Sustainability–a word we are all familiar with and have seen thrown around in a variety of contexts and industries. The concept of sustainability has a history of multiple interpretations, applications and, it could be argued, misuse. More than 12 years ago, when “sustainable” was initially integrated into the building design arena, we marveled at the sparkling new world of sustainable design, sustainable buildings, and much more. The trouble was, no one could give a clear definition of what the concept really meant. This resulted in designers using “sustainable”–with each other and our clients–without fully understanding how to practically apply it. I was one of those designers.
For 15 years, I was in the heart of the Silicon Valley developing high-tech, biotech and other “tech” facilities as fast as I possibility could. Speed was the game, “sustainability” was just a name we stamped on things. Then I was introduced to the writing of John Elkington, a man who has become a leading authority on corporate responsibility and sustainable development. Elkington coined the phrase “triple bottom line,” referring to three green pillars of logic–people, planet, and profit–to address corporate social responsibility. He argued that any company that adopted this sustainable framework created a greater business value.
As I reflect on my more than 15 years of designing and engineering commercial facilities and how in a short time the cannabis industry has been a positive disruptor in the world of bureaucracy, the opportunity to learn and teach each other has never been greater. The current worldwide cannabis market is rapidly evolving, fluctuating and hitting critical mass thresholds. Now is the time to look inward and to adopt sustainable practices. Over the several hundred projects I have participated in since really internalizing and integrating Elkington’s logic into my work, I have developed a framework and understanding of what “people, planet and profit” means for our cannabis community.
People: the Social Bottom Line
We have a social responsibility to serve all with fairness and equity, whether customers, patients, friends, coworkers, or family. All of us share in the responsibility to create the cleanest and safest products. The social underground was the birthplace of the cannabis explosion, where, as a community, we shared ideas and educated each other on the next best method. Education in best practices is and always should be a cornerstone for the cannabis community to continue to evolve and grow.
Planet: The Environmental Bottom Line
We only get one planet, folks! Let’s focus on integrating measures to cut and conserve our natural resources and prevent unwarranted pollution. Waste in any form cannot and will not be tolerated in an open market and only the lean will survive through these bumpy times. Imagine the cannabis industry leading others in this way! As an industry, we are capable of designing facilities to grow plants, and to grow them well. But what materials did you use to build your facility? How can you optimize and conserve your power, water, and other resources? We are in an emerging industry where we can decide, without much outside influence, what should be considered best practice and share it with each other.
Profit: the Economic Bottom Line
Each of us, either as growers, processors, designers, or ancillary support services, are doing this to be fiscally sustainable as individuals or as companies. Early producers in new markets enjoy the limited supply that leads to high profit margins. But we all know that does not last forever. Inevitably, new producers are attracted to these new markets, lowering the profit margins. Making investments early on in energy efficient technologies and systems that help you conserve and best use your resources will sustain your business (and bottom line) in the long term, especially when those margins drop. A dollar spent wisely today (as compared to a few cents to get rich quick) can translate to many dollars in savings down the road. In the established markets of Colorado, Washington, and Oregon, we already see the market contracting and those who can’t sustain their operating margins are facing bankruptcy. Planning ahead can place you on the right side of the statistical curve.
Based on my experience in the cannabis industry and as a professional engineer, I would like to offer four predictions about the success a sustainable business framework using people, planet, profits can expect:
Cannabis will be federally legal within the next three to five years. While difficult to predict, we know that federal regulation and reporting will create many new challenges as well as potential market opportunities (i.e. “certified organic,” etc.).
When cannabis is federally legal, it is almost certain the US Food and Drug Administration (FDA) will be the regulating authority. Since 2016, the FDA started regulating all tobacco products, so the framework is already in place for them to regulate your friendly cannabis plant. If you’re producing medicinal marijuana, I highly recommend studying up on Good Manufacturing Practices (GMP).
The demand and market for clean and organic cannabis and downstream products will be more valuable in the short term, but will become the new normal, which may will reduce product margins.
The requirement for resource accountability will continue to increase, as demonstrated by California’s tough rules and regulation for cannabis due to their limited water and power supplies. Strained water resources and an outdated electrical grid have forced them to adopt these almost impossible rules. Government entities are inherently risk averse, leading them to look at pre-existing rules in similar regulatory backgrounds. Right or wrong, these rules and structures are often adopted by the rest of the country, specifically in emerging markets and specifically concerning human health.
I would like to share what I and my company, Rogue Sky, recommend as steps towards a sustainable mission for all growers:
• To ensure a business lifespan beyond three years, new grow facilities (both indoors and greenhouses) will need to focus on Total Cost of Ownership (TCO). This is determined by estimating total costs over a five- or ten-year basis then adding them to your initial start-up costs. Under the TCO model, your start-up costs will likely be higher, however you will have more control over your long-term costs and reduce the impact of market volatility affecting those costs. Plan wisely to spend money now to save your bottom line later.
• Indoor growers should consider a hybrid- or full-adoption of LED lighting. Don’t wait for the “next best” LED light, because perfection is always a moving target. We’ve seen great success with both full-LED systems or a hybrid between HPS and LED, but make a concerted effort to cut down the heat energy. It’s a win-win-win, with lower lighting energy costs, which equals lower
HVAC cooling costs. Finally, nearly all states have financial incentives where they will pay you for cutting your energy consumption. In some cases, a state of the art (grow) LED fixture can be less than what a new HPS fixture costs, or in a retrofit, the initial investment will typically be recovered in just a few months. Do your research and contact your utility provider.
• Invest in active wired or wireless monitoring for your facility. This includes space temperature and humidity, lights on/off, irrigation on/off, and soil moisture sensors. The cost of these systems is coming down and a data-driven farmer is one who utilizes the most powerful tools in a grow. Minimize your energy and resource costs by knowing where it goes. Also, don’t add to your workload chasing issues, get ahead of them and get notified before you’re in trouble.
• Indoor growers and, to some degree, greenhouse growers, should consider switching temperature and humidity set points towards a Vapor Pressure Deficit (VPD) algorithm (as long as you do not have existing pervasive disease and have already installed active filtration systems). This switch alone will allow a wider operating envelope for HVAC and dehumidifiers which translates to real-time savings. More importantly, we’ve seen healthier plants with greater yields as a result.
• Indoor growers should take advantage of off-peak power consumption by switching flowering cycles so lights turn on at 10 pm and off at 10 am. In most markets, electricity is cheaper at night and HVAC also runs more efficiently in cooler temperatures.
• In building construction, use metal studs and concrete whenever possible and look for low volatile organic compound (VOC) paints and formaldehyde-free materials. Metal studs can’t harbor bacteria or mold growth, plus they are forever recyclable. If you want to know what green building materials exist in the commercial world, look up the US Green Building Council. They focus entirely on buildings and are a massive resource available to anyone and everyone.
My favorite college engineering professor, Joe Harrelson,
had a motto for racing that applies perfectly to the emerging cannabis industry, “Whomever has the most things right, wins.” As we race toward nationwide legalization and getting the best products into the market, a sustainability-focused mission is not just the right thing to do, but it’s the best for all people, the planet, and your profits.