The U.S. hemp-derived CBD market is expected to reach $23.7 billion by 2023, up from the current value of $5 billion, according to Brightfield Group. Thousands of farmers are ramping up production in response to the passage of the 2018 Farm Bill (which legalized hemp at the federal level), the expansion of state industrial hemp programs and the promise of profits.
Farmers planted an estimated 288,000 acres of industrial hemp in the U.S. in 2019, up from 78,000 acres in 2018. The U.S., China and Colombia lead global industrial hemp cultivation in 2019 in the number of acres planted, according to Brightfield Group’s upcoming “Hemp Cultivation” report.
In the U.S., the profit potential of CBD is driving the growth in hemp cultivation, with about 87% of the 288,000 acres expected to be used for hemp-derived CBD processing in 2019. On a per-acre level, hemp for CBD could potentially generate $45,203 in revenue, compared with $773 for corn.
Updated on 4/23: This article was updated with revised national production figures. Colombia dropped out of the top 5 and France joined the top hemp producing countries list at number 5 (42,000 acres).
Flexibility and a high risk tolerance are important in hemp farming, as there are multiple challenges in growing hemp for CBD extraction, which include:
Difficulty obtaining certified feminized seeds and clones. Farmers looking for the highest revenue potential desire female hemp plants because CBD levels are highest in unpollinated female plants. Planting female clones ensures all female hemp plants, but the high cost and limited availability has restricted its use. With the shortage of certified feminized hemp seeds, farmers have purchased so-called feminized seeds without guarantees that they will be male-free or high in CBD content.
Labor-intensive crop. There is a lot of manual labor involved in hemp cultivation, especially during the harvesting stage. Because the industrial hemp industry is new in the U.S., options for hemp harvesting machinery are limited, so some farms are retrofitting their machinery to harvest hemp for floral material (where the CBD content is highest in the hemp plant).
Required expertise. Growing hemp for CBD extraction is not a row crop like corn and soybeans. Cultivating hemp for CBD is similar to tobacco and vegetables, with more spacing between plants.
Lack of traditional markets for selling hemp. The result is less price transparency, and companies that are not honoring agreements to buy hemp from farmers.
Risk of a “hot crop.” Industrial hemp crops can fail state agricultural department testing prior to harvest if test results show more than 0.3% THC by dry weight. The farmer is then required to destroy the crop.
Pollen drift issues and cross-pollination risks. CBD levels are highest in unpollinated female hemp flowers, while male hemp plants produce no flower. If male hemp plants, which are grown for fiber and grain, are planted too closely to female plants being grown for CBD, the male hemp plant can pollinate the female plants, leading to lower CBD yields as the plant expends energy for seed production rather than floral production. Similarly, the presence of male hemp plants can reduce the THC content of the female cannabis plant if pollination occurs.
Despite the risks involved with hemp farming, more U.S. farmers are expected to invest in hemp cultivation for the higher return potential from hemp-derived CBD. American farmers can capitalize on the growing demand for U.S.-grown hemp by marketing their CBD brands as “grown in the USA” or “locally sourced.”
Virginia Lee is CBD Research Manager at Brightfield Group. She develops and executes syndicated and customized research covering the U.S. and international CBD markets.
California's Illicit Cannabis Market Outpaces Its Legal Cannabis Market
Departments - Upfront | Fast Stats
A collection of recent statistics from around the cannabis industry, including a look at child cannabis use.
HVAC systems in action on L'Eagle Services' rooftop in Denver.
Photos by Meredith McLoughlin
Whether it’s extreme heat or bone-chilling cold spells, severe weather is always a potential issue for cultivators. Major weather events can wreak havoc on crops if cultivators aren’t prepared for the worst. Knowing how to properly manage heating, ventilation and air conditioning (HVAC) systems can make the difference between safely riding out the storm and a potential crop failure. Here are six tips cultivators should consider to prevent potential losses when extreme weather hits.
