How to evaluate whether automated production processes are meaningful to your business and budget.
When Rich Kwesell and his brother Mike founded Strawberry Fields in 2009, they planted three plants in a spare bedroom, and every aspect of hemp production was done by hand. As their operations evolved into vertically integrated operations—including five Strawberry Fields pharmacies and Heartland Industries wholesale brands in Colorado—they gradually automated almost all production processes.
In the early days, Strawberry Fields employees smoked two gallons of garden variety spray cans to control pests. "It takes two people and eight hours to use the entire greenhouse," Kwesell said. "This is the first thing we automate. We started to upgrade our sprinkler head from a $10 sprayer to a $7,500 bio-sprayer [that] is basically a bazooka. Now, this is obsolete, and we are in the whole house Both use stationary sprayers to apply biological control."
What used to require two employees to complete a full working day now only requires one person in less than half an hour-even programming overnight without an employee on site.
Other equipment, such as automatic pot filling machines, irrigation systems, conveyor belts, and climate control, add valuable efficiencies throughout the production process. These technologies enable cannabis growers such as Strawberry Fields to effectively scale up while expanding operations in multiple states.
Kwesell said in a panel presentation at the 2021 Cannabis Conference: “[We] strive to automate the process as much as possible, simply because we have to pay with cash flow every two weeks, or we will go bankrupt.” In other words, Cash flow is always a factor, Kwesell added, “You have to think carefully before investing a lot of money in automation.”
Simplified cultivation methods come at a price, so weighing these considerations before investing in automation is a critical step. Here are some key factors to evaluate when calculating the return on investment (ROI) of cannabis cultivation automation.
For planting operations where it is difficult to hire employees to perform repetitive planting tasks (such as watering plants and fertilizing), automation has become increasingly attractive. In fact, Kwesell said, labor challenges and rising wage costs are usually the first signs that growers should explore automation — in addition, this area usually offers the greatest potential for substantial savings.
When considering automated equipment, “the first major criterion is payroll,” Kwesell said. "Payroll is our biggest [budget] item, so we always try to look at the processes that require the most labor in the process and try to offset this labor." For example, when Kwesell paid employees to spray the greenhouse for a few hours, " Their wages directly conflict with my cost of producing that pound. Once you start adopting automation, you will immediately attack your payroll and begin to realize savings."
The number of people needed to water the 25,000 outdoor-grown plants of Christina Lake Cannabis Corp. (CLC) makes artificial irrigation almost impossible, so this British Columbia-based licensed producer (LP) revolves around technology Started business and invested about 25 USD over several years. The team knows that its investment will soon offset the costs and hassles associated with recruitment.
"From day one, we realized that, in terms of the scale of our project, we couldn't do it without automation," said Nicco Deehan, chief operating officer and grower of CLC. "Our irrigation system is fully automatic, so one person can irrigate 25,000 plants. However, if you do it manually, it is difficult for the grower to [water] more than 500 plants in a day, so you need 30 to 50 People water manually. This will be a nightmare.” CLC's automatic drip irrigation system doubles as a nutrient injector, and growers can program the 20-acre outdoor planting to arrange irrigation and fertilization.
CLC also uses infrared drones that cost about US$10,000 and uses automation to monitor plant health and hydration. The monthly software subscription costs US$250. Drone technology can identify underwater or over-water plants, chlorophyll levels, growth rates, and signs of stress, so growers can take targeted methods to solve problems before they break out.
"If we have to have people walking in rows and inspecting each individual factory in the field, it will be a lot of manpower-and it will be difficult to staff these people," said Joel Dumaresq, CLC's chief executive officer.
These technologies allow CLC to equip its entire 20-acre production with five growers, plus a field staff of 10 seasonal full-time workers. According to Deehan, handing over tedious tasks to the machine not only allows employees to focus on higher-value work, it also increases productivity and increases output.
"Automation allows growers to spend more time on the things that plants need to achieve the best results," Deehan said. "Instead of holding a water stick, they can also study genetics, perform cloning, identify defects and harvest."
Shifting labor from repetitive tasks to more intensive planting can also motivate your workforce.
"You are gaining the ability to use these people in more important areas," Kwesell said. "Anything I can do can make high-quality people stand out, let them handle more workload and more responsibilities [increase their value]. It also greatly helps the morale and prospects of this person, because It helps them realize that this is a profession."
Compared with manual labor, automation provides unparalleled consistency in tedious production tasks such as watering and temperature control. These consistency can bring huge economies of scale to growers while achieving the quality level expected by customers. This is why consultants like Andrew Lange (his company has completed more than 2 million square feet of indoor planting designs in eight countries) rely heavily on automation for scalable growth.
"If you have 20 different people watering your plants, no matter how well they are trained, you will get 20 different results. Some plants will get too little water, some will get too much, and in both cases Will affect the output, so now your product has variability," said Lange, president of Ascendant Management. "The computer uses empirical data, so it knows exactly when to water—and it never stops, gets sick, or takes time off."
