The legal marijuana business is growing rapidly, offering potential riches to savvy entrepreneurs who get in at this early stage. But for most growers, a major obstacle stands in the way. The indoor systems they use require massive amounts of energy--and, in turn, money--to keep running.

A recent study by researcher Evan Mills estimates that at least one percent of the total power usage of the U.S. is consumed by indoor weed grows. For industrial cannabis growers like Denver-based Medicine Man, which has a 60,000-square foot warehouse with 14 grow rooms, all that electricity usage adds up to a $40,000 bill each month.

As the marijuana industry matures, business owners increasingly are turning to a cheaper, more efficient alternative to indoor growing: greenhouses. They've forged a mutually beneficial (if somewhat unlikely) relationship with makers of traditional agriculture greenhouses, as well as several newly founded manufacturers. 

Greenhouse growers say migrating their plants out into the sunlight can cut energy consumption and costs significantly and increase each harvest's yield. Jamie Perino, co-founder of Denver-based Euflora, says her company was spending $15,000 a month on utilities before it moved to a 7,200-square foot greenhouse three months ago. Now the bills have been cut by a half to two-thirds.

"Denver has 300 days of sunlight a year," Perino says. "Why don't we harness that?”

Moving outdoors

Pot businesses have provided much-needed revenue for greenhouse manufacturers, who have had a difficult time recovering from the last recession. Jonathan Valdman, the owner of Nevada County, California's Forever Flowering Greenhouses, is perhaps most responsible for starting the marriage between the two industries. Cannabis plants need 12 hours of complete darkness following 12 hours of light to produce buds; traditional greenhouses cannot accommodate that, so in 2006 Valdman created a light deprivation system involving retractable blackout curtains.

One big challenge for greenhouse companies is changing the industry's mind on "outdoor weed." Pot mostly was grown outside before the DEA started aggressively raiding pot farms in the Emerald Triangle in the 1980s. As the law pushed the industry indoors, an entire generation of growers learned their craft as an indoor operation, Valdman says. Many consumers, too, continue to associate "outdoor" with bad weed because outdoor growers couldn't take care of their plants with the DEA's helicopters flying above.

But the benefits of the cannabis greenhouse could slowly change hearts and minds. Light deprivation greenhouses, the technical name for cannabis-specific greenhouses, enable four to six harvests per year, just like indoor grows. (Traditional greenhouses can yield a only single harvest.) Cannabis greenhouses can produce a pound of weed for $50, Valdman says, compared with $300 to $500 for indoor grows. A properly designed greenhouse also will prevent molds, pests, and diseases found in indoor systems from ravaging plants.

"If you're concerned about the bottom line, or the environment and carbon footprint, the journey is the same--the greenhouse," Valdman says.

The family business 

Conley's Greenhouse Manufacturing is a $20 million family business that primarily caters to big agriculture companies like Paramount Citrus and Wonderful Pistachios. But its greenhouses aren't only being used to grow fruit and nuts.

"A farmer in the Emerald Triangle told me they have been growing cannabis in a Conley's greenhouse for nearly 25 years," says Josh Conley, whose grandfather founded the business in the 1930s. 

After Colorado and Washington legalized recreational marijuana in 2012, Conley started working on his own light deprivation technology to accommodate cannabis clients. Conley's started to formally serve the industry that year, and soon it was bringing in 10 percent of the company's revenue. At the beginning of this year, Conley launched a new company, NextG3N Greenhouses, to focus exclusively on pot-centric grow systems.

So far, Conley has built close to 500 greenhouses for marijuana businesses in California, Colorado, and Washington. At some point, he says, the cost of growing indoors will become prohibitive and every grower will be looking for efficiencies. "There's no other crop that's grown inside for commercial agriculture besides mushrooms," he says. "It's not a matter of if the industry moves to greenhouses, it's when." 

The elevator pitch

As the commercial weed industry took off in Colorado and Washington, companies needed to find warehouses to grow legally. Eventually, warehouse space became expensive and hard to come by. That made some growers go outside and look up at the sun.

In 2012, Colorado-based Nexus Greenhouse Systems started to pitch cannabis growers, promising to cut energy consumption up to 75 percent, lower lighting costs by at least 25 percent, and increase harvest yields by a third, says Craig Humphrey, the company's vice president of engineering. Over the next couple of years, Nexus sold greenhouses to clients in Colorado, Washington, Arizona, Minnesota, and Illinois. And in August, it sold greenhouses to three of the five companies that were approved to grow medical marijuana in New York State.

To date, Nexus has built more than 400,000 square feet of structures for the industry and cannabis clients bring in 15 percent of the company's revenue. And while greenhouses are helping the industry become more energy-efficient, Humphrey says all the new clients have helped grow his company, and the greenhouse industry as a whole, in difficult times.

"Our industry is a little stagnant and it is influenced by the real estate market. We went through a long flat stage for five years until cannabis, which has given us a nice growth stage," he says.

Looking ahead, Humphrey, Valdman, and other greenhouse makers are betting the future will only bring more business for them, and more opportunity for marijuana growers. "There is a renaissance of people growing cannabis out under the sun," Valdman says. "There is no reason to grow inside anymore." 

 

Published on: Sep 3, 2015