1. Know your local climate, and keep an eye on the weather forecast. In Colorado, we are no strangers to rapid, sudden weather changes, and they are common in many other major markets, as well. Blazing hot summer days, spring and fall thunderstorms and winter snowfalls can lead to disaster if you’re not prepared. Check forecasts regularly so you know what to expect and when to expect it.
2. Winter is coming. Try capping off your intakes. During winter, growers often completely cap off the intakes on the roof of their flower rooms. Pulling cold air from outside and pushing it into a hot flower room is a recipe for humidity spikes and dripping ducts. We pull the outside air into the veg room, let it warm up and then direct that warmer air from the veg room into the flower rooms.
3. Unusually hot weather? Consider regulating your air exchanges. Car air conditioners often have a recirculate function that cools the cabin faster by continually chilling already-cooled air. You can apply the same idea to your grow. Instead of using energy to cool outside air, focus on maintaining the already-regulated inside air. When you do need fresh air, pull it at night when it’s coolest.
HVAC systems in action on L'Eagle Services' rooftop in Denver.
Photos by Meredith McLoughlin
4. Don’t be afraid to run your rooms a little hot to take the load off your system. HVAC units should not run at 100% all the time. Operating your system at full blast leads to frequent and costly breakdowns. You can reduce maintenance costs and system downtime by running your system more gently by reducing fan speed and thereby increasing temperature. And a little extra heat in the grow room isn’t always a bad thing. Cannabis can handle some heat, especially if you’re supplementing with CO2. Anything over 85 degrees Fahrenheit is a cause for concern. Ideally, I like to keep my rooms around 74, so that extra 11 degrees is the wiggle room. However, hot grow rooms can lead to flower problems, such as foxtailing and yellowing, so monitor the environment closely.
5. Familiarize yourself with the vapor pressure deficit (VPD). VPD is the difference between the water pressure in the air and the water pressure within a saturated environment, when both are measured at the same temperature. This relatively simple metric helps you track your plants’ comfort much more precisely than just temperature and humidity. If you’re running your grow rooms a little hot, tracking VPD will help you foresee any potential problems with your grow and address them before they happen.
6. Always have a contingency plan. There’s no getting around it: Extreme weather puts a strain on cultivation systems and sometimes things go wrong. Power outages and broken parts happen. Consider installing a backup generator, and always maintain good relations with a reliable electrician and HVAC expert. Finally, consider running hypothetical emergency scenarios so you and your staff are fully prepared when extreme weather hits.
Meredith McLoughlin is the cultivation manager for L’Eagle Services, a cultivator and dispensary based in Denver.
17 Tips for Proper Pesticide Applications on Your Cannabis Crop
Columns - Hort How-To
University research proves to be an invaluable resource for safe, effective pesticide applications.
The actual application of pesticides is the most difficult task to perform in any integrated pest management (IPM) program. Even when the applicator has safe, reliable products and equipment, applying pesticides—especially if done incorrectly—is fraught with risk to workers, plants and the environment.
So how do you find reliable pesticide application information? Most likely you’ve relied on trial and error, advice from colleagues, the internet, or from pesticide producers. Are you satisfied with that information? If you’re like me, you’ve been tempted by silver bullets before: one mythical solution that will kill all the bugs and spores once and for all—something that will take the “management” out of pest management. After a few years, however, most of us learn that Jeff Goldblum’s character in the movie “Jurassic Park” was right and “life, uh, finds a way.” In other words, pests will always be with us. Unlike the rest of U.S. agricultural production, cannabis has not benefited from the U.S. Cooperative State Research, Education and Extension Service that is responsible for disseminating unbiased information from university testing to growers.
