Keeping Pace with the Industrialization of Cannabis

The era of cannabis legalization has paved the way for its complete industrialization. However, in the new world of legal cannabis cultivation, the struggle to compete with other leading players in the space gets more difficult.

The number of people benefiting from cannabis products has multiplied, and consumers can more safely access high-quality cannabis. The liabilities of toting an illegal substance are gone, testing assures we’re consuming clean cannabis, and concentrated products are making consumption safer.

What’s more, investment analysts at the Cowen Group predict that the legal cannabis industry will be a 36.3 billion dollar market in the United States come 2026. Here’s your guide to keeping pace with the evolving industrialization of the cannabis market.

Expanding Pressures on Cannabis Cultivators

While commercial cannabis businesses are more hesitant to recognize the shift in the industry, the opportunity for profit is real. However, the growth in demand has put major pressure on cultivators. Supply has increased while profit margins have fallen. Even with the glut of quantity, product quality expectations have risen too. 

This isn’t a fluke or a trend. Consumers want exceptional quality and increased accessibility nationwide.

As a result of this, many smaller and boutique cultivators are being pushed out of cannabis production. Many 500-square-foot growers are going under because the 50,000-square-foot facilities can accomplish their goals cheaper and a hundred times faster. Some of those smaller operations, however, are expanding into those bigger facilities and even unlocking bigger profits. But how?

It’s not just economies of scale that are affecting the profitability of the bigger grows. Bigger grows are more likely to be investing in more efficient technology too. These new technologies provide cost savings, easier operation, security improvements, better assurance of the plant’s health, and increases in yield. The question becomes which technology investments are the most logical and beneficial next step for your operation.

Achieving Cost Savings Through Automation

In 2012, the term automation meant something different to cultivators. Back then, when growers used the adage “automate or stay late,” they were probably talking about hand watering. In 2021, the concept of automation presupposes an irrigation system. Now, automation means embracing adaptive environmental controllers, mechanical trimming systems, and agricultural-scale cannabis and hemp cultivation.

These new technologies improve the bottom line by reducing labor, reducing risk, or improving yield and consistency. Machines can be more vigilantly watchful for risks while improving product quality and consistency—all without contributing to increased labor costs.

The Benefits of Automated Environmental Controllers

• Better balancing of environmental parameters
• Data recording
• Electronic alerts for problems
• Better control of the growing environment

An environmental controller system aids in the balance of temperature, humidity, CO2 levels, air circulation, and sometimes lighting. As you may know, the growing environment is a balancing act. Software-based “controlled environment agriculture” systems cover all the bases at once, and good ones do it in a dynamic fashion. 

That means the controller adjusts one grow room parameter in response to another— like kicking on a dehumidifier in response to rising temperatures. They’re useful in monitoring the diurnal temperature swings and the changes in humidity and temperature that come with them. Machines can help keep those stomata open and the plants nourished during their growth.

Controllers provide labor savings by eliminating some of the need to monitor the growing environment, and they safeguard against crop loss. Some systems will send a text if there’s an issue or system failure. Receiving an alert about a failed air conditioner in the early morning hours is inconvenient, yet it can be crucial in preventing significant financial losses due to damaged plants.

Controllers should not supplant people altogether, and some generic recipe for environmental conditions throughout the lifecycle of the plant won’t be replacing attentive horticulturalists anytime soon. Data collection from various sensors, both within the canopy and in the soil, is simplified and becomes more efficient. While managing spreadsheets may not be universally appealing, their value is undeniable when they contain detailed data on key factors such as temperature, relative humidity, vapor pressure deficit, CO2, light levels, and soil conditions. Looking back on a previous grow improves future processes—and widens the profit margin going forward.

Implementation costs and the learning curve will be dependent on the equipment systems already in place at your grow site. Simpler units costing around $1,000 offer control of equipment related to temperature and humidity (fans, air conditioners, vents). Controllers costing ten times as much or more include irrigation, lighting, light deprivation system controls, soil condition monitoring, and control of multiple rooms and zones. The most significant hurdles to implementing these systems are the setup time and learning curve. There’s a liability in trying a new growing paradigm—especially when it will serve as the maestro for everything else.

