Episode 42

Best Practices for Building Grow Houses & Cannabis Facilities

In this episode of the Higher Enlightenment Podcast, we’re talking with facility design, engineering, and construction experts about how to build the best grow houses and manufacturing and extraction facilities that produce higher yields. Taking a cannabis grow house from concept to certificate of occupancy is no small feat; it takes a team of experts working through the theory and transforming great ideas into a physical structure in practice. Listen in and learn the key elements of building efficient and successful grow houses and other facilities for cannabis product production.

SPEAKERS

Brent Vogt, Jesse Larson, Adam Kulbach, Scott Higa

 

Adam Kulbach  00:10

Hello and welcome to the higher enlightenment podcast brought to you by higher yields cannabis consulting your seed to sale Business Solutions team. My name is Adam part of the creative team here at higher yields. And today’s episode number 42 deals with best practices for building grow houses and cannabis facilities. Today’s special guests include Jesse Larsen, Director of system design at h yc. And Brent Vogt, Senior Project Manager at a tri C. We also have a special guest, Scott Higa, architecture principal at GE three. So without further ado, let’s get on with the show. Okay, let’s start by having you guys introduce yourselves. Let’s start with you. Scott, can you give us a little background on yourself?

 

Scott Higa  01:00

Yeah, good morning. Now my name is Scott Higa. I’m a principal with G three architecture in Denver. We are a commercial based architecture firm. We work primarily in the Mountain West, but I have licenses in in states across the United States do quite a bit of work in the Upper Midwest, Southern California, Texas, Arizona, Florida, the Mid Atlantic seaboard and parts of the east coast as well as Hawaii. So glad to be here with you. Look forward to see what we can do to help you out.

 

Adam Kulbach  01:39

Okay, well, thanks for being here. And Jesse, could you give us a little background on yourself? Yes,

 

Jesse Larson  01:46

yes. Good morning. And my name is Jesse Larsen. I’m the director of higher yields consulting, design build and systems implementation department, been in cannabis since 2015. Started out kind of designing security systems, doing audits, that kind of stuff. We’re moving into design and build since then been able to design and consult on quite a few locations internationally. Everything including from retail cultivation, extraction, manufacturing, to distribution and showrooms, and even just primary offices. So likewise, I great to be here, and we get to have a great conversation.

 

Adam Kulbach  02:32

Well, thanks for being here. And Brent, could you introduce yourself?

 

Brent Vogt  02:37

Yeah, Adam, wonderful. My name is Brent Vogt. I’ve spent the last 25 years life working in construction and engineering. I’ve been with higher yields for a while now really enjoying my time with the folks learning about cannabis. How it works in these systems like MEP HVAC, how it works within the building structure itself, I’ve worked in a lot of situations all over the world with commercial residential, heavy civil, industrial green energy, things like this. government, military projects, public private type of situations as well. So it’s great to work with a bunch of really solid people that understand the business want to be a part of a producing amazing product, but also like to get down to the nitty gritty of how this stuff works and sort of the science of, of growing inside a building, as we say, right.

 

Adam Kulbach  03:23

Well, thanks for being here, Brent. Okay, this questions for you, Scott, what is the most important factor in designing and building a cultivation, manufacturing and extraction facility?

 

Scott Higa  03:35

I think there are probably two, two ways to look at that question. And the first is to develop a design program that the owner, higher yields and the architect usually have a conversation about what are the needs of the facility? And how does that yield a floorplan adjacency of rooms, density of rooms. And ultimately, if it’s a new build, how it affects the site plan. I think the other thing that should be talked about very early on in the process is the governmental authority that will have jurisdiction over over the project. If it’s a new build, zoning and the entitlement process could take one to two years. Generally speaking, larger cities will take a lot longer to approve a project and entitlements than smaller cities. And the length of the timeline may have a big effect on what ultimately can or would like to be built. So those are the two things design program And a timeline.

 

Adam Kulbach  05:01

So what are the key issues people need to be aware of when retrofitting a building versus building a new facility?

