Many cultivators do their work in rented spaces. This makes perfect sense in the complex world of regulated cannabis, where local zoning regulations intertwine with state regulations to make a messy plate of bureaucratic spaghetti.
For property owners, the mess is worth it because they can earn a premium on their industrial or commercial properties. And with the precarious state of the commercial real estate sector at present, securing essential businesses such as licensed cannabis companies holds increasing appeal.
But all the due diligence and preparation on the property side of the equation means little if the tenant can’t pay their rent because production falls short of projected targets due to inefficient facility design, or worse, if a poorly designed space is prone to frequent turnover and extended time sitting empty.
Time to break out the antacid? Not if the property owner works strategically to create a turnkey space that can be tailored to cultivators’ differing methodologies.
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As someone who has worked to develop more than 2 million square feet of cannabis production space from New England to the West Coast and 20 states in between, I’ve done a fair share of retrofitting in poorly designed facilities. The common thread: The architects and contractors who designed and built these facilities weren’t familiar with the specific needs inside a commercial cultivation facility. It’s pretty hard to design a facility for maximum productivity if you’re not actually familiar with cannabis cultivation techniques and processes, and what those mean for the design and construction of the facility.
Failing to design a cultivation facility that enhances productivity is a fatal flaw that usually ends with costly renovations.
The good news is such problems can be avoided.
Developing a facility for cannabis cultivation and setting it up for long-term success is a massive undertaking that requires expertise in the various ways cannabis is grown and processed at scale, understanding of building infrastructure requirements, and deep knowledge of state and local regulatory compliance.
Getting the right team together on the front end sets property owners up for sustained success. The site needs a design-build team equally knowledgeable in both cannabis cultivation and building construction. In broad terms, you’ll want an appropriate architect to design the space, a property developer to address site infrastructure needs, and a cannabis consultant to ensure all needs are met and the facility is built to flex with the cultivator.
Think Like a Grower
Four walls and a roof isn’t enough for a cultivation company that needs to start production immediately and start generating cash flow. Likewise, a poorly designed facility creates a nightmare scenario for a landlord if quality cultivators don’t want to work there.
If the facility footprint doesn’t match the grower's goals, it creates a disconnect that hampers production efficiency, and makes it harder for the grower to meet their bottom line — a terrible thing to realize six months into a five-year lease.
When first considering the buildout and garnering a potential long-term partnership, a property owner should put themselves in the grower’s shoes. To meet a cultivation company’s growth trajectory, scalability is the watchword.
Leasing at an expensive cost is a non-starter if the space can’t be optimized. There are also brand considerations. For example, a company may be drawn to the ability to reuse irrigation water as a way to promote its sustainability-focused brand.
Another critical aspect of thinking like a grower is workflow. Many architects don’t know where to start with their design. While a grower will tell them that the flower rooms are the linchpin and compartmentalizing is important to limit the spread of pests, what’s the plan for scaling?
There are also regulatory requirements, such as how many plants are allowed at various sizes of growth.
A consultant can provide the big-picture view on what number of rooms will work best for weekly harvest schedules versus twice-monthly harvesting, for example. It’s also crucial to ensure the HVAC, electrical and dehumidification systems will be able to handle the increased loads as production capacity is maximized.
Flexibility in Cultivation and Post-Harvest Processing
Beyond the nitty gritty of designing a facility for maximum output, there are other areas where a property owner can optimize their ROI by providing flexibility for prospective cultivators.
The ability to incorporate automation is something forward-thinking cultivators are increasingly interested in, as automating processes such as watering and packaging saves labor and reduces the cultivator’s operating expenses.
If a facility is configured with internal growth in mind — through multi-tier racking for additional plants and the option for a cultivator to install an automated irrigation system — these are differentiators that will likely catch the eye of established cultivation companies.
Cultivation methodology extends to post-harvest processing and packaging for wholesale and retail purposes, as well. Variables include how many strains will be produced; hand trim versus mechanical trim; dry trim versus wet trim; hanging whole plants versus drying buds separately; packaging eighths versus pounds; and automatic vs. hand packaging, among other considerations.
Whether it’s an emerging market like Illinois or Arkansas or an established market like Colorado or Oregon, property owners must maximize their investment, and cultivators must maximize their output. Setting a cultivator up in a facility designed to empower efficient production and enable scalability leads to long-term productivity and profits on both sides.