and reduce the efficiency of exhaust fans. When all exhaust fans are on, the greenhouse will experience one air exchange per minute. If the fans are fully on and the temperature is still too high, the evaporative pad is turned on to provide efficient adiabatic cooling. The evaporative pad works by adding water to a wet cardboard pad and forcing air through it; as dry air passes through the pad it evaporates water. As energy moves from the air to the water the temperature of the air decreases. Depending on the outdoor relative humidity, air can be cooled to 15F using commercial greenhouse humidifier. Air exiting the evaporative pad will be more humid than the air entering, which is great if humidification is needed, but can cause concerns if relative humidity levels are already too high in the greenhouse. 

Dehumidification

The hybrid greenhouse does not utilize advanced dehumidification technologies but rather takes advantage of economization and dry outdoor air. This is the reason the hybrid greenhouse thrives in dry environments but struggles in more hot and humid regions. The hybrid greenhouses typically use a fan and shutter located in the upper gable of the zone’s exterior walls to pull in dry air. This is particularly relevant during the winter to prevent condensation on the cold roof when outdoor air is dry. To overcome these dehumidification problems, some growers, opt to add supplementary dehumidification, commonly through DX units, to help overcome challenging times of the year or at night—lending the name semi-sealed or nighttime only dehumidification.

CO2 Enrichment

Cannabis thrives under high light levels, but in order to fully take advantage of levels above 800 umol carbon dioxide enrichment is needed. CO2 enrichment can take place in the hybrid greenhouse during times of limited air exchange, but when full cooling is activated CO2 supplementation will not be able to keep up. To minimize the cost of CO2 enrichment, CO2 burners are used in the greenhouse to boost levels when appropriate. Because of this inability to provide a 1,000 ppm environment throughout the year, investment in hybrid greenhouse lighting should be minimized and its emphasis should be on growing year-round under the sun.

Supplemental Lighting

With the goal inWith the goal in mind of minimizing the costs of commercial greenhouse lighting, high-pressure sodium fixtures are typical. In the winter months when light levels are lowest HPS lights will be on during the entire photoperiod delivering daily light integrals between 25-30 moles to the cannabis canopy. The radiant heat produced by the HPS fixtures is welcomed during these winter months. As the amount of sunlight increases the HPS lights will be turned off to reduce the heat inside the greenhouse, particularly if the shade curtain is being pulled. It is not recommended for hybrid growers to use their HPS lights all day in the summer due to photobleaching as parameters fail to keep up and plants become overstressed. 

Benching Systems

One of the easiest ways to increase labor efficiencies and plant health is by taking the plants off the ground and supporting them via a steel and aluminum bench system. Due to their low cost, durability, and efficiency rolling bench systems are common in hybrid greenhouses. Rolling benches take advantage of their floating aisle, meaning that aisles are not located in between every bench, but rather the benches spread apart to form an aisle. By using the floating aisle, bench systems become 25% more efficient than their stationary counterparts. Benches typically slide back and forth on a round roll pipe, and the distance it slides is limited by the benchtop’s center of gravity. If this center of gravity overreaches the bench legs’ width the benchtop will tip. The wider a bench gets the more efficiently it can roll and create an aisle, unfortunately, benches that are too wide face problems with workers reaching and maintaining the center. A 5’ wide bench is a great option to meet the needs of space utilization, as it is able to produce a 21” rolling aisle or move 10.5” in either direction when centered.   

Rolling benches can support a variety of benchtops with expanded metal being the cheapest, but it is recommended growers use a benchtop that is capable of collecting irrigation runoff. Expanded metal benches are unable to collect irrigation runoff and it will drip from the pot onto the floor. Once on the floor, the water will evaporate, increase the humidity level, and will also lead to algae and microbial growth. Plastic ebb and flood liners along with metal troughs are typically used to collect this runoff as a benchtop. Troughs, as opposed to liners that take up an entire bench’s width, are used to promote airflow through the plant canopy, as the solid benchtops in a floating aisle arrangement can act as a second ceiling.   

Rolling benches for cannabis production in flowering zones are typically outfitted with trellis supports. These supports are 4’-6’ tall and attach to the benchtop’s side rails. These supports allow for trellis netting to attach to the bench above the plant canopy. When flowering plants encounter the trellis netting, they will begin to form more colas and improve their yield. Benches allow workers to more easily access the plants to help train them in SCROG netting and during de-leafing.

Irrigation

Benchtops are often outfitted with drip irrigation tubing and stakes that provide precision waterings to the cannabis plants. Drip irrigation is used for its efficiency, accuracy, and low cost. Watering overhead is not recommended for cannabis as it increases the environment’s humidity and wets the leaf, increasing the likelihood of disease forming on those water droplets. Drip irrigation provides pulse irrigation events where cannabis plants are provided low-flow streams of water until they reach a desired media moisture content. When fertilized water flows from the drip stake it immediately enters the plant’s media and does not wet the leaf or stem. Pressure compensated emitters ensure all plants receive the same amount of water in a given zone.   

