Scaling up a Boutique Grow Operation
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As most growers are aware, scaling up a grow operation is a daunting task. For that reason, this is one of the most requested Growers Spotlight articles.
There are a large number of concerns that go into scaling up a grow operation, which we will explain in more detail below.
Here are a few of the factors that need to be considered when scaling up. Each individual point has multiple facets to it.
- State licensing and restrictions
- City permits and restrictions
- Building permits and building codes
- Budgetary limitations
- Time limitations
- Are you growing to meet demand?
- What is your business model?
- New equipment
- New personnel and training
- New technology and implementation
- Pest management regimen
- Electrical systems and power consumption
- Plumbing and irrigation
- Scheduling during construction
- Oversight during construction
- Coordination of communication
We treat every plant individually.Mike Leibowitz
Initially, we occupied half of a 24,000 sq ft building. We were attracted to it because it had small rooms where we could employ our small, boutique style of growing. We were able to maximize our environmental control and cycle our harvests. The modularity of multiple small rooms meant that we could make a cleanroom, a planting room, a harvest room, and scale it up by building out more rooms.
We eventually started to gain popularity. Our initial company, Care Harvest, became so popular that dispensary owners would pay us for plants that hadn’t even been harvested yet. The Colorado market was saturated and overcrowded, but our product really stood out.
We decided we needed to step up and do more. We created a brand (Veritas Cannabis) that rocketed into the popularity we’re enjoying now. We wanted to focus on quality, and that’s why we white-labeled it.
Because we have a boutique style, we try to stay away from the automated systems that most hydro growers rely on. We treat every plant individually. We set up each pot individually because all plants absorb water and nutrients differently. We hand-water them to meet their individual needs.
As for environmental controls, we’re obviously using a thermostat and a humidistat to monitor humidity and temperature. We have sensors to monitor our CO2. We can set the parameters for each individual room. We also monitor every aspect by hand, which is the best way to be confident. We have a check where an employee comes into each room a minimum of twice a day to check environmental factors.
In our new expansion, we decided to use a computer system to automatically collect analytical data. Now we get alerts when we have high temperature shutoffs from things like an air conditioner going down. These technical factors really help, but we still grow by hand because that is the sure thing for our success.
About 2 years ago, a fireman got sick from an improperly fumigated room, and the state changed the laws drastically. Now, you can only use pesticides from a small, constantly updated list produced by the Colorado Department of Agriculture. We had to revamp our pest mitigation strategy.
We started using pesticides that were never intended for use in an emergency, which we had previously only used in a maintenance role. Because of this, we primarily use the allowed pesticides in a preventative maintenance schedule. These products require more labor than what we used previously. We’re spreading rosemary oil, cayenne peppers, and more, all of which degrades faster. It’s labor-intensive and expensive because they require more frequent application.
We’re seasoned cultivators and we’ve always stayed on top of it, so it hasn’t been a huge deal. But the game changed a few years ago, and we had to adapt.
It’s up to cultivators to use pesticides properly. Cultivators should take classes and courses so that everyone understands the proper ways to use them, handle them, and dispose of them.
The Process of Scaling
We knew exactly how we wanted to build, how we wanted to focus our efforts, how we wanted to scale up, and it was all very natural.Mike Leibowitz
Speaking of which, ramping up to a full-scale environment requires a significant amount of time as you grow. It’s not like a normal job. You have a much tighter schedule. Luckily, one of my business partners is an incredibly bright, meticulous fellow who has run our facility like a military outfit. When we designed the 16 boutique small rooms we have, we had to maintain a rigorous schedule to not fall behind or let plants spoil and die. That’s where we’ve really excelled. I would say one of our best attributes as commercial cannabis cultivators is our ability to schedule.
Colorado is a relatively small industry. Despite how fast it’s grown, everybody knows each other. We generally find new hires through word of mouth. We’re also doing some local hiring in our community.
Anybody can cook. It’s easy to throw an egg on a stove and cook it. But it’s challenging to cook a perfect omelet. We feel the same way about cultivating marijuana. It’s easy. You can grow weed, get a harvest, smoke it, and get high. But to grow great cannabis is a very time-consuming, labor-intensive project.
