Cannabis cultivators are currently facing an uphill battle in terms of profitability. Yes, the industry is worth tens of billions, but the market is also facing several major downward pressures that, as recent reporting has made clear, have left most with a pessimistic outlook.
Outside of a few state outliers, the price per pound hovers between $500 and $1000 in most markets. With little room on the retailer side to increase prices, cultivators are the ones taking the hit. How will cultivators make this reality work to lock in their longevity beyond the current turmoil?
"At TSRgrow, we are designing cutting-edge lighting and grow room technology to ensure cultivators can maximize productivity, all while reducing costs. When every penny matters, TSRgrow is helping growers achieve measurable operational savings and higher-quality end products," the company says.
The TSRgrow team at this year's MJBizCon
The state of the cannabis industry
The 2023 Wells Fargo Cannabis Cultivator Survey reported that 66% of cultivators were either not profitable or breaking even. Profit margins, competition, and regulatory complexity are the top three external pressures negatively impacting business performance, as cited by cannabis CEOs in the 2023 Ernst & Young Global Survey.
As the Cultivator Survey put it, it's "still tough out there."
Yet, as both reports make clear, the industry as a whole still has a long-term positive outlook. By some estimates, the global market will hit $57.18 billion in 2023 and $444.34 billion by 2030, at a CAGR of 34.03 percent.
Profitability is possible, even if the entire sector is still navigating the right way to get there. Nearly 55 percent of CEOs reported banking on the demise of their competitors as a tailwind pushing them into 2023. This begs the question, how do you prevent your company from becoming one of these statistics?
The report also tells us that most of these CEOs (93.9 percent) want to improve core business performance and profit margins. If your core business is cultivation, that means taking a close look at your operational efficiencies, and naturally, that will mean looking at your most expensive systems.
Making commercial cultivation profitable
TSRgrow is giving cultivators the tools and technology they need to navigate the challenges of the current realities of the cannabis industry.
Rebates and incentives
Retrofitting an older grow room with new technology does require an investment. Yet, the financial burden doesn't need to fall entirely on the facility's shoulders. Increasingly, in legal markets, cannabis cultivation facilities are making rebates and incentives work in their favor to reduce the cost of brand-new LED light fixtures and installation.
The potential savings vary based on jurisdiction and project size, but in some instances, it's feasible to cut down as much as 100 percent of the project expenses using these incentives. TSRgrow frequently assists its clients in obtaining savings that cover more than 70 percent of the project costs.
Fewer replacements and lower maintenance costs
Beyond the ongoing energy savings, TSRgrow's LED Lighting Solutions also help reduce costs associated with maintenance and replacement.
LED fixtures have a significantly longer lifespan compared to traditional grow room lights. As highlighted by Singh and Basu et al., while HPS fixtures typically last about 2.2 years or 20,000 hours, LED fixtures last for double that, clocking in at 5.7 years or 50,000 hours.
When considering long-term financial benefits, doesn't it make strategic sense to opt for lighting solutions that won't burn out in a mere two years?
TSRgrow's TGHV remote power servers also minimize operational downtime. "Our products are designed with simple plug-n’-play features and an industry-leading remote power server that's decoupled from the fixture. This means replacement parts slide in and out when maintenance is required, with no canopy disruption."
Automation to monitor and manage grow room costs
According to the company, there's a clear advantage in automating regular tasks within the cultivation space. TSRgrow’s GROWHub Environment Monitoring offers self-sufficient automated management for indoor cultivation spaces, covering lighting, irrigation, climate, and beyond.
"Rather than allocating human resources, our system acts as a cultivation co-pilot, overseeing, regulating, and evaluating environmental factors within the grow room. Growers win back valuable time on menial tasks to focus their energy on increasing harvest quality and R&D."
"Additionally, GrowHub delivers essential visual insights into your facility's energy consumption—a facility-wide surveillance program on energy data and usage patterns. See where you can become more energy efficient, and identify areas for improvement. Our growers pull valuable insights on energy usage from these analytics to prioritize energy-saving initiatives," the company says.
"An example is our crop steering by LED Lighting which allows each strain to have a specific recipe that provides consistent quality yield increases of 10-15% and more over traditional LED lighting."
"It's tough out there, yet the future is undeniably bright green"
Cultivators have been hit hardest by the current market pressures. With consumers demanding cheaper and cheaper products, growers are now forced to find ways to continually reduce production costs to carve out a foothold.
TSRgrow's advanced grow room technologies are helping companies significantly reduce operational costs, enhance efficiency, and ensure long-term viability.
"Whether it's the cost reductions possible thanks to facility-wide energy insights, the labor savings from meticulous grow room monitoring and control, or better yet, increased and higher-quality harvests thanks to the best-in-class grow room lighting, we’re ready to help you achieve it."