Deehan said that precise automatic watering and nutrient supply plans help plant health, which can maximize yield and improve the quality of the final product. Compared with the traditional "spray and pray" method, it also allows the grower to more strictly control the application rate, ensuring that the expensive nutrient solution is actually absorbed by the plant instead of wasted.
"Our growers can monitor the flow rate on their mobile devices and set alarms to avoid drought events," Deehan said. "We can also observe the runoff. According to our scale, it will cost about 35,000 US dollars a year, so we have to be very cautious. We can even use the night time to run the program, so there is less evaporation loss."
Due to these efficiencies, CLC's 2020 production is more than 44% higher than its original forecast of 22,500 kg. The dry cannabis production in 2020 is 32,500 kg, and it plans to increase its production by at least another 35% this year.
However, just because a piece of equipment is expected to increase employee productivity does not necessarily mean that it is a reliable investment. In order to balance potential labor savings and increase efficiency and automation costs, growers must analyze how each machine will affect the production process.
For example, Kwesell recently attracted his attention at a trade show and began to evaluate automatic transplantation machines. "Ultimately, our goal is to figure out: Does it make sense to spend $85 on an automatic transplanter?" he said.
Based on the estimated throughput of the machine, the financial situation makes sense for Kwesells' operations. Although financial forecasting is the key to due diligence, it is important to go beyond numbers by evaluating automated processes that are running.
"Do a lot of research," Lange said. "Take time to demonstrate and visit other facilities that run the device. Talk to the person who runs it and make sure that the process is right for you-or you can change your process to automate it. Otherwise, it's a waste of money."
For example, CLC's planting team spent years testing individual drippers before installing an automatic irrigation system. "Test it before implementation and test it again, because if you go in the wrong direction, it's hard to recover," Deehan said. "If you are building a 20-acre irrigation facility, but you find that your dripper can’t handle your [nutrient] solution, then you’re done. Make sure it can handle what you want to do.”
Kwesell said that part of measuring the true efficiency of a machine is to involve the employees who actually use it. After he interviewed and observed his team for several rounds of transplantation, Kwesell determined that they could not make full use of the machine he was concerned about. "The quantity we made is not to justify the transplantation machine," he said.
As a similar example, he said, automatic seeders might save your team a lot of time during the planting season-but these machines are designed to sow hundreds of thousands of seeds every week. Unless your production volume can keep the equipment running throughout the year, your return on investment may not be maximized.
"Based on the worst-case scenario, we usually expect to see [ROI] within nine months to three years," Kwesell said. "Never start with the best case-it will never happen. Look at the worst case, with minimal increases, what this device will do."
To assess the position of automation in your production process, please understand in advance how it may affect subsequent operations. The most important thing is: can you harvest, process and sell all the cannabis you produce through automation?
"The biggest advantage is scale-you can produce a lot of things," Dihan said. "The disadvantage is that you may get stuck because you can grow so many products with very little manpower, so you have to be careful, you have enough resources to handle it."
Ultimately, the fundamental reason for growers to automate the planting process is to reduce production costs in order to maintain profits in an increasingly commoditized market. In other words, the return on investment of automation comes down to the bottom line.
Dumaresq said: "As commercialization occurs, you see lower and lower prices, and you have to catch up and find ways to increase efficiency with additional equipment." "In order to compete with indoor and greenhouse producers, we know that we must commit to Becoming one of the lowest cost producers has driven many of our decisions around automation. Large-scale automation allows us to price ourselves so that we can compete very effectively with the [illegal] market, which allows us to be in the legal market Has a real advantage in the competition."
Dumaresq stated that CLC has raised approximately US$25 million in funding over the past three years to build its fully automated facilities. Now, by the end of the second growing season this year, he expects the business to be profitable.
Similarly, Kwesell stated that automation is critical to reducing the production cost of Strawberry Fields because it can increase efficiency while reducing labor costs. "By adopting automation, we may have reduced costs by 75% or more since 2009," he said. "At the time, we couldn't calculate the production cost like today, but the cost of producing a pound at the beginning might be more than $500. Fast forward to today, and if needed, we can reduce it to less than $100."
As profit margins continue to tighten and prices are compressed, automation investments can reap substantial returns by reducing production costs and increasing production capacity. For many growers such as Kwesell, automation is essential to remain relevant and competitive in the mature cannabis market.
"Either automate or die," Kwesell said. "If I can do it again, 20/20 in hindsight, I will take all these steps to automate faster. I will do it as soon as possible. Looking at your analysis of each decision, you might go crazy, but if The faster we can invest, we will have a greater advantage."
Plants contaminated by pests and diseases can lead to a sharp drop in yield, a reduction in cannabinoid and terpene content, or, in the worst case, a complete collapse, leading to a complete crop failure.
In addition to trying to limit external contaminants, unbalanced humidity is believed to be the main cause of pest and disease problems. When humidity levels are inappropriate, hemp crops are affected. Many growers know that low humidity and dry conditions can create an attractive environment for red spiders, while high humidity can create a mature environment for gray mold (bud rot) and other diseases.
Finally, continuous fluctuations in humidity can create an unhealthy environment for plants, which can cause certain diseases (such as powdery mildew) to penetrate into the crop.
