Ever since Canada legalized cannabis last October, the market has demonstrated a clear and ever-growing demand for marijuana products. Unfortunately, serious cannabis shortages abound throughout Canada, and experts say these shortages could continue for years.
In light of these recent shortages, many cultivation companies and brands are feeling the pressure to scale up quickly to meet growing demand and compete with big licensed producers in Canada. These giant indoor and greenhouse grows cover thousands or even millions of square feet.
But is bigger always better?
While some say scaling up is worth it in the long run, others argue that you can’t scale up without sacrificing the quality of your cannabis. They add that large grows have a number of problems, which affect the products that are reaching consumers.
Here’s what you need to know about the pros and cons of cultivating cannabis on a massive scale, and how this style of growing affects the cannabis available to you.
From Tiny Grows to Cannabis Greenhouses Covering Millions of Square Feet
Large-scale legal cannabis is a relatively new phenomenon. In the old days of growing this potent plant, scaling up wasn’t an option. In most places, growing cannabis was just plain illegal, so growers needed to hide their crops. In other places, cannabis was highly controlled, and while small-scale growing was allowed, large-scale cultivation could land you in serious trouble.
Those in the know would find cannabis growing in small tucked-away greenhouses, remote patches of outdoor land, basements, closets, garages and extra bedrooms. There were no giant agricultural warehouses outfitted for growing cannabis—and if there were, they were operating in some seriously risky territory.
But legalization in areas all around the globe, and in Canada as well, has changed all that. Now legal growers are trying to ramp up cultivation in order to:
- Meet growing demand
- Bring down costs
- Become household names in their local markets
In the U.S., we see cultivators in states like California, Arizona, Colorado and Oregon growing cannabis in greenhouses exceeding 250,000 square feet. Compare this to large-scale greenhouse facilities in Canada totalling millions of square feet.
Why Canada’s Cultivators Are Scaling Up
This trend in cultivation is likely to expand with cannabis legalization. But is this a good thing? Well, there are some pretty good reasons why companies are expanding their grow operations. Here are some of the main benefits of large-scale grows, and why many companies are making the move to go big.
- Reducing expenses. One of the biggest and most obvious reasons to scale up is to reduce costs. When you have a larger operation, it costs less to create the same products. This is in part because certain costs don’t expand with increased production. For example, if you’re a cannabis brand, you have expenses like advertising, marketing, branding and management, which may not go up very much with increased production. So by expanding production, you can bring in more money with only an incremental increase in these types of expenses.
There are also production needs that have to be met, like buying nutrients or pest control products. But the more you need of these key ingredients, the better deals you can get on bulk pricing, which then ultimately brings down the cost of growing. The product that cost $2 to create on a small scale may only cost $1.50 to create if you scale up your operation. This savings gives growers an added incentive to ramp up.
- Driving down costs for consumers. Of course, driving down costs for growers can turn into big savings for consumers. We’ve already seen that the trend towards large-scale grows causes drops in the cost of cannabis. In Colorado, for example, the wholesale cost of cannabis dropped from nearly $3,500 per pound in 2013 to only $1,012 per pound by April 2018. While this put some growers out of business, the bigger cultivators were able to keep costs low and pass that savings on to the consumers.
- Hiring the best growers. Jonathan Page, a cannabis scientist and chief science officer at Aurora says that the company hasn’t had any issues scaling up. He points to the ability to hire the best growers as one of the big positives that makes expanding its grow operation worth it. When you have big grows, you can afford to pay more for your talent.
- Achieving continuous output. Bruce Linton, CEO of Canopy Growth Corp, Canada’s largest cannabis producer, also agrees that scaling up is better. He says one of the big benefits is a continuous output of cannabis products. “There’ll always be some new area producing and finishing,” he said, ”which will give you much more consistent product and also a much lower cost of operation.”
The Potential Consequences of Growing Cannabis on a Large Scale
Still, while scaling up seems like a great idea, not everyone agrees that it’s the best way to go. Some even suggest it could be detrimental to the quality of the cannabis product that hits the market. Here are some of the major cons to scaling up, and why smaller growers are unwilling to make the change:
- Difficulties maintaining quality. One of the biggest complaints small-scale growers have about scaling up is the difficulty in maintaining quality markers for cannabis. For example, Tom Flow, the CEO of The Flowr Corporation says that his company has a more sustainable strategy than the big growers do—by staying small, Flowr is able to grow “high quality” cannabis. He adds, “I would say getting a large-scale greenhouse to produce premium, high-end flower is almost impossible, or not possible at all.”
- Challenges controlling for pests and mould. One reason for these quality differences is the added challenge of controlling for pest and mould in a larger space. “In a controlled environment that is smaller in size, we have the ability to control every parameter that might affect the growth of the cannabis plant,” explains Flow. “You don’t have as much control in an expansive greenhouse.”
This is a big issue for cannabis, which doesn’t have the same kind of resistance to diseases that we find in most commercial agriculture products. In addition, cannabis producers are unable to apply the pesticides used in other agricultural products, because cannabis is primarily consumed by inhalation. “That separates how you can grow it from most other agricultural products,” explains Flow. “Health Canada regulations have really restricted the use of pesticides, so when you’re growing in larger and larger environments, and you have hundreds of thousands and millions of square feet of greenhouse space, those pests become harder to control, harder to mitigate.”
- Cannabis genetics aren’t designed for large-scale growing. There can also be issues growing in large-scale facilities, because of the genetic variations of cannabis that are available. Cannabis’s past as an illegal substance drove it into small-scale grows, and the cannabis genetics that we have appears to have thrived in those environments. Now these same plants—developed for small, indoor grows—are being transplanted to giant greenhouses. And sometimes with not so great results.
John Fowler, CEO of Supreme, another cannabis company trying to stay small, says that the best kind of cannabis has come from small, indoor grow rooms. “It was grown by trial and error in small heated rooms. And some of the best bud out there is still on the black market,” he says.
- Relearning how to grow cannabis. Ryan Douglas, who oversees over 30,000 square feet of commercial cannabis production at Tweed, says part of the problem is that most cannabis growers only know how to grow small. “If you were to consider a typical home grower, even a true expert grower … the actual skill in running a production scale, operation, regardless of the plant you’re growing, is a lot different than the skills required to be a master horticulturist in your basement,” he explains.
Ryan says large-scale operations would do better finding cultivators from outside the cannabis space, and teach them to grow cannabis at scale, rather than try to get expert marijuana growers to relearn cannabis cultivation in a new way. Still, for those small-scale growers who are making it, trying to go big could lead to even bigger problems and a lot of relearning around how to do it right.
- Unsustainable model for Canada’s future. A final critique of large-scale grows is that they’re simply unsustainable for the long term. Our current model of cannabis silos product to the area in which it’s produced. Crossing borders with it is illegal, so producers are needed all over the country.
But as global awareness of cannabis’s benefits expand, we may see a loosening of these restrictions. If importing cannabis from other countries were ever to become the norm, it will be very hard for most northern American producers to compete with cannabis growers in Latin America, where the weather conditions are better suited to growing. All of the giant, high-tech facilities being built in Canada will then become obsolete and useless.
While this isn’t a big worry for consumers, it should be a major concern for the companies investing millions in these cultivation centers—and for Canada in general, as this could mean big losses to the now booming cannabis economy.
So should you go with large- or small-scale cannabis? The decision is yours. While big cannabis operations may offer better prices and a more consistent product, the personal touch of an old-school master grower cultivating craft cannabis has its own special appeal. Hopefully, there’ll be room for both styles as the market continues to expand.
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