Extension specialists don’t just serve farmers and 4-H programs, but also nursery, orchard, hydroponic and greenhouse growers. Luckily for Cannabis Business Times readers, some of the first articles written by extension specialists related to cannabis (other than hemp) have been published in this magazine. Dr. Brian Whipker and Dr. Brian Jackson of North Carolina State University have written on plant nutrition, and Dr. Raymond Cloyd of Kansas State University reported on using biological controls in greenhouses. They’ve also spoken at the Cannabis Conference.
This should not be taken for granted. Many of their counterparts are not allowed to contribute information to our industry. If your company touts a commitment to implementing commercial agriculture or horticulture methods, these articles should be required reading for your staff, as the partnership between U.S. industry and academia is what created that methodology in the first place.
I’ve relied on the insect control advice of Dr. Cloyd for decades. Likewise, I’ve been fortunate to have plant pathologists provide similar advice for disease control measures and university specialists on pesticide safety and environmental protection. Here are 17 tips for proper pesticide applications based on expert advice and information my pesticide applicator teams and I have implemented in our greenhouses and grow rooms during the past three decades.
1. Use products compatible with your biological controls. Several producers of beneficial insects have “side effects” links on their websites that allow you to determine if the product you are going to apply will hurt or kill your beneficial insects. From the menus, simply click on a pesticide and then on the beneficial insects you have released or plan on releasing. The app then displays toxicity information for each life stage of the beneficial insect. These are incredibly useful tools, and using more than one app improves the scope of your search. Follow this link for an example: bit.ly/Koppert-side-effects.
2. Read and follow the label. After you’ve read a couple of these, you’ll be able to get through the legalese quickly and discover some very important information that will improve the effectiveness of these products or prevent plant damage. Go online and print PDF versions of these. Make a binder of them and their related Safety Data Sheets, highlight pertinent information and keep them at your fingertips.
3. Use reverse osmosis water to make your spray solutions. Poor-quality water will render some pesticides ineffective very quickly. For example, many pesticides lose effectiveness above pH 7. If you don’t have purified water available, test your final solution and adjust pH to what the label recommends. When in doubt, adjust to a range of pH 6 to 7.
4. Focus. Whether it be for insect or disease control, focusing on adequate spray coverage of all leaf surfaces is key. This doesn’t mean overapplying and wasting product but using the proper techniques and tools that allow the applicator to focus on this goal. The work environment plays a part in focus, as well. In my experience, the best way to obtain excellent coverage is to provide your applicator a comfortable, unhurried environment to work in. We changed our application time to early morning to avoid the heat that builds up in a greenhouse by day’s end and to avoid the fatigue of spraying after a full day of tasks. We make sure personal protective equipment (PPE), including boots, gloves and masks fit well, and keep spares of all PPE so clean, unbroken items are always handy to use. We stopped using lab goggles and moved to approved face shields that would not fog up and reduce vision, and to light-weight, disposable lab coats.
5. Bring a co-pilot. Whether using a small 2-gallon sprayer or a large “war wagon” hydraulic pump sprayer with a reel of hose to lug around, it really helps the applicator concentrate if a second person can move things out of the way and watch for tripping hazards. He or she can make sure doors are locked and signs are posted for restricted access and help with the cleanup. Remember, this assistant needs to wear the same PPE as the applicator.
Courtesy of Robert Eddy
6. Consider a cold fogger. A cold fogger is an ultra-low volume (ULV) sprayer that ejects a 10-foot to 12-foot stream of spray droplets about 25 microns or less in diameter. These fog droplets penetrate dense foliage and adhere to the undersides of the leaves. They also persist in air longer than a liquid spray, so insects are exposed for a longer period. The cold foggers are available as handheld or fixed-position units on a wheeled dolly. I’ve used a fixed-position cold fogger with a timer, so it can come on at night when the room is locked and empty of employees, reducing worker exposure and labor. ULV sprayers come in multiple sizes to match the size of the room. They use only a fraction of the volume of spray solution—about 2 liters for a small room—but the amount of product you mix into that 2 liters of water is the same as you would mix for a normal hydraulic sprayer, so it’s very concentrated. Because of this, do not direct the fog directly at plants. If you are applying microbial products, always use a cold fogger rather than a thermal fogger, which heats up the spray solution to a temperature that would kill many beneficial fungi. Check with the manufacturer to determine which products work best in cold foggers, as some formulations may clog or damage the nozzle. I’d recommend paying a little extra for a stainless-steel nozzle upgrade. My technician at Purdue University attached a portable cold fogger to a wheeled cart so he could move it into different positions and adjust the height of the fog stream.
