cultivation cost control

Cultivation Cost Control: The Competitive Advantage

by | Aug 16, 2018

cultivation cost control

Written by Bryan Sherman 2

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Cultivation Cost Control and Quality Control are two sides of the same coin. With the increase of supply surpassing the increase in demand, Cannabis is becoming a commodity. As the wholesale price continues to fall the companies that will survive will be the ones with the lowest cost of production and the most consistent quality.

Cultivation Cost Control – Energy Management

The Utility industry is reeling from the extraordinarily high electric demand required by cultivation operations. The Electrical infrastructure in the U.S. is in major need of an upgrade. If you check your electric bill, in most cases the Transportation and Delivery (T&D) cost is higher than the commodity charge. Publication after publication explains the high cost and environmental impact but the only thing most of them address in the way of solutions is to talk about the lights.  The lights do play a major role: however, from what I see everyone is looking with blinders on. Suppliers focus on their niche – nobody is looking at the big picture.

Energy is an ever-increasing operating cost that is often ignored because it is considered inevitable and often only a fraction of the product cost. Not true in the cannabis cultivation industry – energy can be as much as 50% of the cost of the product.

A holistic approach, from a thermo-economic point of view, doesn’t just look at the First Law of thermodynamics (the law of energy conservation) but also the 2nd Law (the law of energy quality). This requires an intrinsic understanding of Psychrometrics (the study of moist air) and all the ways to control it. But science alone is altruistic. So, the best science/solution for a specific requirement is the one with the best cash flow; the highest NPV (Net Present Value), and the lowest LCC (Life Cycle Cost). Follow the Money, It Is Always About the Money!

cultivation cost control

Cultivation Cost Control – Reliability

Reliability is another issue. What is the cost of losing a crop? How much is it worth to have redundancy? Power loss can mean crop failure due to loss of light cycle or mold, mildew, and bud rot from loss of humidity and temperature control. By integrating redundancy into the design, the backup systems can actually be part of the day-to-day operating systems. Integrated design lowers the first cost as well as the operating cost.

For example; instead of putting in two pumps (one for a backup), install three pumps that are half the size; 150% instead of 200% for the same 100% reliability. Now there is better part load efficiency and 49% energy savings at full load by using all three pumps.  In addition, this strategy, when properly designed and controlled, will provide equal run time on all pumps assuring that the redundant system will function when called upon. Why? Because when backup pumps sit idle they often fail.

Plan for the future! If you think you might grow and want to expand, plan for it! Design systems that can be built upon. If you have a good design expand upon it, it will be more cost-effective than starting over. It works well and has adequate redundancy built-in; now all you must do is add “N” to the existing “N+1” design to maintain your reliability and efficiency.

I have looked at what is being done in the cultivation space and it makes me sick! These industrial processes are being treated like an office space, a data center, or at best a hospital. They could not be made more inefficient and the control could not get worse. If these systems were designed by a knowledgeable engineer, they would have less – and better – equipment, use significantly less energy, and be more Reliable.

Cultivation Cost Control – The Solution

The solution is to look at the actual source of the load and determine the rate of change it causes to the environment. The variables with which we are concerned are the temperature and water content of the plants. Water is added to the roots and it flows up through the plant and into the surrounding space. The conditions of the surrounding space dictate the mass flow of water through the plant. Understanding the load is the first step.

Knowing what needs to be accomplished is the next. At this point, nobody really knows the best psychrometric condition for cannabis at its various stages of growth. Why? Because nobody has yet built a system capable of achieving the precise control necessary to figure it out. All of the current data is anecdotal. However, the anecdotal data provides a starting point for collecting real-time quality data.    

A properly designed system for this application would have 100% redundancy without having two of everything. It would use half the energy and most of what it does use will not be from the grid. The keys to achieving Precise Control of temperature and relative humidity (± 1ºF & 1% RH), lowest $/SF, and a sterile environment are a real-world working knowledge of Psychrometrics, the 2nd Law of Thermodynamics, and the Fluid Dynamics of compressible flows.

The current designs are manufacture-driven; manufacturers of the products used, “sell” their product attributes to engineers and designers who in turn use those products in their designs. They are essentially taught how to apply the products, by the vendors then they do.

The correct way to design these facilities is to look at all the parameters elucidated above along with all available energy sources. Then, play with the numbers until you find the best solution for the client. That means teaching the client what they need to know to make educated decisions that will best meet their needs, wants, and desires; enabling them to meet both short and long-term goals and objectives.