The year 2020 has been a wonderful year for the cannabis industry, with many states reporting booming revenue for the past year. But what may be the recent landmark many people are rooting for is cannabis legalization, which is currently embraced by 36 states, either for medical or recreational purposes. In response to this significant industry change, Tony Frischknecht presents some useful tips on how to scale your garden according to the government’s rules and regulations. He explains the most practical improvements for your water system and lighting, as well as the benefits of going greenhouse. Tony also goes deep on saving money on energy by addressing the most common heating and cooling issues in a cannabis garden.
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Waste Not, Want Not: How To Strategically Cope With Cannabis Legalization
How Do Businesses Evolve To The Next Generation
What an incredible year for cannabis 2020 has been. I know you guys have been out there working very hard, you guys that are doing retail stores, grows and trying to get your licensing. I know that a majority of the industry is doing very well. I know there are some businesses that are having trouble now, trying to get going. I feel for you, guys, keep working your tails off to make it happen. I want to point that out that we have seen some record sales that have been happening across the US. One of them I point out is my home state, Colorado. They announced that they have accumulated $2.2 billion since legalization. That is amazing. It’s helping our state out immensely given the decline from COVID and tourism that we’ve had. We’re still going strong, but it’s helping supplement that.
I hope the rest of you out there are seeing the same in your state. That is why we are going to be discussing the future of our business now. Also, if you guys like what you’re reading, please check out more episodes at PlantProblem.com. You can also reach out to me there if you guys have any questions or you guys have some show ideas. I encourage you guys to give me some ideas of what you’re interested in and what you’d like to read some deep information on or some experience that I have that I’d be welcome to share with you. Please share that with us.You never want to make hasty changes across your entire business unless you test them. Click To Tweet
I want to start with a little story. I know you guys that have been reading have read this a couple of times. Something I like to share is I started out in the basement like many other growers out there. I remember, I have about 1,000 square feet, I have my little flower room which was about 600 square feet and all the equipment that I had to bring in, I was running six lights, which at the time when I first started was massive for me, 6,000–watt light. I was running and I was doing it with a hydro system. It was amazing to me all the products that I had to incorporate in my grow from big trays reservoirs, not only that but getting into the nutrients that you have to bring in big jugs and massive amounts.
They were 5-gallon jugs of four different nutrients. I couldn’t believe how much of that stuff I was using at the time. I look back on that and I thought, “This is a lot of wasted material that I’m getting rid of.” I started probably 3 or 4 months in once I got my first harvest and I started thinking, “What can I do to save on my waste?” One of the things that I did is the property that I was renting at the time had a big front yard and a big backyard. What I would do is I bought one of those little lawn tractors. They were yellow and white, and I’m sure you’ve seen them out there, you hook a hose up to the back of them and they run the length of the hose. You turn the hose around and it’s like that’s the track.
What I ended up doing is I bought a high–powered pump and I started taking all my wasted reservoir water as opposed to dumping it down the drain, which you shouldn’t do. If you are doing that, you shouldn’t do that because of all the nutrients that were dumped down the drain. What I ended up doing is I put that and I ran the sprinklers on the lawn, and made it nice and green. That was one of the things that I had done to try to curb my waste. It wasn’t very much, but I was more concerned about what kind of yields I was getting and how much income I could bring in across my crop.
As we evolve, we get more aware of agriculture and what’s happening. The waste that is produced from our industry is enormous. I know some of you know what I’m talking about out there. The reason why I wanted to discuss this is that the government is starting to become a lot of a big part of our business. We’re starting to see them getting more involved with us. Thirty-six states have some cannabis legislation on the books, whether it be medical or recreational. Somewhere, somehow, the majority of states out there have this happening. They’re going to start wanting to understand more about our industry.
What I’m afraid is going to be happening very soon is there are going to be some government mandates that would start happening. The enormous taxes that are coming in, these states that are also bringing that more interest, what else are they doing? How else are they doing this? They’re going to start getting in our business much more than we want them to, but as a group, we know how valuable becoming legalized is to the sales of our industry. This is a big part of it. When we start talking about government meddling, this can get tricky, especially for the small business owner that is getting by. Some of you guys are barely getting by, trying to get over that hump. I feel for you because I’ve been there several times.
These government mandates are nothing to laugh at. You need to take these seriously because they’re going to be doing the inspection. I want to share with you a couple of things you can start setting up in place before you get told what to do. Nobody wants to be told what to do, especially the business owner. However, all big industries do it, and cannabis is on the way to becoming one of them. If you guys want to be a part of the big industry of cannabis, this is what’s going to happen in the evolution of cannabis.
