5 Things You Should Be Doing To Keep Cost Low In Your Cannabis Cultivation.
For the last 4 years, flower pricing has continued to drop, leaving cultivators like me working their @$$ off, yet still struggling to turn even the slightest profit. More than ever, keeping cost low is paramount if you want to make any money growing weed in 2025! But, how do you lower cost without cutting into your quality? As it turns out, there are several measures that will increase profitability, and when used with a well-designed system will also increase the quality of your product. Here are 5 improvements that I commonly implement when working as a Cannabis Cultivation Consultant and Fractional CCO for Kindling Cannabis Advisors:
Automate your irrigation: Paying people to water plants is so 2012. And by that I mean, when wholesale prices were in the $4500/lb range… However, those of us who scaled up quickly in the early years of legalization, learned the value of a quality fertigation system. The labor savings are clear cut and obvious to most cultivators (you will still get those old school guys who honestly believe a plant grows better when watered by hand). I find that, in addition to adding to the high cost of labor, humans inherently over water or under water unintentionally and thus it never makes sense to not install some sort of irrigation system. The payback period on a basic irrigation system is usually about 6 months.
Stop buying liquid fertilizers: I am always surprised when I set foot into a cultivation for the first time and see a line of bottled fertilizers sitting on the shelves. It also makes me smile, because I know I am about to instantly improve their costs! These days, just about every cannabis specific fertilizer line is available in “salt” form. This is largely in response to the demand of the industry to flower costs. Are bottled fertilizers bad? No, not at all. My only real knock to bottled fertilizers are that they are expensive. It cost a lot of money to ship all of that water around the country. When you buy the salts yourself, you are just skipping the pre-hydration process and ultimately lowering the cost to ship the fertilizer to you. There are several 3 part programs from reputable companies like RX green, HGV, and Ambrosia Cropz that offer great cannabis specific salt formulations, and if you have a 4 part irrigation system, you can always utilize our modified Jacks 3-2-1 with and MKP tank. I am running a side by side between HGV and RX Green right now, I’ll provide results when finished!
Make the Switch to LEDS: The prices of LED’s have been dropping at about the same rate as the wholesale cannabis market 🤦♂️. Which is a both good and bad for cultivators. When you switch to LED’s, the decrease in your electrical load is relatively substantial and despite the high upfront cost, the ROI on the lights is usually 18-36 months. In many parts of the county, we can help you qualify for grant money that will help or completely pay for this switch. To put these cost savings into perspective, consider that replacing a 1000W Dual Ended HPS with a 660W LED light, will lower your electricity bill by about 35-40%, while still delivering the same PPFD level to the plants. Recently, we were able to acquire 165 Fohse A3i’s (~$365k) for less than $9,300 for a client in Denver using a grant program provided through their local power company. These sort of incentives exist all around the country in some form or fashion.
Don’t Overspend on Testing: Any cultivator will tell you that their customers are always looking for variety. Dispensaries don’t want just four or five strains on their shelf. They want 16-30. For cultivators to satisfy this appetite for diversity requires a well thought out plan. In most states, each harvest batch requires a full panel of testing, which can cost upwards of $800! If you have 10 strains in each harvest, you would have 10 harvest batches and therefore have to pay for 10 panels. A financial burden of $8,000 per room. Proper planning in advance will allow you to keep a constant variety, while also minimizing the burden of testing fees.
Take short cuts on labor in every step possible: In this day and age, there is no reason to still spend expensive labor hours on mindless tasks, such as cleaning pots after each harvest, or transplanting 3-4 times per cycle. There are several cost effective options available to grow in a disposable single potted medium that can be thrown away at the end of the cycle and didn’t require additional transplanting (or “up-potting”) events. I just implemented 2 gal, 70/30 coco-perlite, disposable containers from RX Green and I couldn’t be happier. I’ll be doing a review of the bags soon!
To highlight the profound effect that these simple improvement can have on a company… Recently, I was hired by Level 10 as their Fractional CCO and using these strategies I was able to lower the employee count from 22 employees to 9 while increasing the canopy size by 75% (bringing on 3 more rooms). I lowered testing cost from close to $18k a month to under $1500, and lowered the amount being spent on bottled fertilizers by 92%. More importantly, I have dramatically improved the quality of product and yield. We have increased prices by 30% in a very competitive Colorado wholesale market.
These are just a few of the common mistakes or areas of improvement that I see and fix fairly consistently. For more details on any of these topics, feel free to reach out and I will be happy to explain further.
By Mike Thompson
Founder/ Senior Business Consultant