Guest Speakers: Mitch Galton (Director of Business Development) and Brett Cherniack (VP of Sales) from Urban Gro, a company providing integrated design and engineering solutions for controlled environment agriculture (CEA) facilities.

Key Discussion Points:

Urban Grow’s Services:

Specializes in retrofitting existing facilities and energy-efficient solutions for cannabis cultivation and other CEA industries.

• Offers architectural design, cultivation system integration, and equipment commissioning.
• Retrofitting Cannabis Facilities:
  
  • Challenges include assessing existing infrastructure (power, water, and space layout), especially in transitioning non-cannabis buildings.
  • Planning is critical, focusing on utilities, space allocation, and goals before starting a project.
  • Importance of ensuring proper infrastructure (HVAC, lighting) before retrofitting.
    
    • Types of Retrofits:
      
      • Existing cannabis facilities needing upgrades versus non-cannabis facilities being converted.
      • Challenges with distressed assets, where companies failed, requiring complete overhauls.
      • Converting single-level facilities to multi-tiered systems to increase canopy space but requiring significant HVAC and lighting upgrades.
      • Building Selection for Retrofits:
      • Important to consider zoning, local regulations, utility availability, and city support when selecting a building for a retrofit.
      • Delays in power availability can derail timelines and budgets, sometimes taking up to 24 months to get proper utility infrastructure.
• Energy Rebates:
  
  • Significant rebates available for upgrading lighting and HVAC systems, covering up to 100% of the costs in some cases.
  • Utilities have become more knowledgeable about cannabis cultivation and offer tailored energy efficiency programs.
  • Planning ahead for energy rebates can save a company substantial amounts, and waiting for rebate approvals (about 4 weeks) is strongly recommended before making purchases.
• New Cannabis Markets:
  
  • Examples from new states like Alabama and Kentucky show the challenges of being the first to market, such as not having patients or customers yet.
  • Importance of scaling cultivation in phases to match market demand and avoid overbuilding.
  • Challenges in HVAC Rebates:
  • HVAC rebates are more complex to calculate compared to lighting due to constant system usage in cannabis cultivation.
  • Some states are developing more prescriptive rebate programs for dehumidifiers, a major part of HVAC systems in cultivation facilities.
• Closing Thoughts:
  • Both Mitch and Brett emphasize the importance of detailed planning, especially when dealing with capital-intensive retrofits.
  • Urban Gro’s team has extensive experience in cannabis, helping cultivators make smart decisions regarding retrofits, new facilities, and energy rebates.

In this episode of Cultivation Elevated, hosts Michael Williamson and Anders Peterson are joined by Mike Zartarian, an electrical and controlled environment agriculture design engineer and the principal at Zartarian Engineering and Precision AG. With over 20 years of experience as a design engineer and systems architect, Mike brings valuable insights into the complexities of indoor cultivation facilities.

• Mike Zartarian’s Background:
  
  • Mike shares his journey from working as a design engineer to focusing on controlled environment agriculture, including his work in both indoor vegetable production and cannabis cultivation.
  • He co-founded Zartarian Engineering with Mike Siegel and has been instrumental in designing holistic cultivation facilities.
• Challenges in Indoor Cultivation:
  
  • Mike discusses the unique challenges of designing and commissioning indoor cultivation facilities, emphasizing the importance of a holistic approach that considers the entire plant life support system.
  • He highlights the differences between growing cannabis and other crops like lettuce, noting that cannabis is particularly energy-dense and sensitive to environmental variables.
• Commissioning and Tuning Cultivation Facilities:
  
  • The conversation delves into the critical process of commissioning a new facility, which involves ensuring that all systems operate as designed before plants are introduced. Mike stresses that skipping this step can lead to costly mistakes and crop loss.
  • He shares his approach to commissioning, which includes pre-operational testing, sensor placement, and gradually ramping up plant introduction to ensure optimal system performance.
• Sensor Technology and Innovation:
  
  • Mike introduces the new canopy sensor array developed by Zartarian Engineering, which includes an IR sensor to measure leaf surface temperature—a critical factor in accurately calculating VPD (vapor pressure deficit) for cannabis crops.
  • The discussion covers the importance of accurate sensor placement and density, as well as the impact of leaf surface temperature on crop steering and environmental control.
• Best Practices for Cultivation:
  
  • The episode concludes with practical advice for cultivation facility operators, including the need to balance optimization versus maximization in facility design, managing systems and teams effectively, and the importance of commissioning to ensure long-term success.
• Conclusion:
  
  • Mike shares his deep expertise in CEA and indoor cultivation, offering listeners actionable insights into designing, commissioning, and optimizing indoor grow facilities. The hosts emphasize the value of Mike’s approach and suggest a potential follow-up episode to explore additional topics in more depth.

Introduction

◦ Hosts: Michael Williamson and Anders Peterson.

◦ Guest: Ian Miller, CEO of Catalyst BC.

◦ Ian's background includes raising significant private equity, working in various sectors including high-end yachts, and being on the founding team of Loop Pay. • Discussion Topics

◦ Financial Modeling Challenges

▪ Unique challenges in creating financial models for the cannabis industry, such as commoditization and margin compression.

▪ Importance of accurate KPIs and the variability of operator performance.

▪ Impact of regulatory environments and compliance on financial models.

