Marijuana greenhouses are an ideal business to capitalize on the “green rush”. Marijuana, most commonly referred to as cannabis by industry professionals, is possibly more valuable than any greenhouse crop in the history of agriculture. Cannabis is worth 100 times more per unit area than other high-value greenhouse crops. (Figure 1).
Now that’s a lot of green! The desire to strike it rich has given rise to heaths of floral and vegetable farms tearing out their crops in favor of this new cash cow. Though, many growers are new to cannabis and don’t have much experience with the crop.
With so much money on the line – even the smallest change to your production environment will have a big impact.
In this web guide we’ll walk through real-world greenhouse cannabis scenarios and show how a greenhouse in a high light region like Arizona can still gain an additional $13,700,000 per acre per year in revenue!
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Before diving deeper into the economics of supplementing light for greenhouse cannabis, let’s first consider these important factors that separate cannabis from conventional crop production:
Now, we’ll admit that we’re big fans of the greenhouse method. (Sunlight is free, so why not use it?)
Cannabis is also one demanding crop, so you’re going to need a lot of light. Farmers can’t afford to lose out on yields, but it’s also important to know how much yield you’ll gain by adding a little more light.
Let’s look at how far more light will go when growing cannabis in a greenhouse.
The cost to light an acre of greenhouse space at an average supplemental intensity (or PPFD) of 400 µmol·m-2·s-1, is a little under $1 million United States dollars (USD).
This may seem like a lot to spend on lighting. Yet, each additional light fixture a cannabis grower provides their crop is like a revenue engine – which can pay itself off in just the first year by increasing flower yields.
At optimal light levels, greenhouse cannabis flower is worth approximately $39,000,000 USD annually per acre. It’s important to note that any light quantity below a DLI of 40 mol·m-2·d-1 reduces this value.
For most crops, 1% more light means 1% more yield. Horticulturalists call this the 1% rule.
Cannabis too, generally follows this classic horticulturalist rule-of-thumb. Though there is a point of saturation where the rate of increasing yield diminishes.
Doctor Allison Justice (OutCo, The Hemp Mine) showed that the amount of trimmed cannabis flower that was harvested increases by 1% for every 1.1% light intensity increase between a DLI of 17 and 25 mol·m-2·d-1 (at 1500 PPM CO2).
The rate of yield gain slows between 35 and 52 mol·m-2·d-1. Between these light levels, trimmed flower weight only increases by 1% for every 5.5% increase in light quantity (Figure 4).
Lighting at 52 mol·m-2·d-1 as Dr. Justice did, ensures that yields will stay stable long into the future. (This is due to the light loss effect, also known as lumen depreciation, or most recently in horticulture as the yield loss factor).
So for growers with greater capital and a long-term business plan, providing 52 mol·m-2·d-1 can make financial sense. For growers that are just getting started, 40 mol·m-2·d-1 will provide adequate return on their investment.
Local climate and latitude determine a given location’s solar light (as seen in Figure 5 below). For instance, in North Carolina, at the same latitude as Arizona (approximately 34.5 degrees), an outdoor grower would need to supplement light on 232 days instead of 181. This 51 day decrease from North Carolina to Arizona is due to climatic differences.
Now that we understand just how much optimizing light quantity will increase yields, let’s compare a greenhouse in:
LumiGrow modeled 5 years of NASA solar irradiance data and determined the number of days that required supplemental light to reach a 40 mol·m-2·d-1 DLI target in these different locations. We found that even outdoors, at the locations listed above, growers would need additional light for the following number of days to reach their target (Figure 6):
In the chart above, all the yellow dots represent days where there’s enough sunlight outside of your greenhouse to hit your yield targets.
But these graphs don’t account for any light obstruction from your greenhouse. There are several greenhouse factors that reduce the light your crops receive, including:
On top of all these factors, your glazing will never be perfectly clean.
Typically, only 50-65% of solar light outside of a greenhouse actually reaches your crop! For this reason, many more days require supplemental light within a greenhouse than outside.
Case in point, let’s say you’re just starting out and choose to build a cannabis greenhouse in Arizona. Afterall, it is a land of plentiful light. (The June DLI is a whopping average of 59 mol·m-2·d-1).
At first you think “I might as well save money and electricity”. You may even consider not providing supplemental light at all to your cannabis flowering bays. With so much money on the line, we want to make sure we make the best choice for our business.
Looking at the graph below we can see the monthly average solar light levels within the greenhouse (Figure 7).
Even in June, you would need 1 mol of supplemental light on average to push total light levels to the 40 mol·m-2·d-1 optimum. When it comes to winter months (November through February), your Arizona greenhouse will require an average of 23 mol·m-2·d-1 in supplemental light.
Without supplemental light, you would only achieve the 40 DLI target on 9% of days (33 days) each year!
Worse yet, this means missing the DLI target by an average of 35% and, because of the 1% rule, forfeiting nearly $14 million USD of potential revenue per acre each year.
It’s apparent that supplemental light is not an option, but a necessity.
To keep from losing $14,000,000 per acre in revenue, you decide to purchase LED fixtures to supplement light in your greenhouse. But how much supplemental light should you provide?
An intensity of 150 µmol·m-2·s-1 would increase the days your crop achieves the 40 DLI target to 26%, 300 µmol·m-2·s-1 to 47%, and 450 µmol·m-2·s-1 to 67%. To achieve the 40 DLI target on all days would require 870 µmol·m-2·s-1. This is a decision you must make carefully to find a perfect balance between increased yields and capital expenses.
As you achieve the 40 mol DLI target on more and more days, you will also increase annual gross revenue (Figure 8). With just 150 µmol·m-2·s-1 of supplemental light, revenue increases by $5.3 million USD.
This increase continues with greater supplemental intensities with a maximum gain of $13.7 million USD up to the 40 mol DLI target every day of the year. (Keep in mind that gains well above $13.7 million are easily possible when lighting above a 40 DLI target).
Note that just a 50 µmol·m-2·s-1 intensity increase means at least a million dollars of greater net revenue per acre up to an intensity of 600 µmol·m-2·s-1 (Figure 9).
There is an economic threshold at which adding more light does not increase net revenue. At this point, the quantity of light requires a large number of fixtures, so many fixtures that the capital expense exceeds the value of increased yield. In the Arizona example, this economic threshold is 750 µmol·m-2·s-1. This means that the best ROI will be found around 500-550 µmol·m-2·s-1. Other lower light regions will have a significantly higher threshold.
Let’s Review. Cannabis is likely the most valuable crop on a per acre basis. This means very small yield improvements can greatly increase revenue.
Even in the sunny state of Arizona, for each day a grower supplements solar light to achieve 40 mol·m-2·s-1, they will on average increase gross revenue by ≈ $41,000 USD. This adds up to a revenue increase of $13.7 million per acre per year.
In lower light regions, this light-to-revenue effect will be much more dramatic.
To ensure these revenue increases are realized, cannabis growers must only use reliable supplemental lighting sources that are proven to grow commercial cannabis, they must supply adequate CO2, and optimize all environmental variables for LEDs.
As earth’s climate changes, efficiency has become more and more important both to sustain the planet and maximize a grower’s net revenue. So it’s time to roll up our sleeves, and provide the perfect light to maximize yield of your cannabis crop. After all, there really is a lot of green on the line.
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