Farming Cannabis in Canada
The amazing “cropportunities” coming to the Canadian agricultural sector will be monumental if we are to take the Task Force recommendations to heart. This will hold especially true as Canada is just now preparing its legal framework for recreational marijuana production and retail sales.
For those seeking to expand their horizons of cultivation, a path to outdoor field grown production may be worth seeking. It should also be kept in mind that, if outdoor farming is indeed permitted, that there could be a heavy resistance (and criticism) from the already established licensed producers who have built brick/mortar for indoor production.
The latest recommendations from the Task Force raise quite a few interesting points surrounding the cultivation of cannabis. What particularly stands out from a production standpoint is that outdoor field production could be a looming reality. And game-changer. Could it finally be that cannabis may be accepted as a true agricultural crop in Canada in the years ahead?
Agriculture crops grow best in the natural environment; they’re plants, they want sun and water and soil.
They’ve been growing outdoors for hundreds of thousands of years. I have developed a passion for horticulture through my interactions with this unique plant – and all the dreamed possibilities that cannabis could offer, if it were to some day exist on a legal platform both medicinally and recreationally.
My passion for all plants and nature has led me to pursue an education in Horticulture and Environmental Studies. I have been involved in the commercial horticulture industry for over 20 years, and when I was Head Grower for Tweed Farms from 2013-2016, producing medicinal cannabis in a 350,000 sqft glass greenhouse brought me into a new era of cannabis production.
Could outdoor cannabis farming be the next major step for the cannabis industry?
One of the first objections/concerns about outdoor production of cannabis is the quality/potency of the product. Mainly, is cannabis grown outdoors of equal or comparable quality to cannabis grown indoors within a highly controlled environment? Generally, we hear a lot of murmuring around this point. But when it comes to quality, outdoor grown cannabis can be as potent – or possibly more potent in THC and CBD – than the indoor method. The bud quality has all of the same attributes in relation to terpene and trichrome development. The quality is determined by how much work and effort you put into perfecting your craft, including the handling, trimming and curing of the finished product. Of course, the outdoor model has yet to be proven in Canada’s regional climates.
We are currently modelling outdoor production, and our preliminary estimates suggest that 20 acres could product 25,000 kg per harvest (assume one harvest per year). With a sale price of say $5/gram this crop would be worth $125mm. At present, there is no other crop in Canada that even comes close. According to Statistics Canada, canola yields $13.50 per bushel – and at 25 bushels per acre, a 20 acre canola farm could produce $6,750 in revenue. By comparison, a tobacco farm might generate roughly $20,000 in revenue. According to the Visual Capitalist, cannabis is the global leader in gross production value.
Considering there are already over 91,000 field crops in Canada, how many of these would be interested in switching to cannabis? Especially considering that small farms are mostly in the black, the transition to cannabis should be highly attractive.
Based on our modelling, the yields per plant could reach 6x that seen in indoor growing, while the grow space requirements per plant could be 4x higher; overall, kg yields are expected to be higher. Soil requirements are definitely higher with outdoor cultivation, as also would be water requirements (upwards of 4x). However, take out the significantly lower start-up requirements for facilities, equipment and electricity, and we have a business model with a lower barrier of entry.
Of course, cultivating cannabis outdoors in the field comes with different challenges – including pests, diseases and wildlife, not to mention environmental concerns (hail, wind, tornado, flood, fire). But operating expenses would be expected to be significantly lower than indoor production. Our current modelling suggests the cost per gram to cultivate outdoor product could be as low as ten cents per gram; indoor production is somewhere between $1.50 and $3.00 per gram to produce. For example, even a sophisticated greenhouse like the newly publicly traded producer Hydropothecary has their recent cost of goods at $1.47 per gram. If outdoor production could cut production costs by as much as 90%, this suggests a strong advantage in outdoor farming.
Not to mention the good publicity around environmental stewardship that comes with outdoor production. Indoor grow facilities are notorious for requiring a substantial amount of electricity, which is a burden on society. Grown in the open air and brilliant sun across Canadian farms, cannabis could very well be the next big crop to sweep the country.