 

Scott Higa  05:10

I think I can jump in there, Adam and Jesse. Certainly the age of a building has a great effect on construction costs. If there is a lot of remodel and an older building, one of the things that needs to be looked at from the very beginning is asbestos. It requires a valuation of basement in order to even start demolition, so it’s a it’s a large costs, and it affects a timeline. The other things that really should be looked at early on in the project is the power and the cooling capacity of that older building. Typically, there may not be enough power to a building, when cannabis uses are considered that there needs to be a lot of power and and if that component isn’t there with the existing building, then you have to work with the utility company to bring in new service. That’s an important issue as well as the cooling. If there isn’t a lot of cooling in the building, it takes structure as well as power to add that cooling. And in today’s supply chain environment, it is hard to get our to use. So there could be a year of delay in in a building project in in a retrofit project with respect to cooling.

 

Adam Kulbach  06:46

Okay, thanks, Brent, you do a lot of work in project management. What is the difference between an owner’s representative and a general contractor? Why are each important to significant cannabis facility developments?

 

Brent Vogt  07:00

The job of contractors that constructor risks, right the person that’s responsible physically for providing the schedule, the contractual documents, the physical construction of the building, and is the literally person who’s taking majority of the risk, right? Their job is to make a certain margin on the project, whether it be 5% 10%, sometimes 15, sometimes 2%, you never know, right? So the contractor is gonna go out there each day and understand the schedule, understand their risks, risk points within the schedule, understand how to work with subcontractors understand how to work with folks who are making the contracts and their own personal situation in the business. And they’re going to be the people that do the majority of the heavy lifting on the project, right? The big boys, if you will, an owner’s reps job is to come in and ensure that that person or a group of people rather is doing the thing correctly, right, they’re going to serve at the discretion of the client and understand the basic modules of construction, how things are going to be moved through the process, but also advise the client on how to do things in accordance with the contractual documents, the budget, the schedule, the plans and specs and things like this, right. So it’s our job as an owners rep type situation in certain situations, right to be able to communicate with the general contractor directly understand the construction process, from the point of view of something in my situation, or just situation or in Scotts situation, to be able to produce a building efficiently, quickly within the means of time constraints and budget and schedule, like we had said, but also communicate to the client, how we’re going to get those things done. Right, and the correct process of doing that stuff. With regard to cannabis. I never liked it in construction. When people say well, we’re dicking around here. It always bugged me. It was it always seemed like an excuse to to do well to lie to me in some sort of certain situations. But the nice thing is that we’re building you know, an entire growing facility within the building in this particular situation, right, we’ve got to learn, we’ve got to understand how to balance the air, the HVAC, the plumbing, how we’re going to work with the lighting systems, how that stuff’s going to all contain itself within the confines of a certain size building. What happens when it gets hot out what happens when it gets cold out? What happens when we put the grill facility in somewhere that’s not, you know, like a pre engineered metal building, these are all kind of components of that equation, add them as an ownership to that you need to understand so in many ways, you have to understand both sides, you have to understand the GC and the subs are doing. At the same time. You also have to advise the client on what their best interests are, while simultaneously understanding how to grow cannabis. So it’s really a three phase kind of situation that we deal with at higher yields

 

Scott Higa  09:36

from from a development perspective, that the general contractor is brought in to look at the cost of a project and the timeline of the project. And in a design build environment, which I think is what we may be referring to here. The general contractor is an integral element in in helping the owner understand, cost, perhaps substitutions to the project to help with both costs and a timeline. And it really helps the design process with the architect and the engineer because the design process is, is helped by the knowledge and experience of a general contractor on the equipment and construction side. In a good strong owner’s representative helps steer the project in the right way. That’s also a very important component in the project. So it has direction and it doesn’t become rudderless.

 

Adam Kulbach  10:45

Okay, Jesse, you’re our resident design build expert at h yc. Once the site plan is set, or in motion, where do you start with the fun areas like cultivation and extraction?