In-depth understanding of humidity
This report is based on data from proprietary research conducted by Cannabis Business Times with the support of Hawthorne Gardening Company and Quest, as well as the insights of growers and experts on the challenges faced by planting and the techniques to solve these challenges.
Humidity and pest management are still the most concerned issues, because plant health is critical to the success of the planting business.
Participants of the Cannabis Business Times 2021 “Growing Environment State” research report stated that they are very aware of the dangers associated with poor plant health management. 41% of growers indicated that this is one of their biggest growing challenges, followed closely by It is humidity control (32%).
Although 41% of participants stated in this year's report that “pest management” is the biggest planting challenge, 65% of participants stated that they must deal with pests and diseases in their facilities within the past 12 months. Although this is a large portion of participants experiencing pest and disease problems, this number is down 6 percentage points from 2020, when 71% of participants reported that they had dealt with pest problems in the past 12 months.
The most common pest problems are: mites (30%), powdery mildew (29%) and aphids (26%). The incidence of all pests and diseases discovered in 2021 was lower than that reported in 2020, except for gray mold (12% of study participants said they were contaminated with gray mold, up from 8% in 2020).
More than half of this year's study participants (54%) pointed out that external pollution, whether through contaminated inputs or staff tracking pollutants, is the cause of the increase in pests and/or disease problems. Related to this, growers seem to have a better understanding of how to control the environment to prevent plant health problems. Approximately one-quarter (24%) of cannabis growers attribute outbreaks of pests and diseases to unbalanced humidity levels (12 percentage points lower than last year's study); 16% attribute them to lack of airflow (10 percentage points lower than 2020); 15% is due to uncontrolled temperature (a decrease of 1 percentage point from last year's study).
In-depth understanding of humidity
Humidity control may be the bane of survival for some practitioners. A sharp drop in temperature at night may lead to an increase in humidity, which usually leads to dangerous areas. The heat during the day or the heat generated by lighting will cause the temperature to rise, which leads to a drop in humidity, and thirsty plants will wither under this pressure. But temperature is only one consideration in controlling humidity; there are other factors at play.
However, what some people may not know is that in addition to the obvious risks to crops, you and your employees may also face health risks. "The combination of warm temperatures and high humidity found in many indoor cannabis cultivation operations promotes widespread mold growth," Dr. John Martini said in a press release from National Jewish Health, researching on the potential harms of cannabis cultivation. "The airborne level of mold spores we find in these structures may cause occupants... to suffer significant health hazards, especially allergies, asthma, allergic pneumonia, and other respiratory diseases."
Although most growers agree that humidity is an issue, they do not agree on the optimal humidity levels for different growth stages of cannabis plants. Although many growers admit to being unsure of their humidity control practices, others say that their optimal indoor humidity levels are definitely suitable for them.
For the cloned room, in the 2017 Cannabis Business Times "Smart Humidity" special report, 19% of the study participants stated that the ideal humidity level is 56%-60%. The same number of respondents said that ideally, the humidity level should be in the range of 76% to 80%. In summary, studies have shown that the humidity levels required for cloning rooms range from 40%-45% to over 80%.
For the vegetable room, the responses of the study participants were almost the same. The same number of respondents (10%) said that the ideal humidity level for these rooms is 40%-45%, while those who said the ideal humidity level is 71%-75% . The most respondents (22%)-far lower than most people-said their ideal humidity level in the vegetable room is 56%-60%, followed by 18% who said the ideal humidity level in these rooms is 61 %-65%.
In the flowering stage, growers are closer to reaching a consensus. Nearly three-quarters (73%) of respondents stated that the optimal humidity level in the flowering room is between 40% and 55%. 18% said 56% to 65%, and 3% of growers said their ideal greenhouse humidity level is in the range of 76% to 80%. No interviewee said that a humidity above 80% is ideal.
The growers in the study reached more consensus in the later stage of flowering. Nearly two thirds (64%) indicate that the optimal humidity level for the final stage of flowering is in the range of 40% to 50%. Within this range, more growers (39%) believe that 40%-45% is optimal than those who believe that 46%-50% is ideal (25%).
Only 4% of the people said that the humidity level during the late flowering period is preferably above 70%, while only 1% said that they prefer a humidity above 80% at this stage.
In-depth understanding of humidity
There is a growing understanding that monitored humidity levels will cause plants to thrive, and the days of keeping the growth chamber as dry as possible to avoid mold and mildew are gone.
Growers benefit from applying vapor pressure difference or VPD in the growth chamber because it enables them to promote plant growth and optimize the environment by monitoring the relationship between plant transpiration, humidity and temperature.
To understand VPD, one must first grasp transpiration, a biological process in which water travels from plant roots to leaf pores and then evaporates into the air in the form of water vapor. Under hot and dry conditions, plants evaporate more, just like humans sweat at high temperatures, leading to increased water consumption and watering needs.
VPD is directly related to plant transpiration rate, so by controlling VPD, growers can control the speed at which water and nutrients pass through plants. An increase in VPD will increase the absorption of water and nutrients by the roots of the plant, thereby promoting plant growth at an appropriate life stage.
In-depth understanding of humidity
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