Cannabis legalization continues to gain traction in the United States. In response, growers are seeking ways to optimize their operations to meet customer demands. However, due to rising real estate and operational costs, tax, and legal burdens, traditional single-tiered cultivation systems have struggled to meet efficiency KPIs and financial performance metrics.
The question is, how can we solve this dilemma?
One solution is vertical farming. This technology is surprisingly easy to integrate into your facility, and you can greatly reduce labor costs while increasing yield. Whether corn, cucumbers, or cannabis, the goal of any agriculture operation is to produce large and healthy crops. Here is where vertical farming excels.
Still, you may wonder, “Is vertical farming profitable?”
Absolutely. In fact, some research shows vertical farming can increase yield by 129-200% and net profit by $3.60-5.50 per square meter. Specifically, in cannabis cultivation, multi-tiered facilities have lower production costs and higher yields per square foot than single-tier.
Let’s explore six ways vertical farming can boost your profitability as a cannabis cultivator.
What Is Indoor Vertical Farming?
Vertical farming is one of the more productive methods of growing cannabis, fruits, flowers, and vegetables. These innovative indoor multi-tier systems allow business owners to get the most from every cubic foot of their facility, every watt they use, and every labor hour that goes into production.
So what financial advantages does vertical farming provide?
Some advantages are straightforward (e.g., more canopy space), while others require an understanding of system integrations to measure accurately (e.g., labor efficiency). Still, the benefits all add up to a significant impact on profitability.
Is Commercial Vertical Farming Profitable?
As a commercial grower, you’re likely wondering about the financial benefits of making the vertical switch.
Taking advantage of new technology in multi-tier farming requires attention to detail, data collection, and a clear action plan. This reason, and many others, highlights why choosing trusted solution providers is important for troubleshooting, making informed decisions, and optimizing the tools in your facility.
1. Water Use Efficiency
Vertical farming provides a great opportunity to fine-tune fertigation automation and limit runoff. Some cultivators can eliminate runoff altogether, which significantly impacts wastewater from the facility as a whole. Multi-tiered facilities also use equipment that captures and reuses fertigation runoff and water from the dehumidification system.
While this approach does require filtration and treatment, the free water and lower waste outweigh the filtration costs. In the end, combining precision irrigation systems, detailed media management guidelines, effective drainage, and strategic water treatment make these savings possible.
2. Less Energy Consumption
Successful indoor vertical farming operations rely on LED lamps for lush and healthy plant growth. These high-quality lighting solutions are far more energy-efficient than traditional HID fixtures. Plus, they produce less heat, thus reducing the performance needed from your cooling and airflow systems.
Another benefit of vertical farming is the access to purpose-built solutions that allow you to maximize your production per watt and cubic foot. Tools like high-intensity lighting, environmental controls, automated fertigation, and controllable airflow allow crop steering to be more than a buzzword. Proper control of these inputs allows the performance of every mechanical solution to produce more while using less energy.
3. Lowered Labor Costs
One of the biggest advantages of vertical farming technology is the ability to control the environment and maintain consistent plant management. In addition, quality SOPs and predictable growth allow for the most efficient labor allocation.
Specifically, vertical farms allow employees to complete tasks like defoliation in less time. Another example is the foliar application of IPM — more plants can receive treatment per labor hour than in single-tier setups.
Also, technological advancements like purpose-built HVACD systems or the Vertical Air Solution’s In-Rack Air Circulation System maintain plant vitality and reduce unnecessary touches. This consistent and controllable airflow balances humidity, temperature, and CO2 levels throughout the entire vertical racking system, from top to bottom and front to back. By reducing pathogen pressures and driving plant vitality, fewer labor hours are needed to support cultivation success.
In short, vertical farming equipped with environmental controls will streamline production, prevent unforeseen issues, and help employees accomplish the most impactful tasks.
4. Year-Round Farming
Professionally designed indoor vertical farms are resilient to the challenges of nature, including freezing conditions, scorching heat, strong winds, migratory pests, wildfires, seasonal changes in DLI, and other unpredictable factors. By taking control of the environment, you effectively become the provider of nature. As long as your systems are well-maintained, you can ensure consistent results and enjoy more harvests throughout the year.
Indoor vertical farming allows you to continue operating and maintain the appropriate environmental conditions, despite external temperatures and extreme weather conditions. This ability enables you to optimize genetics and, in many cases, trigger senescence and shorten flower times. Indoors, your facility is optimized for maintaining consistent plant health, even in the harshest winter storm.