 

Jesse Larson  10:59

Oh, you know, to kind of piggyback off of what Scott said a little earlier that, you know, a lot of times, those areas are going to be in consideration and in development in conjunction with the overall facility as a whole, being able to understand what the end goals are for the facility, being able to understand the density of those bill of those rooms, their their electrical poles, their HVAC needs, their plumbing requirements, are all going to be really they, they they need to be understood in the beginning and then refined a little bit later, throughout the process. And so we usually, right after the creation of that site, Plan D, all those rooms really need to be able to tie in to to a service entrance within that facility. And, and that site plan is really going to dictate, you know, what side of that building what, how far into or out of some of the building, we’re going to have to run piping, or electrical wiring and moving panels, it all becomes kind of a kind of a moving process during during that design phase. And understanding everything that’s going into those rooms, is is very important. Making sure that, you know, these, these areas are designed properly, like kind of tying back into what Scott said, and in any compliance and regulatory form that may need to be considered with with the design, heights of racks can start to trigger special special use permits as well as fire suppression needs, that can impact the growth method and the growth strategy for within the rooms. All that needs to be taken into consideration with the growers method, and how dense a lot of these rooms are going to be in consideration to ingress and egress routes. Being able to get out of these rooms, in case there is an emergency is always really important. And it’s always something that I see companies getting gigged on not only within the US but internationally as well. You know, likewise, you know, with with, you know, a really good communication set of communication standards, you know, for the team is always going to be important, all the equipment, or well, I shouldn’t say a majority of the equipment going into these rooms are going to have some sort of electrical pole, which is going to dictate that overall service going into the building. And like Scott said, that’s that that could really push the timeline out for for the construction and they end the standing of one of these facilities. Being able to not only, you know, start to phase in start to kind of do a phase development within the facility, being able to understand what is what are your what’s your low hanging fruit, and what we’re able to get in there, along with not only maintaining compliance, but keeping the end goal for the the facility in mind. Yeah, yeah, you know, and you know, those those lead times are going to be one of the biggest things when it comes to developing these rooms out anything involving him microchips and processors, which is pretty much everything these days are going to be there you’re going to be your longest lead items. And so understanding not only the growth theory behind these rooms and the beginning of the process and the and the development of that site plan, understanding where all these rooms are going to eventually tie into in that site plan and then being able to plan accordingly from there, and ensure that these rooms and the facility as a whole not only meets compliance, but it’s going to be effective in operation as well.

 

Adam Kulbach  15:11

So once all the equipment comes from different manufacturers, how does it eventually work together in the facility? And how does that impact the operation?

 

Brent Vogt  15:23

Well, I suppose that’s a pretty loaded question. Your job is to marry all the systems together, physically speaking, right? That might seem obvious, but it’s a lot harder than people realize. You’re trying to, you know, marry electrical power, HVAC, plumbing, also known as like MVP, along with the fact that you’re growing these these cannabis plants in inside the building and not outside of the sun. So taking all that information along with scheduling, and like lines of communication nowadays, supply chain problems, labor, right, and you have to take all that information, put it together in one holistic piece, and understand how to communicate that not only with your general contractors, but also your clients, right, because your general contractor is usually just building the building, right? We’re responsible for providing all the inner inputs that go on inside this building, right? At the same time, as we know as COVID. I mean, there’s these lead times have increased exponentially. So how do you continue to advise your client on the situation, work with the general contractor, as they’re building structure, get things in on time, and marry that whole relationship from start to finish, while simultaneously understanding all these factors that go into the equation. In my experience, that’s very difficult to do. So I think what we offer at higher yields is a much more holistic point of view on not only general construction conditions, subcontractors and things like this, what the client needs what they want, they want to produce a great product that sells a lot of money that make a lot of revenue. And at the same time, we need to be able to advise both those sides of the equation and how to do this stuff efficiently and effectively, while simultaneously not being able to get our to use for example, for 50 or so weeks. Right? So that is the that is the challenge that we face nowadays. And that’s why our team is equipped to handle these types of situations.

 

Adam Kulbach  17:15

Okay, thanks. It sounds like your vendors are crucial to continued innovation in his facilities. How do you find them? And how do you find who you can trust?

