The red-leafed blueberry bushes and greenhouses filled with tomatoes tell you that this small town south of Vancouver is a great place to grow things. A peculiar smell in the air tells you marijuana producers have already figured that out.
Across Canada, gleaming glass greenhouses that once grew produce for consumers are being retrofitted with air filters and light-blocking shades. Gone are the tomato plants and peppers. In their place are tens of thousands of sun-grown cannabis plants and hundreds of farmworkers transplanting, watering, trimming and packaging pot.
Experts say these highly sophisticated operations are the future of marijuana production internationally. The hope is that they will drive the price of pot so low, black marketeers give up.
“We haven’t changed the footprint,” said Rob Hill, CFO of Emerald Health Therapeutics, which is growing marijuana in Delta. “We’ve just changed the crop.”
Canada became the second and largest nation to legalize marijuana on Oct. 17. The country’s legal marijuana system requires that cannabis be grown indoors by licensed providers, so Emerald Health Therapeutics partnered with a longtime produce operation, Village Farms, in a joint venture called Pure Sunfarms capable of producing a staggering 82 tons of marijuana annually from the 1.1 million square foot greenhouse complex about 30 minutes south of Vancouver.
Experts and regulators say driving down the price of legal marijuana will help drive out those cartels and black-market dealers, in part by moving cannabis growing into farmland like Delta’s, where high-value crops can be grown more cheaply. It’s already happening, to some extent: Three years ago, wholesale marijuana was selling for $2,000 a pound. Retail prices have also dropped as competition increased: In Colorado, for instance, the price of smokable “flower” has dropped 40 percent since January 2014, from $7 a gram to $4.19 a gram today, according to BDS Analytics.
“The price was always set based on risk,” said Kyle Speidell, co-founder and CEO of The Green Solution, a 17-store cannabis company based in Colorado that was paying $5,000 a pound for marijuana when it first opened four years ago.
As an increasing number of U.S. states have legalized marijuana, growers are getting more comfortable and scaling up their operations. Indoor growers of both legal and black-market marijuana consumed 4.1 million megawatt-hours of electricity last year, roughly equal to the total electricity generated annually by the Hoover Dam, according to cannabis analytics firm New Frontier Data. The company said electricity costs make up to 20 percent of indoor growing prices, compared with 8 percent for outdoor grows.
While growing outdoors is cheaper, it limits the number of crops growers can harvest a year. Growing in greenhouses, however, reduces electricity costs and the amount of water and pesticides needed for growing outdoors. It also allows growers to maintain crops year-round in the right climate.
“We’re seeing a shift away from people who were effectively hobby growers,” said Karson Humiston, 26, the founder of cannabis staffing firm Vangst in Santa Monica, California. “It’s all going to Big Ag. That’s definitely where the industry is shifting. For them, what’s the difference in growing lettuce, tomatoes or cannabis?”
Humiston’s company, Vangst, has grown rapidly by providing part-time workers to large-scale marijuana farmers. Each of her 600 temp laborers is background checked, carries worker’s compensation insurance and is banned from consuming on the job. It’s all part of the industry’s move away from the days when cannabis farmers and trimmers got high while working, and had no legal recourse if they got hurt on the job.
“You’ve got people who were paid in cash, paid in pounds of weed, and if you’ve got unlimited money and paying no taxes, who cares?” Humiston said.