You’ll want to work with a third-party crop consultant to analyze your facility before you make large investments. They can help you identify opportunity areas to work on first. Grab the low-hanging fruit before proceeding to more advanced controls.

The Benefits of Lighting and Lighting Controllers

• Safety from overheating
• LEDs provide electricity savings
• Compliance with time-variant electricity pricing

On a long enough timeframe, LED technology will likely eclipse high-intensity discharge (HID) lighting. It’s a case of the rich getting richer: the commercial cannabis grower that can afford LED lights will reap the dividends of a 50% reduction in energy use while those that can’t become less competitive. Couple that energy reduction with all the money saved on bulb replacements, and the arguments against LEDs seem weak. Opponents point to the product quality benchmark of traditional HID lights, but LEDs can recreate the HPS (high-pressure sodium) spectrum if that’s what you desire. And the best lighting spectrum may be yet to come. Ongoing LED-based spectrum experiments, particularly within the UV wavebands, may change yields for the better.

Sophisticated lighting control systems have safety shutoff features similar to environmental controllers. This reduces the risk of disastrous overheating from HID lights. When temperatures exceed a set point, controllers may dim the lights to reduce heat. Dimming doesn’t disrupt the photoperiod as much as turning the lights off entirely, but they’ll do that too if the temperatures keep climbing. Again, this is a safeguard more so than an ongoing benefit to the bottom line.

You’re probably already running lighting controllers to ensure your schedule works with time-variant electricity pricing. Running lights at the wrong times can cost hundreds or thousands of dollars a month. Utility companies jack up their prices during peak use hours to discourage strain on the electrical grid and, of course, to make more money.

Automated Irrigation and Nutrient Systems

• Efficient nutrient use
• Reduced staffing costs
• More robust plants

Automated irrigation is a cost saver both in terms of labor and materials. The labor savings of an irrigation system cannot be overstated. No large grows are currently hand watering. But now, inline fertilizer mixers have taken nutrient delivery to the next level (and reduced even more labor). Dosing is precise, and the mixing process is automatic, whether you’re using hydroponic techniques or growing in soil. Implementing an inline dosing system is simple and creates a quick ROI. However, changes in irrigation methods may require infrastructure changes and some significant labor to set up new drip lines and other equipment. Downtime is always a factor too.

Benefits of Machine Trimmers and Packaging Systems

• Reduced staffing costs
• Reduced risk of theft
• Quality control
• Easy to implement

Trimming and destemming are some of the most labor-intensive tasks of cultivation. That’s why trimmers were amongst the first cannabis-specific machines introduced—way back in the early 2010s. Industrial trimmers are an add-on subsystem that’s unrelated to central growing operations and a chance to get big cost savings without making changes to your overall grow.

The best cannabis trimmers outpace traditional human trimmers, and they come with some fringe benefits. In addition to paying for themselves in as little as two days, bud trimmers solve the feast-or-famine staffing issue created by sporadic, labor-intensive trimming. 

An industrial trimmer also protects you against theft. Using unfamiliar, temporary workers raises your risks of stolen bud—or worse—stolen cash. With a quality machine trimmer, one person can do the work of many. 

Additionally, the best trimmer designs provide a high-quality trim. Often, if human trimmers are still learning, the quality of their work is lacking. You only need to keep your best, trusted human trimmers on staff to take care of the “crow’s feet” that no machine can snip, and clean up any missed leaves.

Large outdoor grows know the practical issues that naturally come with a large staff of human trimmers. For remote operations with massive quantities of flower to trim, accommodations and conflict resolution are problems. If ten or twenty people are staying on your property, they need somewhere to sleep and something to eat. Arranging food and accommodations for a crowd of seasonal trimmers is a task unto itself—one requiring significant incidental resources of time and money.

Then, there’s the problem with reliability and consistency. It’s not uncommon for farmers to have to deal with trimmers who don’t arrive for their shifts on time, who finish early or even pull a no-show after a few days. Some of your trim crew will be experienced and offer perfectly trimmed buds, while others with less experience may produce erratic results and poorly trimmed buds. Inconsistency might not be a big issue on the black market, but the legal market expects higher trim quality.