7. Use cold foggers in combination with circulation fans. Turn off the circulation fans for the first 30 minutes of fog application. Then, leave them on for at least two hours following application. This will improve fog penetration into dense foliage.
8. Understand the drawbacks to cold fogging. Cold foggers may pose a greater risk to workers because the fog droplets can be inhaled more easily. Fog is almost invisible, so lock the room and keep workers away. You may need to clear adjacent areas if the room is not tightly sealed. Cold fogging takes much more time to distribute the solution—as much as two hours for 2 liters for a fixed-position unit. As stated above, not all pesticides are suitable for cold foggers. Lastly, you can’t choose to just spray a small area—it’s the whole room or nothing at all.
9. Let your environmental control system assist you. Many environmental control systems (ECSs) have pesticide programming features that allow you to change the environment before, during and after the application. For example, the circulation fans during a cold-fogging application can be programmed to turn off and on automatically. Then, after a proper number of hours, the greenhouse can be ventilated so that it is ready to be entered when staff returns. For spray applications, the temperature of the room can be lowered while the sprayer is inside to keep them comfortable as they focus on coverage. The convenience of this programming is that it is timer-based, so it will return to normal setpoints without your input.
10. High temperatures require more frequent sprays. Just as high temperatures speed the growth rates of plants, insects also complete their life cycles faster. Frequency of sprays will need to increase during warmer greenhouse temperatures, or if you increase the temperatures of your indoor grow room. In my greenhouses, weekly sprays suffice during most of the year, but in the heat of summer we learned we needed to spray every five days.
11. High temperatures can lead to spray damage. Spray applications that are perfectly safe and effective in moderate temperatures may cause phytotoxicity during extreme temperatures of 85 degrees to 90 degrees Fahrenheit. This is particularly true with oil sprays.
12. Avoid multiple sprays of insecticidal soap. If you are permitted to use insecticidal soap in your state, avoid more than two applications to a crop. The soap accumulates on leaf surfaces and causes a toxic response. Like all phytotoxic responses, some cultivars are more affected than others.
13. Don't spray and pray. Conduct phytotoxicity tests. Test any pesticide you’ve not used before on a small set of plants of each cultivar. If you are in a hurry, mix up a small amount in a pump sprayer and spray two to three plants of each cultivar, flagging the plants as you go. Wait for three to five days to see if the product causes damage. For a more formal approach, set aside nine plants of each cultivar and spray three with water as a control, three with the product at a label’s low rate and three with the high rate.
14. Consider a fume hood for your mixing area. If you’re designing a facility, consider installing a fume hood, like those used in tissue culture labs, in your pesticide storage area. It provides a safe place to handle wettable powders and liquid concentrates and also will draw away any bad odors from the storage room if you let it run continuously.
15. Mix your spray solutions thoroughly. A commercial mixing agitator will ensure thorough mixing of concentrates into a large volume sprayer. In a pinch, you can devise your own. We rigged a metal mixing paddle into the drill-bit hole of a standard power drill with a locking activation switch. This was much cheaper and lighter than the commercial agitator. Let it spin on a low speed while mixing pesticides in the spray tank.