Let’s look at an example:
Assume you have 3,000 square feet of flowering canopy yielding 60 grams per square foot.. That equals 396 pounds per harvest. If you have a controlled indoor environment, you may achieve six harvests per year or 2,378 lbs. That’s almost 2,000 pounds more by harvesting multiple times a year.
If you sell for $1,000 per pound, your six harvests in a single year would produce $2,378,000 in top-line revenue compared to the single harvest, which would produce a modest $396,000. Multi-tier indoor farming allows you to go a step further and optimize not only the square footage of your facility but also the cubic footage and increase overall yield. Cycles per year and total canopy square footage can have a significant impact on the bottom line of your business, and vertical farming provides the fastest return on investment.
5. Minimized Use of Pesticides and Fungicides
Vertical grow racks from Pipp Horticulture feature an antimicrobial and fungal-resistant coating that ensures easy cleaning and a long working lifespan. Our unique integrated slope grow tray designs and drainage system limit water-born pathogen pressures. Our in-rack airflow system, VAS 2.0, mitigates microclimates and helps prevent powdery mildew. We continue to engineer solutions that reduce pest and pathogen pressures so you can spend more time working on the plants and less time looking for the culprit.
Moreover, facility designs with plant quarantine rooms and procedures that require employee PPE (e.g., Tyvek suits, booties, beard nets) have a distinct advantage in control over greenhouse or outdoor gardens. Some facilities install air chambers, use sticky floor pads, positively pressurize their cultivation rooms, and have a spray bottle of their preferred “human sanitizer” outside of each room to prevent contamination. Indoor Vertical farming requires procedures and environmental control for effective IPM but also creates a cultivation environment that reduces the use of pesticides, bactericides, and fungicides.
Ultimately, vertical farming delivers a protected and adjustable environment with fewer pesticides by leveraging other forms of control.
6. Increased Yield per Square Foot
Cultivators have been standardizing metrics like pounds per light and grams per square foot for a long time. Thanks to lighting innovations, fertigation advancements, and environmental management tools, genetics are producing like never before. Today, fully mobile multi-meter cultivation facilities have the most efficient room utilization, allowing facilities to utilize their vertical space to achieve prolific yields and higher cannabinoid and terpene content than ever before.
A massive canopy also demands a prolific vegetative space, ensuring only the healthiest plants enter the flower space and load-in timelines are met. Moreover, cultivators can support a nursery model revenue stream by providing enough plants for their facilities and others in need.
For an easy and straightforward analysis of the vertical opportunity in your space, utilize Pipp’s Cannabis Yield Calculator. With this tool, you can see room utilization metrics and projected revenue gains relative to the room size and number of tiers. This plan can be a great way to predict ROI timelines and phasing plans.
How Much Does Implementing Vertical Farming Cost?
Vertical farming equipment will require an initial investment, as does every shift in infrastructure. Growers will need to determine the correct lighting layout, tier spacing, augmented airflow, aisle space for workflow, fertigation system, climate controls, and growing media. Ongoing costs like HVACD and irrigation maintenance should be considered, too. While some of these processes can be intimidating, Pipp’s team of cultivation experts is an excellent resource to ensure your decisions are well-informed.
Here are a few areas to consider before implementing vertical farming systems:
- Lighting technology: When selecting an LED fixture, you must consider several things (e.g., efficiency, intensity, spectrum, price, form factor, and after-purchase support). However, choosing the correct lighting for Mother, Vegetative, Clone, and Flowering plants should focus on optimizing the light during each growth stage.
- Airflow management: Controlling the distribution of conditioned CO2-rich air through the canopy is more challenging in multi-tier than single-tier. The configuration of your supply and return dampers, additional fans, and rack spacing will determine how effectively you can homogenize room conditions and eliminate stale air.
- Automated environmental controls: Climate control can be tricky with vertical farming, but automated environmental systems simplify the process. These technologies enable growers to monitor temperature and humidity levels for optimal plant development and drive plant performance through advanced crop steering strategies.
Regardless, the benefits of vertical farming vastly outweigh the startup costs. Optimizing your facility for maximum growth capabilities opens a world of opportunities for cultivating multiple genetics and consistently producing quality products. With time, increased yields will counterbalance your investment, satisfy demands, and ease your mind about your decision.
Vertical Farming is the Future
Industry experts propose a rapid expansion in the vertical farming industry, with annual profits expected to reach $7.3 billion by 2025. The promise of institutional financing under federal cannabis reforms is also on the docket, so now is the time to invest!
Vertical farming technologies are critical for growers to stay current with the latest advancements. Acquiring and installing high-quality technologies means savvy indoor farmers can continue cultivating cannabis profits well into the future.
