When AgTech Comes to Cannabis Town
Almost every cultivator obsesses over their cost to grow – and for good reason. Their competition is thinking along the same lines. Selling prices are declining while the cost of inputs have been increasing. At the same time, many growers struggle to hit yields & sustainability targets as well as deliver desired product profiles (e.g THC, terpenes, bud quality).
Fact is, cannabis is a fickle product to cultivate at scale.
One game changer for MSOs and LPs will be the AgTech revolution. This is not hype. AgTech is dramatically improving the way farmers around the world grow food, meet sustainability goals and plan & run their operations.
A definition
AgTech is a grab bag of integrated, agriculture-based hardware and software technologies including sensors, advanced data analytics, machine learning (i.e. AI), drones and product-handling robots. AgTech applications cut across the cultivation value chain, from preparing the pots & fields to growing & protecting the crop and harvesting.
Early cannabis attempts at leveraging some of these technologies generated mixed results, mostly because of issues related to the choice of genetics and planning. Of note, cannabis was also a relatively unfamiliar product from an industrial production and consumer needs perspective.
This time could be different.
1. AgTech has a proven ROI, across a variety of geographies and commodities;
2. The strategic imperatives (lower costs, higher yields, reduced emissions) have never been higher;
3. The basket of AgTech technologies have substantially improved and will continue to do so;
I’m no cultivator but I do understand technology and how traditional production methods will be significantly enabled by these disruptive tools.
For example…
> Sensors and data management systems can identify different micro climates and plant maturities in large greenhouse and deliver precision levels of water, fertilizer and lighting;
> Vision systems can be used to determine the optimal time for harvesting;
> Agribots will soon be able to harvest the plant and perform certain processing activities, reducing the demand for labour;
> AI can refine the best mix of strains and seeds by season and projected demand.
Who wins with AgTech?
Initially, greenhouse and indoor facilities will be the biggest beneficiaries, particularly those in areas facing high energy, fertilizer and labour costs. While the payback will favour larger facilities, many micros and outdoor hemp & cannabis fields will also benefit.
What’s holding industry back?
1. Management recognition that world class cultivation goes beyond traditional (often unscientific) methods;
2. A lack of industry awareness of successful AgTech cases studies;
3. Capital is tight, plus there are competing internal demands for cash
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