16. Go lightly on those adjuvants. You can mix substances called adjuvants into a spray tank to improve pesticide performance. Adjuvants include spreader stickers, which help solutions stick to leaves, and surfactants that help the solution spread out into a fine film on a leaf, effectively increasing coverage. There are other types of adjuvants on the market, and there are several “synergists,” as well, that are supposed to improve the effectiveness of pesticides. The problem with adjuvants and synergists is that they can cause damage to leaves and flowers more readily than the active ingredient of the pesticide. In fact, most phytotoxic responses from sprays are not from the active ingredient but the inactive ingredients the producer used in the formulation. Many commercial pesticides already have these adjuvants in them in proper amounts. Adding more can cause an overdose. Therefore, only apply surfactants if the label suggests it would be helpful or if you’ve done your own phytotoxicity tests.
17. Get licensed. Commercial greenhouses, nurseries, farms and orchards are required to abide by the Worker Protection Standard (WPS), enforced by the U.S. Environmental Protection Agency. This law requires growers to provide training and information to workers at agriculture facilities about the dangers of pesticides and of heat stress. It came about after many tragic accidents, such as migrant workers using empty pesticide containers as water bottles, which is why pesticide warning labels are bilingual. All workers must have awareness training, and all applicators must be licensed in application safety, pesticide knowledge and environmental safeguards. Testing is required for the license and recertification every few years, depending on the state. Though the WPS is not apparently enforced in the cannabis industry, I believe it will become mandatory once the crop is federally legalized, because the program is well established. You can receive training and testing at state land grant universities. See the WPS Guide here: bit.ly/WPS-guide for more information.
For more on proper pesticide use, read Dr. Raymond Cloyd’s (et al) guide “Using Pesticides in Greenhouses” here.
Robert Eddy is director of Ag Projects for Core Cannabis in East Lansing, Mich.
Avoiding the Race to the Bottom in the Competitive Cannabis Marketplace
Features - Business
Cannabis cultivators share their top tips for staying profitable in an evolving market.
A cannabis business’s profitability can fall fast if owners don’t know how to adapt to the ever-changing market. Market saturation and new customer buying habits can drive prices down and have a significant impact on business strategies. Cannabis Business Times discussed these issues and other trends with three cannabis industry leaders during a panel discussion at the 2019 Cannabis Conference in Las Vegas. The panel participants shared lessons learned and key insights based on their real-world experiences at the conference, which will once again take place in Las Vegas April 21-23, 2020, at the Paris Hotel & Casino.
Panel participants included Leif Abel, co-owner, Greatland Ganja in Kasilof, Alaska; Jesce Horton, founder, LOWD in Portland, Oregon, (and previously founder/CEO of Saints Cannabis); and Scott Reach, founder/COO of RD Industries/Rare Dankness in Denver.
Here are some highlights from the discussion and tips to help other growers thrive in an increasingly complex marketplace.
On Controlling Production Costs
Reach: For us, automation has been very key. A facility of my size, 54,000 square feet—30,000 square feet of canopy space—typically, in Colorado, has between 80 and 90 employees. I effectively run that much space with nine workers, so a lot less overhead on the employment aspect. Throughout my entire company—dispensary, lab, processing, cultivation—there’s a total of about 40 employees. ... So one of the ways that we’ve been able to be cost-effective and been able to just step into a very mature market in Colorado has been through automation and just efficient work practices.
Horton: I think the most important step is how you design the facility. A lot of us are [in] situations where we have to retrofit a facility, a warehouse, whatever that may be and turn it into a cannabis cultivation facility. And a lot of us … have limited budgets. … I think everyone would definitely do themselves a real service if [they thought] about the workflow of what’s happening in that facility. Where is a product moving? How much time are people spending doing their tasks? Are you doing time studies, traditional industrial engineering type of methodologies … to really understand [if] everyone [is] doing things as efficiently as possible?
Abel: For our farm, it comes down to automation and any HR improvements, and improvements in processes that make people more efficient or make it so that a job that was done by a person before can be done by a machine, and then, conversely, you have the side effect of then your people being able to concentrate more on the plants. For us, automation means … automated watering. If you’re not automating your watering, it’s insane the amount of labor you’re going to spend on growing your plants.