Number one, look for new efficient lighting. One of the biggest waste that we have now is electricity. In Denver, several years back, our energy company was Xcel Energy. They were talking to the growers around the area because of the power usage they had. There were discussions that were happening back and forth. They didn’t want to have to build a larger facility to handle the power usage that was going on because for quite some time, we would get brownouts, which if you guys have lived in a city, middle of summertime, you’ve got AC units that are pulled with a lot of electricity and they’re knocking out grids in the city. Those started happening more frequently. They started coming to different industries, especially us, and saying, “We want to talk about a rebate program. How can that work?” This is one simple way to say, “Let’s talk to our power company. Let’s see if they have any rebates or maybe we can create a plan for rebates.” That makes you a part of it.
This is huge because now you’re working with local companies to solve a problem. They want to help you, you want to save money, and this is a great way to save money. Unfortunately, what happens is you generally have to put them up for a cost to purchase the lights, and then they refund that back to you. Don’t freak out if I spend all this money on lighting, you can upgrade small parts as you go along. That’s how I saw it happen. It may be different in your area. When you are looking for these lights, there are gobs of lighting companies out there now. I don’t have one that I directly say, “Go use these guys. These guys are the best.” Do your homework. I say that all the time, but research. When you do find the light, don’t make the mistake that I’ve seen many is buy all these lights and put them up.The government doesn't understand how one rule affects another decision you have to make at the end of the day. Click To Tweet
Some of the largest companies I know, I’ve talked about them on this show, they do a small research and development testing on lights. They test them before they roll them out to the rest of their facilities. Some of you guys may be growing into a new facility and got to set up small ones, but you never want to make hasty changes across your entire business unless you test them. I’ve seen many people fail and lose so much money because they chose to go big or go home. It’s a great saying at the beginning. What I mean is the beginning of the project. It’s great to say, “I’m all in, and let’s go do this big.” However, halfway through the project, you tend to regret saying that because it bites you in the butt.
Keep that in mind, always, especially in the grow, make sure you roll things out slowly and make sure you do all your testing first. Become more aware of your water consumption and what kind of waste you have your runoff because what’s happening is you’re going to look at states like California, and you better have a plan in place now because they are going to be starting to restrict water if they haven’t already. You want to set a good precedent for all your peers.
This will also get you working to the right direction with the local government. They’re going to see that you care. If you can become the poster child to a certain technology or a certain fertigation system, this can create a nice single or potentially double-wide highway through regulations for you and the companies that are following you. I can’t tell you how much easier it is to carve the way instead of play within the rules of local government. Like many of you know out there or soon would find out, they make a lot of rules and they don’t understand how one rule affects another decision that you have to make at the end of the day. That’s where it gets frustrating with the government.
Monitoring your water runoff. It’s extremely expensive if you’ve got nutrients that you’re dumping into your waste line and extremely wasteful with the water. I was taught the rule of thumb is 10% runoff. You always need a little bit of something. What do you do with that runoff? Can you use it somewhere else? Can you use it in a garden? Can you use it on your front lawn? Maybe and maybe not. Strictly as an example, but this is something that I’ve thought about for quite some time. If you’re not thinking about it, that’s what this episode is about to get your mind working in that direction. I know you are super busy and like, “How can I think about this?” I’m trying to prep you for 6 or 24 months down the road. Somewhere in there, we’re going to see this happen, especially if legalization happens. The Federal Government is going to get in here and the Department of Ag is going to be a big part of this. They’re going to treat it like any other agricultural product as they should.
Repurposing water. Also, if you become the pioneer to a certain way to do things, that’s going to bring you and your company publicity. I don’t know about you, but it’s still extremely hard for you to do any advertising. Still, online, most localities only let you have a sign. Some don’t even let you have that. This is something that can become free publicity for you. Take advantage of it because they will be putting in the papers, and they will put your company or your retail store on display for the entire town or city you’re in. That is priceless.
Heating And Cooling
If some of you are wondering, “How do I advertise?” This is one of the number one ways to get your business a full view of who you are and what you’re working towards. Heating and cooling by far, in my opinion, this is where some of the most wasteful areas for electricity consumption are. We got these lights that are producing a ton of heat. You get into reducing, let’s say, you go to an LED or a ceramic type bulb, you can reduce your heat load immensely.
Specifically indoors, I realized that there are some outdoor people and this doesn’t bother them that much, but in a lot of cold places such as Colorado, a lot of Midwest states are going to have these issues where they’re going to be growing indoors. This is more specifically to indoor grows. We’re talking depending on how long you’ve been or how big your grow is. We’re talking about bills that are between $6,000 to $25,000 a month for electricity. When you get a $25,000 electric bill for the month of February 2021, I feel your pain.