Efficient drip irrigation systems use 75% less water than hand watering or overhead spray systems. Because the water is targeted directly at the roots the amount of runoff can more easily be controlled. This reduces costs for water management and drain systems. When regulatory conditions allow, most drip irrigation systems look to minimize costs drain irrigation runoff to waste, and look to minimize the amount that goes to drain. Recirculation systems can be used to treat irrigation runoff but more often this money is used more efficiently elsewhere in the form of lighting or HVAC upgrades.   

Water treatment is commonly used on the front end where water enters the irrigation systems from well, surface, or municipal supply. Carbon and sediment filters are a necessity and reverse osmosis is often used to provide a clean slate, which is helpful for standardization across facilities in different locations. A water analysis can determine what treatment options are needed and can impact what fertilizer recipe one uses.   

Fertigation units are used to automate one of the most laborious and technical aspects of growing cannabis. These units pull from 2-4 fertilizer concentrates along with a pH adjustment and sanitizer. Fertigation units measure the irrigation solution’s pH, EC, and flow rate.

Environmental Controls

A proper environmental and integrated controller is used to maintain and monitor all the systems of the facility. These systems link up with irrigation, HVAC, and lighting equipment. They are also used to provide a historical reference for growing zones as they measure temperature, relative humidity, PAR, and CO2 levels. The greenhouse will also have a weather station tracking outdoor conditions and comparing them to the greenhouse’s interior. These control systems can be used to minimize utility and labor costs across the facility.

Odor Mitigation

When exhaust fans are activated the environmental control system will trigger the activation of odor mitigation devices. These high-pressure fogging vessels inject odor removing or masking agents into the exhaust airstream to reduce the presence of cannabis odors. Attempting to limit all presence of cannabis odors is very difficult and costly. Effective action to take early on is to choose a property away from those who may file formal complaints.

Costs and Return-on-Investment (ROI)

Capital Costs

The capital cost for the hybrid vail can be broken out into three nearly equal categories: structure, systems, and general contracting. The structure includes components such as steel framing, aluminum extrusions, glazing, screens, and doors. The systems include heating, cooling, irrigation, and lighting. General contracting includes land, foundation, utilities, permitting, and other components required from a legal perspective. Those looking to build a single house will face high initial costs for acquiring a license, land, and installation. Once over an acre, a project’s entire cost can reach below $100 per sqft, going as low as $50 per sqft.

Utility Use

The hybrid greenhouse is an efficient utility user. By employing the natural sunlight the hybrid vail only needs to use supplemental lighting during the winter and parts of spring/fall to obtain daily light integrals of over 30 moles per square meter. A 10,000 sqft hybrid greenhouse can expect to use around 500,000 kWh in a year for growing operations. The hybrid greenhouse uses more water than a typical indoor grow. This is due to the evaporative pad system using as much water as irrigation to keep the facility cool. A 10,000 sqft hybrid greenhouse can expect to use around 1,000,000 gallons of water each year. To keep the hybrid greenhouse warm in the winter natural gas unit heaters use around 2,500,000 cubic feet of natural gas over 10,000 sqft. When using utility costs of $0.0022 per gallon of water, $0.10 per kWh of electricity, and $0.006 per cubic foot of natural gas the utility costs come down to about 75% electricity, 20% natural gas, and a small sliver spent on the water itself. It should be noted that irrigation water sees additional cost expenditure in the forms of fertilizer and runoff. The major operational cost cultivators must consider is labor, which is the greatest operational cost in the cannabis cultivation process.

Predicted Yield

When growing 6 crops per flower house in a year, fast ROIs can be achieved. Hybrid vails conservatively harvest 0.07 lbs of dried flower per sqft of flower canopy. This metric revolves heavily around strain and light level. Those looking to increase their total revenue using the hybrid vail model are best served to build out additional areas as opposed to adding technologies to increase yield. Those able to sell products for $1,000 per pound of dried cannabis can expect revenue of $1,000,000 per 3,000 sqft of flower zone. 

Vertical Integration: Soil-to-Oil

To achieve further efficiency and minimize costs it is common for hybrid greenhouses to be built in tandem or connected to a processing building. This allows cultivators to reduce transportation costs as they vertically integrate their operations. By building out space for drying, curing, and processes such as carbon dioxide or ethanol extraction operators can expect additional savings by streamlining their operational workflow. Those looking to competitively compete for the long haul in cannabis cultivation are best served to look towards the hybrid greenhouse and vertically integrate it with its processing counterparts.

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