Left to right: Scott Reach, Jesce Horton, Leif Abel
On Operations and Selling Value
Reach: In our facility we’ve … made quadrants of every process or flower room. So we make sure that our growers that are involved, or other workers that are involved within that quadrant, understand fully the tasks that are involved within their job description and don’t worry about everything else that goes on within the facility. We give monthly retraining and monthly updates throughout the facility just to keep everybody on the same page. … Keeping all your workers aligned, on task, pushing for the same goal, without worrying about the day-to-day fires that have to be put out, I think, is extremely important.
Horton: You have to be selling on value. You cannot sell on price. If you are trying to survive and trying to essentially beat these bigger players who have the ability to just sell on price, then you’re going be struggling, but if you have the ability to really understand what value you provide—not just to the market but also to your dispensary owner. … Once you’re able to provide that value, then you can do things that other cultivation companies may not be able to do, and essentially you become a partner to that dispensary owner.
Abel: You have to sell more than just cannabis unless you want to be a poor cotton farmer. It’s just that simple. … In order to create product lines, you have to be creative, and you have to have a team that kind of understands what that means. From a cultivator perspective in Alaska, and probably in a lot of places, cultivators can only do so much. … If I’m just selling raw material, I will be at that race to the bottom. We want to sell all these extra services to the retailers.
On Forming Partnerships
Horton: Do you even know what problems that retailer is experiencing on a day-to-day basis? Do you know what they [retailers] really care about? Have you ever asked that retailer, “Hey, what type of problems are you dealing with? What type of solutions ... are working? What types of issues are keeping you up at night?” And there’s your pull right there of how you become a partner for just that simple question of delving down into what bothers [them], and how [they can] become better.
Abel: In our market, partnering and having joint venture agreements with processors is just as important. So another thing that I bring to retailers are specialty products. Our company is really good at helping processors create really unique, innovative products, and then branding it properly, so that retailers have customers coming in and asking for [that product], and then they want to buy it.
Reach: Compliance is becoming such a difficult part of the business that I think a lot of people don’t put enough effort into because, ultimately, if you’re not in compliance, you’re risking your licensing, you’re risking your employees, you’re risking your livelihood. So from the compliance aspect, I went out and actively searched for a partner that would complement me in the areas that we were lacking, which was full compliance, distribution. Once national distribution opens up … having [partners with] deeper pockets than I do is always a benefit.
Horton:As you’re talking about building your brand, I guarantee there are community organizations that align with where you’re going, and you partnering with them would help them to move forward but also would help you and your company to move forward as well. So there is a nonprofit in the city of Portland called the NuLeaf Project that essentially takes money from … the city’s cannabis sales tax and helps to allocate that money toward that organization, which helps get more people of color employed in the cannabis industry, helps black and brown business owners with small grants and things like that to get them more involved in the cannabis industry.
On Key Lessons Learned
Reach: Don’t be so influenced by external noise. Stay true to what your mission is and what your business plan is. ... If you have … something that stands out that adds that value, [then] you can ask for a dollar more or two dollars more or whatever. It’s going to be accepted, and it’s going to be appreciated ultimately as the consumer gets more educated as to what’s actually on the market. For us, it’s just evolve, adapt, overcome. If you can do those three things, you’ll be just fine, no matter what’s going on. If you can’t be fluid, and evolve and adapt, you will go out of business very quickly.
Horton: The first thing I would say is know your market. Really understand the market. Take the time to get involved with industry associations, make networks to understand that market. … Know where you play and know your value; then you can price your product appropriately.
Jonathan Katz is Managing Editor for Cannabis Business Times and Cannabis Dispensary magazine.
Legislative Map
Cannabis Business Times’ interactive legislative map is another tool to help cultivators quickly navigate state cannabis laws and find news relevant to their markets. View More