Being able to reduce that somehow with one of these measures is extremely important. Be a pioneer for this lighting or this fertigation or this SOP, Standard Operating Procedure for watering. You can create that stuff and take that to the local government when you’re going through licensing stuff, when you have people come to visit you as you grow, “This is what we do and this is why we do it.” Have that stuff in place. Become the poster child. One of the biggest problems in many heating and air companies is they’re not familiar with growing cannabis indoors or growing anything indoors. This is a huge problem too. They don’t understand, they say they run load testing on all this heat, but they don’t get it. It’s very rare that I find a company that hasn’t done these for a little while, built out massive indoor grow houses, that truly understand their heat loads because 9 times out of 10, these companies are getting into it for the wrong reasons.By becoming a pioneer in a certain way to do things, your company will gain publicity. Click To Tweet
They see the opportunity to make money, and they see the opportunity to take advantage of you because they know there’s money in cannabis. You guys deal with it every day. I don’t have to tell you. The newbies, this is how it is. They see the profitability. They’re going to charge you a lot. You don’t know what you’re getting unless you go with an experienced company. That can be big savings for your power bill at the end of the month. Take some time and find a smart experienced HVAC company or guy or whoever you deal with. There are a lot of companies now that are doing this in multi states, which is a huge plus for you. Back when I first started, we didn’t have these opportunities. It wasn’t going to happen because we were the first ones doing this. Take advantage of not being the first to market. It doesn’t always work out, but not being first to market in this area will save you a lot of time and headaches.
The second biggest mistake is location. The location of your grow can cost you so much money and you don’t realize it. A lot of people want convenience on where it’s at, may it be location to their home or location to their office. This is a big mistake. If you’re in an area that gets too hot or too cold, extreme temperatures, this is going to fluctuate your heating and air like no other. You’re going to suck the juice. For those of you that are in newer markets, you still have fat margins in your cannabis and flower that you’re selling, but that’s going to decrease. You need to be ready for this compression that’s going to happen. If you’re ready for it and you spend the money now while you have it coming in, you’re going to be prepared for those $700 to $1,000. I know you’re like, “That’s never going to happen here.” I said the same thing.
This is coming from my experience. We’re in different states. It’s going to be a variance but remember, geographical location is huge. Sometimes you don’t have the choice to relocate, but I want you to keep that in mind because it can save you hundreds of thousands of dollars literally on that electricity consumption. Sometimes you may not have that option, but if you do, think hard and long about it, “What if I moved to a warmer part of the state? What if I move to another state?” That is a possibility. I speak about regulations on several of the shows, and maybe find a more favorable state that’s going to fit you and your growing style better. Not only it can save you money, but it can save you a hell of a lot more. Time is of the essence right now, especially trying to get in before it’s federally legalized.
This next one, if you can go to a greenhouse, there’s a lot of good quality product that’s happening in greenhouse. If you can start from scratch and go that direction, that’s another great way to save money, but you may not have that option. There are all types of new tech in this space. Automation is starting to happen. There are starting to have some companies that are coming up with analytics that you can follow, which you can create efficiencies that way, either using less water, using not only better light but using your light footprint better. I won’t go into that. You guys out there that have grown for a while, you understand the light footprint and how ideal that is for focusing on your plant or plants.
With all that said, I want to thank the cannabis business owners out there. You guys have been struggling for quite some time, and the momentum is picking up. You are the reason why I get to share these thoughts with you and ideas. I have been there. However, you guys are what is called cannabis 2.0. You guys are stepping into that. We’re starting to see some of that consolidation. Some of those guys out there, mom and pops are starting to be able to expand. They’re getting a larger footprint or they’re becoming part of a larger company, which is cool.
I know the dream back then was, “Let’s see if I get bought up by pharma.” Now it’s, “Let’s see if I can get bought up in large big cannabis.” There are a couple of companies that are starting to do that. We’re starting to see them. If that’s the path you’re taking, I wish you the best. I hope it’s working out well. If you’re a smaller guy picking up a store here or starting a new one here, I also want to give you props because it’s challenging. The competition is getting stiffer out there. I’m pulling for you guys as well.
Lastly, I want to give all the companies out there something special because we were talking about advertising here. I would like to hear from you, companies out there, it doesn’t matter where you are, anywhere, any place. If you guys want to give me the name of your company business and your state, I would love to feature your company business at no cost to you saying, “This is Green Thumb out in Massachusetts. We want to let you know we’re opening or we’ve opened.” You can finish the lines there.
The one thing I ask, I will do that as long as you give me a sentence. Tell me what you would like to know. Give me a topic that you’d like to know more about. This is a fantastic opportunity for you guys out there that can advertise. I’m opening it up to you. Please take me up on this offer. I promise you, no matter what, you can at least point people and say, “I’ve got an add on here.” I’ll feature you guys on one of the upcoming shows. You can share that with people. You can share it on whatever one of your social media apps that you enjoy. You can share that episode, it will have you in there. It’s free advertising for you.
Please take me up on that offer and reach out to me at PlantProblem.com or contact me on my social media as well. I would love to hear from you. I hope I gave you something interesting to take forward, especially for you busy guys out there. I hope this wasn’t too long of an episode, but I will also be talking here in the future more about some of the efficiencies that can take place. There are some cool conferences that are happening, I want to bring some of that information to you. Thank you so much for reading. I will see you soon.