◦ Investor Perspectives

▪ Key factors investors look for in financial models: detail, sobriety of assumptions, and realistic schedules.

▪ Importance of having skin in the game and available resources.

◦ Construction and Operational Challenges

▪ Unique construction challenges in cannabis facilities.

▪ Importance of power availability and realistic project scopes.

▪ Common mistakes: inadequate power planning and underestimating the complexity of projects.

◦ Revenue Projections and Profitability

▪ Critical variables affecting revenue projections and profitability.

▪ Speed to market, talent, capitalization, and achieving KPIs are essential.

▪ Detailed planning and high-quality execution are crucial for maximizing profits.

◦ Emerging Trends and Developments

▪ Shift from equity to debt financing.

▪ Trends in multi-layer horticulture and automation.

▪ Importance of energy cost analysis and life cycle costs.

• Customer Retention and Market Knowledge

◦ Importance of knowing your customer demographic.

◦ Strategies for building customer loyalty and retention.

◦ Examples from retail operations highlighting the significance of customer service.

• Personal Story and Motivation

◦ Ian shares a personal story about his father's experience with medical cannabis.

◦ Emphasizes the impact of cannabis on health and the motivation behind Ian's involvement in the industry.

Introduction and Background

The episode of Cultivation Elevated discusses vertical farming and the future of cannabis and food production.

Guest Atiyyah Ferouz is introduced as a consultant, educator, plant scientist, and CEO/co-founder of AGCann Consultancy and the International Cannabis Quality Standards Association (ICQSA) - she joins Anders and Michael this week. 

Atiyyah Ferouzs’ Career and Work

Atiyyah started in the cannabis industry in 2018 with a background in genetic engineering and plant biotechnology.

She managed a large cannabis greenhouse and launched her consultancy in 2020, specializing in emerging markets.

Atiyyah helps clients worldwide with operations, commercialization, and quality assurance, focusing on compliance with standards like GACP and GMP.

GACP and GMP Standards

GACP (Good Agricultural and Collection Practices) covers the cultivation side, while GMP (Good Manufacturing Practices) covers post-harvest processes.

Different countries have varying interpretations of these standards.

GMP emphasizes documentation, flexibility, and continuous improvement, making it adaptable to various industries, including cannabis.

Quality Assurance and Quality Control

QA (Quality Assurance) involves process documentation, staff training, and adherence checks.

QC (Quality Control) focuses on testing and ensuring the quality of the final product.

Both QA and QC are essential for compliance and producing high-quality products.

Challenges and Insights in Cannabis Regulation

Atia emphasizes the need for tailored regulations for cannabis, as it doesn't fit neatly into traditional agricultural, pharmaceutical, or natural health product categories.

She advocates for a quota-based system similar to dairy production to manage supply and demand.

There are misconceptions about best practices and the flexibility allowed by GMP.

Global Collaboration and Industry Standards

Atiyyah discusses the importance of global standards for legitimizing the cannabis industry.

The ICQSA aims to develop consistent international standards to facilitate trade and ensure quality.

Global collaboration can help stabilize markets, improve price points, and promote genetic diversity.

Remediation and Quality in Cannabis Production

Remediation techniques, though sometimes viewed negatively, are necessary for meeting stringent microbial standards.

Techniques like irradiation, e-beaming, and cold plasma are used to ensure product safety without compromising quality.

Atiyyah believes that dried flower should not be considered a pharmaceutical product due to its variability and the challenges in maintaining consistency.

Conclusion

The podcast concludes with a discussion on the future of the cannabis industry and the importance of ongoing learning and adaptation.

Atiyyah highlights the value of international standards and the need for the industry to self-regulate to ensure quality and legitimacy.

This episode of Cultivation Elevated provides valuable insights into the complexities of cannabis regulation, the importance of quality assurance, and the benefits of global collaboration in the industry.

• European Cannabis Market Variances: The European cannabis market varies significantly depending on the country. Spain still has a significant black market presence, while countries like Switzerland, Holland, Germany, and Malta are more interested in multi-tier cultivation due to advancements in legalization and commercial construction.
• Legalization in Germany: Germany recently decriminalized possession and consumption of cannabis, allowing citizens to possess up to 25 grams and grow up to three plants at home. They also introduced a website to indicate areas where public consumption is permitted.
• Enforcement and Penalties: There are discussions about penalties for public consumption in restricted zones and the need for responsible consumption etiquette.
• Germany's Influence: Germany's approach to legalization is seen as influential for other European countries due to its significant population and international standing, potentially setting a precedent for other nations to follow.
• Pilot Programs: Several European countries, including Switzerland and the Netherlands, have implemented pilot programs to explore regulated cannabis cultivation and distribution.
• Lessons from US Legalization: The conversation draws parallels between the US and European approaches to legalization, highlighting differences in regulatory frameworks and the challenges of navigating state-by-state regulations.
• Regulatory Challenges: The discussion touches on the difficulties of regulatory compliance in the cannabis industry, including tracking systems like Metric and the debate between regulating by plant count versus canopy square footage.
• Potential Future Podcast Topics: Anders and Michael express interest in discussing nuanced differences in cannabis regulations across different US states and potentially exploring topics like cultivation strategies and regulatory efficiency in future podcasts.