It’s been a challenge finding the caliber of people we’re looking for. A growing job can be perceived as boring or challenging and exciting. We’re looking for people who see it as challenging and exciting and have a passion for the plant. I look for passionate people, often younger people, who know they’re going to do very hard work for a long time because they love the challenge. They love taking a small plant and watching it form into a beautiful, gorgeous, full-leafed, bud-crystallized plant. That’s what motivated me when I worked in a garden for 5-6 years. We’re passionate about what we do. That passion supersedes the hard work and long hours we’ve put in.
We have a very hands-on approach to employee training as well. We actually almost prefer people with zero or little cultivation experience, because they can be malleable. Our process has a mentor watching over you, giving you tasks, and checking up on you. We don’t throw a book at people and tell them to learn. We are very hands-on.
Each room is its own growing atmosphere:
- We have a dedicated air conditioning unit for each room. Per room with 24 lights, we have one dedicated ten-ton air conditioner.
- We monitor the CO2 in each room. There’s a CO2 control deck that allows us to monitor the CO2 intake.
- In each room, we have an exhaust fan, as well. We exhaust air during the night cycle to reduce humidity.
- In certain rooms we have dehumidifiers, and placement varies according to where each plant is during flowering. We dehumidify mostly towards the end of the flowering cycle. Within the last month of flower, the bud gets denser and creates more humidity.
Agencies and regulations can hamper your growth. When you work in the cannabis industry in Denver, you have to deal with a pool of regulators: the City of Denver, the Fire Department, the State of Colorado, and the Marijuana Enforcement Division (MED). Some of these agencies and departments have overlapping rules that contradict each other. For example, the MED may want secure locks that open in a specific way, and the fire department wants the doors to open another way. Sometimes it gets crazy, but it always ends up working out.
You will also run into unexpected timing issues, which lead to increased costs and lost profits. For example, you’ll be waiting for a bunch of lights and when they get installed, you’ll realize you need a power upgrade. Then you have to wait for the power company, and they’re on their own schedule. Their electricians, of course, will take longer than predicted. Throughout the whole process, the cost of equipment is changing, the engineers are going back and forth, and there are small, constant interruptions.
To be completely honest, we could not have done it better on this last buildout. We’ve been through the process of building out several times, and we know what we’re doing now. We could not be happier with the results we’re having.
Another success we’re experiencing is that we’re picking up a lot of organic traction. We formed Veritas to showcase the quality of what we do, and nearly every day I’m doing another interview. People are starting to recognize the quality of our brand and our consistent style and packaging. It’s humbling to watch our hard work paying off.
I would advise any business owner to curb their expectations. You will need to explore the needs of growing and balance them against your budget. Expect delays. Expect price increases. Expect to spend more than you have budgeted. Hope for the best, but prepare for the worst.
Throughout the whole process, communication is critical. As the commercial cannabis industry has evolved, uncertainty and unpredictability have become the status quo. That’s why Veritas conducts regular, biweekly meetings. We’re constantly making sure we’re growing properly and correcting mistakes.
You should start the scaling process by asking yourself some questions: What is your business like? Where are you located? What is your business model? Do you want to grow as much weed as possible as fast as possible, or do you want to grow quality cannabis? Do you want to do both? Your budget and your preferences change how you grow your business.
Most importantly, what is everybody else doing? For example, if you have one of 10 licenses in Massachusetts, you don’t have a lot of competition. You can focus on quantity over quality and be successful.
If you’ve never expanded before, take the time to learn how to build a grow. You’re going to have a lot of trials and errors. If you don’t have the time or money to learn and make mistakes, then hire a consultant.
Editor’s Note: Mike is offering Veritas’ services as a consultant! See below for more details.
I’m excited about growing our brand. We love our strains. Our end products are revered as some of the best in a very competitive market. We want to continue what we’re doing, strive to get better, and hope that we’re not limited by the new federal administration.
Do you have any questions or comments?
Want to get in touch with the Veritas Cannabis team for consulting?
The Veritas team can consult for you. We have several people with the skills you need to grow, from our lead cultivator who has many years of operational experience, to a real estate expert who understands the minutiae of permits, to a financial partner with years of experience doing both client and administrative work. We have a full service consulting business. If you want to get in touch, reach me at [email protected].
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About the Author
Hunter Wilson is a community builder with Growers Network. He graduated from the University of Arizona in 2011 with a Masters in Teaching and in 2007 with a Bachelors in Biology.