As the cannabis industry continues to grow, more entrepreneurs are seeking opportunities to set up shop as commercial growers. In this business, the hurdles can be high – and frequent – but the payoff is often worthwhile: Some 60% of wholesale cultivators report their business to be “very profitable” or “modestly profitable.”
Cannabis cultivation facilities often come with steep startup costs, often well into six figures and sometimes reaching seven. The buildings must be up to code, secure, and optimized for production. Whether you are starting from the ground up or remodeling an old warehouse, surround yourself with experienced professionals who can help you make the dozens of decisions that go into building a profitable facility.
What to Consider when Building a Cannabis Manufacturing Facility
Here are a few things to keep in mind as you interview real-estate agents, architects, and general contractors for your new cultivation facility:
Zoning – State governments regulate the location and security of cannabis manufacturing facilities. Make sure you understand the rules before scouting locations.
Space – The building’s floor plan should provide ample room to grow, harvest, dry, extract, and package your products efficiently.
Electricity – Electricity costs are often staggering, due to indoor lighting use. The costs translate to approximately $750 for each pound of cannabis produced. Consider your lighting options carefully. LED bulbs have higher upfront costs than high-intensity discharge lights, but LED uses less energy, making it a more sustainable option and less expensive over time. Skylights and solar panels can help keep lighting costs down, too, but not all states allow them.
Wiring – A qualified electrician can wire the building to withstand the significant wattage increase. This not only provides uninterrupted cannabis production; it also protects the building from a potential warehouse fire.
Environment – For year-round cannabis production, the architect and contractor must consider the heating, cooling, humidity, and air flow that is right for your climate and the specific strains you plan to grow.
Security – States have minimum requirements in this category, too. Your security system should include video surveillance connected to your smart phone so you can check your facility 24/7.
Automation – Efficiency is key to a healthy bottom line. To keep quality consistent and costs low, consider automating temperature, humidity, lighting, watering, and fertilization.
Connecting With Experienced Partners
The right partners are clear communicators who have experience building cannabis manufacturing facilities. They understand how each piece fits into the overall picture for streamlined production, maximum output, and scalability. Here are a few tips for hiring an expert:
Do your homework. Your partners not only create the plan for your visions, they coordinate the details, such as the right time to bring in security vendors and when to order equipment. Make sure they understand the industry and its changing regulations. Ask for references.
Plan, discuss, measure twice, repeat. Once you’ve chosen an architect or contractor, make sure he understands the needs of your business. Hold regular meetings and walk-throughs to make sure you are both clear about each detail.
Get it in writing. Schedules change. Costs vary. You may want a specific feature in theory, then change your mind once you see it. You and your contractor should document each change in writing so you can remember why the final costs or timeline shifted.
Inhale…exhale. Building a manufacturing facility is a huge undertaking. The design stage alone can take two months. Patience and perspective from the outset will help the process go smoothly. Your efforts will soon be repaid in profits in this high-growth industry.
SIVA Enterprises is a full-service business development firm that provides consulting, turn-key management, venture opportunities, and brand acquisitions and licensing to cannabis entrepreneurs across the country. Learn why we have the highest success rate of approved cannabis license applications in the United States. Contact SIVA at (818) 562-3362 or firstname.lastname@example.org.