Fortunately, there are various types of trimmers that support consistency. Batch trimmers allow you to trim a fixed quantity of flower automatically—without paying much attention to the machine as it runs. A batch trimmer allows technicians to focus on other tasks while the machine runs, such as bucking flowers, maintaining quality control by snipping crow’s feet, prepping for further processing, or packaging buds. The multi-tasking dynamic of a batch trimmer makes it perfect for operation by a single technician.

Throughput trimmers, on the other hand, are designed for assembly-line style work. Bucked flowers journey through a cylindrical tumbler and blades within the tumbler remove the leaves as they pass through. Technicians or conveyor belts feed fresh material into the machine.

Hand trimmers are still valuable and will always have a place in the cannabis industry. However, with the rise of large-scale operations, we are also emphasizing the importance of safety and knowing the workforce. The focus here is not on displacing jobs for hand trimmers, but rather on exploring the industrialization of the industry and the advantages of automation. 

In any industry, there is a balance between large-scale and small-scale operations, between boutique and commercial approaches. An industrial cannabis trimmer offers more than just payroll savings. It also reduces various risks and expenses. Given these significant benefits, machine trimmers are becoming essential for maintaining competitiveness in the evolving landscape of normalized cannabis use.

On a dispensary level, automated packaging systems are an innovation similar to machine trimmers. Labor savings are primary, and the ROI is quick. Other industries used automatic portioning machines that quickly package food and medicinal products based on weight.

So What’s Holding Automation Back?

New automation technologies are critical to staying ahead and leveraging economies of scale, but there are challenges for cultivators to overcome. 

Initial costs of new technology are always a hang-up when what you have is working well enough. The trouble is that many companies don’t see that the legacy technology isn’t working well enough. There’s a natural hesitation when it comes to new technology. But what many in the cannabis industry don’t realize is automation and controlled environment agriculture has been around for a while.

It’s a sure bet that what made sense for tomatoes and ornamentals will work for cannabis too. Some might say the biggest benefit of automation and the industrialization of cannabis is a greater quantity of cannabis—and they’re right. But as you can see, the biggest payoff for growers is a drastically reduced operating cost relative to yield. 

Some large (think 10,000 pounds a year) greenhouse growers are reportedly achieving production and packaging costs of $250 per pound. For a smaller indoor facility reliant on electric light and lots of labor, the overall cost of goods sold per pound is nearly double that at $470. The smaller facilities can only hold out for so long against that kind of competition.

The trouble for smaller growers attempting to make the leap into an automated greenhouse is financial. A 50,000-square-foot facility runs north of 5 million dollars, and most growers don’t have that kind of dispensable capital to use. Access to financing is the answer, but it’s a complicated one. The federal illegality of cannabis bars many traditional routes to “other people’s money.” The FDIC perceives cannabis loans as an unnecessary risk for the banks they’re insuring, so those banks steer clear. Venture capitalists and private investment firms are more lenient and eager to make the right investment in the new industry.

So, the path to a larger, more industrialized operation comes down to access to funding from private lenders. Winning their vote of confidence will take a strong balance sheet. The jump into larger facilities (and other people’s money) takes quicker cash flow and incrementally more efficient production methods. Smaller equipment investments that lower ongoing costs can boost your balance sheet and make your company more attractive to outside money. Packaging systems, industrial cannabis trimmers, and inexpensive safeguards against risks can create larger wins.

Keeping Up with the Rapid Pace of Industrialization

As industrialization continues to transform the cannabis market, smaller growers need to be able to adapt if they want to thrive in a competitive world. With cost pressures mounting, and customer expectations increasing, the traditional approach to cultivation may not be the right choice for your business.

Scalability in the cannabis industry, along with survival, comes from adaptability. A willingness to embrace the right tools, automation systems, and technologies in your processes could be crucial to success.

Cannabis and hemp automation technologies—once viewed as a labor-saving convenience—now make the difference between staying competitive and going out of business.

Of course, to keep up with multi-state operators, you’ll want to pick the technologies that address your opportunity areas and support your goals. It’s important to ensure you’re choosing reliable solutions that can effectively drive you towards your targets.

At Triminator, everything we do is driven by our desire to support and fulfill the needs of growers, searching for new opportunities to scale their businesses. Contact us to learn more about how we can help you compete with bigger brands and transform your cultivation efforts with our comprehensive range of cannabis and hemp processing tools and equipment.