Launching a new commercial grow operation is difficult, but destroying one is easy. People who are new to the cannabis space may have the best intentions, and their start-up plan may sound good to investors. But they often lack the experience and insight to realize their plan is leading them to disaster.
Fortunately, early mistakes are preventable. Here’s a look at five of the most common ways start-ups ruin their own operations. Avoiding these pitfalls can provide cannabis companies with the greatest chance for success.
Misstep #1: Hire a head grower with no experience
There is a strange phenomenon that occasionally happens to cannabis cultivation start-ups: New companies will raise millions of dollars to build or expand a cultivation facility but then put little thought into who will run the show. Last-minute hires are often unqualified, but they are viewed by management as “good enough.” Soon, this oversight proves both costly and embarrassing for the new company. The cultivation program suffers through avoidable mistakes and missed production deadlines, and word begins to spread that a well-capitalized company is struggling to make it through just one crop. Even if the company decides to replace the grower, the damage has already been done.
One of the reasons new companies invest little effort into finding the best grower is due partly to the myth that anyone can grow cannabis. After all, it’s just a flower, right? While that may be true at a small-scale, growing a few plants successfully at home doesn’t necessarily qualify a person to launch a commercial cannabis operation. That’s like starting a restaurant because you enjoy cooking at home for friends, or opening a mechanic shop because you can change your own oil. Hiring someone to run a 10-acre greenhouse and accompanying hemp farm because they grew 20 great-looking cannabis plants at home may not be a smart move.
When it comes to launching a new grow-op, companies should hire the best head grower they can afford. Anyone who thinks experienced commercial growers are too expensive should try calculating how much money is lost to avoidable mistakes, missed production goals and forfeited market share. If identifying an experienced cannabis grower is difficult, consider poaching a commercial grower from traditional agriculture and then supplementing their knowledge with cannabis-specific expertise from a consultant. A cheap and inexperienced grower is one of the fastest ways to bring a new commercial operation to a grinding halt.
Misstep #2: Micromanage your head grower
Sometimes unqualified growers are not seen as a risk to a new company because it is believed that a new grower can be kept in line by having upper management pitch in, oversee things and get involved. But even skilled growers can succumb to micromanagement if there isn’t sufficient trust on the team. I refer to this phenomenon as the “pancake effect,” when layers of management are stacked on top of the head grower like a suffocating layer of pancakes. Depending on the size and scope of the company, this could include the business owner, general manager, regional managers or multiple operation managers, all trying to influence day-to-day cultivation activities.
Micromanagement can seep into every facet of a head grower’s workday, from cultivation planning and decision making to purchasing supplies. For example, I was once hired to support a master grower who was not allowed to influence production planning. When I asked why he chose to manage cultivation activities in a certain way, he informed me that he was following orders from the company’s three operation managers, none of whom had formal cultivation experience. In another instance, a former client created a company culture that placed more emphasis on authority, control and scolding than on the act of cultivation itself. Progress was a challenge because all production decisions had to be funneled through a manager with no cultivation experience and who was seldom on site. A third client put so many restrictions on the purchasing process that it was nearly impossible for the head grower to acquire needed materials in a timely fashion.
People micromanage cultivation operations to remain in control of the business, but in reality, this practice has the opposite effect: It dampens creativity, hinders problem solving and drives many good employees to leave their jobs. Why hire skilled growers and then tell them what to do? Eliminate micromanagement by taking the time to hire excellent, trustworthy growers, and then let them do their job.
Misstep #3: Start with too many genetics from seed
One of fastest ways a cultivation team can become overwhelmed is by starting production with too many varieties. Beginning this process entirely from seed can rapidly compound problems. Saying that a company will grow 100 different varieties sounds impressive because it intimidates the competition and excites cannabis connoisseurs. In reality, however, launching cultivation with too many varieties can easily turn into a genetics nightmare.
Starting from seed requires a lot of refinement for each particular strain. Germinating 100 seeds of one variety could easily result in 50 or 60 different versions or “phenotypes” of that variety with contrasting growth habits, cannabinoid contents and flowering times. Refinement of these genetics requires a lot of time, record keeping and “banking” of mother plants until the flower cycle is complete and the dried flower can been analyzed. These mother plants take up a lot of space and often get neglected because they are in a holding pattern. Employees tend to do the bare minimum required to keep these plants alive because “we won’t be saving all of those, anyway.” This can increase the chances of insect or disease presence by the time a plant is selected as a keeper and slated for propagation.
Even in regular production, growing several dozen varieties in the same area can prove challenging for even the most experienced grower. Commercial cultivators often like to treat all plants alike because it helps to streamline automation and assists with planning work tasks like pruning, de-leafing and harvesting. But growing multiple varieties requires a grower to balance dozens of different growth habits, nutritional requirements and flowering times all within the same cultivation space. If you start with no more than 10 varieties, the process is manageable. But go overboard with too many strains and you will be sure to complicate the genetics refinement process.
Misstep #4: Implement a risky cultivation strategy
Selecting a cultivation strategy is a critical step that growers should complete well before they plant their first seed. Key factors to consider include regional laws, the type of final product and growing conditions. Start-ups often encounter many surprises, so a conservative growing plan helps to hedge the risk inherent in any new cultivation business.
A recent project of mine involved trying to convince a new cultivation start-up not to expand its facility using deep water culture (DWC). (For more on DWC, read “Are you Well Versed in Hydroponics?” in the March 2019 issue of Cannabis Business Times.) Experienced growers know that successful DWC operations require that all growing parameters be precise, such as water temperature, dissolved oxygen levels and constant recirculation of the nutrient solution. In my client’s case, the greenhouse was in a hot region of South America, and the grower had no experience cultivating cannabis using DWC. In addition to frequent power outages at the production site, there was no method for keeping the nutrient solution cool, oxygenated and recirculated. Not surprisingly, most of the grower’s plants died.
If a company can’t master growing plants using conventional methods, it will never do so using a more complex cultivation method. DWC is a very advanced growing process. When done successfully, crop time is shorter, fertilizer and water use are decreased, and the risk of soil-borne pathogens is eliminated. But problems in these systems can rapidly spiral out of control because grower mistakes or equipment failures can kill a crop in the span of a few hours. Selecting an advanced growing method and placing an inexperienced grower in charge of that operation can result in significant losses.
Misstep #5: Hire experts and ignore their advice
Outside experts are valuable to every industry, and they are especially helpful to start-ups in the cannabis space. Experienced cultivation consultants help new companies avoid typical start-up mistakes, which helps businesses speed their time to market and reduce costs. Experienced consultants can provide rapid solutions. Unfortunately, many cultivation businesses hire consultants only to ignore their advice. In my own practice, clients have questioned, modified and even rejected my recommendations. One client refused multiple design suggestions for a greenhouse in a hot region of Colombia. The client chose a different greenhouse design and ended up with a structure that was too hot to support healthy plant development.
Another client unnecessarily tinkered with the fertilizer recipe and then fed it to his entire crop, resulting in a severe nutrient deficiency that affected every plant in a 50,000-square-foot greenhouse. A third client did not take my advice to prune back stock plants to help manage a tight growing space and ensure viable cuttings for the future. A few months later, once the plants reached 7 feet tall, walking through the greenhouse became impossible, and the cultivation team wondered why cuttings taken from the neglected mother plants would not root.
As the industry matures, the level of expertise—from universities to consultancy firms—continues to increase. Take advantage of their advice and use their feedback to improve your processes and drive future business growth.