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 struggling to sustain profitability. More than ever, being the low-cost producer is a vital predictor of longevity. But, how do you lower cost without cutting into your quality? As it turns out, there are several measures that will increase profitability. Here are 5 common improvements that I commonly implement when working as a Cannabis Cultivation Consultant for Kindling 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, it was perfectly acceptable. However, those of us who scaled up quickly in the early years of legalization, learned the value of a quality fertigation system many years ago. 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). The one thing that a person cannot do is perfectly evenly distribute the water to all pots. Humans inherently over water or under water unintentionally during every cycle. Automation makes homogenous irrigation easily achievable.
Stop buying liquid fertilizers: I am always surprised when I set foot into a cultivation for the first time and see a rack of bottled fertilizers sitting on the shelves. It also makes me smile, because that is the moment that I know I can instantly improve their costs. These days, just about every cannabis specific fertilizer line is available in “salt” form. This is in response to the demand of the industry to flower costs. Are bottled fertilizers bad? No, not at all. They are actually great in a sense because it is easy to measure out the volumes and by diluting the ferts in water, the system designer has lowered the incident of human error. In other words. If you were supposed to put 400mL into your tank, and you accidentally put 420mL, not a huge deal, everything is diluted down to increase the “therapeutic index”. My only real knock to bottles 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 dilution process and ultimately lowering the cost to ship the fertilizer to you.
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 good thing for us cuktivators. By switching to LED’s, the decrease in your electrical load is relatively substantial and the ROI on the lights is usually 18-36 months depending on the price and amount that you pay. 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 PAR level to the plants.
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. 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 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.
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