 

Brent Vogt  17:27

Great question. I think Jessie and Cory have done a lot of the legwork with regards to finding the right vendors. And I think that trust is built over a long time. I also think that, you know, I met some people, I feel like I could trust right away. And so I know that they’ve vetted these people throughout the years with regards to their own grows and things like this with regards to other clients growing facilities. And although I can’t speak to how they arrived at those conclusions, I can tell you that the people I work with and the people we work with, are very solid people, they’re very talented, they’re really intelligent, they understand the needs of this business, they understand the folks that are going to be successful in this business. And working with them, quite frankly, it’s been a big joy of this whole process that you can call somebody up and say, What do you think about x? What do you think about y? Okay, what about Z? Okay. And you find solutions rather quickly, on sort of, again, a holistic point of view, and on very amendable terms. And so, however, Justin quarry reached those conclusions along the way, I guess, I don’t know, I’m not privy to those stories, but I do know that it Good job. So I appreciate that.

 

Jesse Larson  18:33

Yeah, and, you know, kind of piggyback off of that, you know, vetting of equipment. Not only its construction, its installation, but its uses in and its compliance is always important. And, and like Brian said, understanding holistically, the end goal of the facility is always going to be paramount to not only equipment selection, but how it’s implemented into the process for that facility. A lot of the times for equipment, you know, being in this industry since 2015. Seeing a lot of companies come and go, a lot of the cream has has risen to the top already. And a lot of those companies have very good track records when it comes to not only past projects, but happy customers being able to not only check in with those customers and see how the equipment’s been holding up, see how the, the service, not only around warranties if anything is broken, but you know, if there’s some troubleshooting issues, you know, how can how easy are they to get hold of that midnight on New Year’s Eve? For a set of equipment that’s down and you know, that that’s, that’s, that’s something that you know, within cannabis and the development of this industry and kind of the maturing starting to mature are a little bit of this industry, we, you know, we’ve seen a lot of and so really checking up on on past projects, you know, understanding that, that not everything is perfect understanding that life happens for a lot of these companies and a lot of these these businesses and and clients there’s but also, you know, understanding that communication and transparency is important as well, too. Sometimes an equipment vendor is not going to be the best fit for job. And that that honesty right up front, is something that endears someone to me and makes me want to work with him even more. Because nobody wants to pass up business, and especially in this economy. And with the challenges we’re going to be facing over the next 1218 months, it’s, it would really behoove a lot of people to get as much business as they can’t. And so that type of humility and transparency is always important to know, in a, in a, in a equipment manufacturer and partner for one of these facilities.

 

Brent Vogt  21:06

100%. And I would, I would continue on with that, by saying that, that Jesse is extremely good at understanding the needs of the client or needs of the space, and communicating that to our vendors. And they and to his point to his statement, he really, these people really appreciate the honesty and the transparency. And so I think, from the point of view of working with folks for many years, and and like he had mentioned the cream rises to the top is that sometimes you got to say, hey, I don’t think this is the right fit for you. But next time, x, right. And so I think that, again, Jesse’s very good at understanding the dynamics of how these components work within the facility, what vendors are going to work and what are not going to work, but also informing these folks that this is not the time today, but tomorrow might be totally different. And I think that they really appreciate that. And that’s why people keep coming back and submitting bids to some of these projects. I think.

 

Adam Kulbach  21:57

So commercial construction has been shaky since COVID. Started, what are some of the biggest wildcards that New Cannabis developers should look out for? And what are some of the ways to mitigate their impact?

 

Brent Vogt  22:10

Well, I’ll start, I think, obviously, the biggest problem, as I mentioned earlier, is just supply chain. microchips are a big issue out of Southeastern Asia are to us are a big problem. Nowadays, generator capacity is at like a year and a half right now, if you want to order a new generator. So I think that one of the ways to mitigate that risk is to find a building, you can build and quite frankly, whatever size that may be 10 25,000 50,000 square feet already have your building constructed. Or if you wanted to build a new building, that’s fine, I guess, there’s just certain amounts of delays when it comes to getting the right bouncing of air and the MVP components and things like this. So as long as the client knows that, that’s fine. They want to start, you know, a year, year and a half down the road, they want to build their grow facility, they get the findings in for it like some of our clients do. Totally fine, right? Same time. If you can find a building that fits, you could probably get that thing to market a lot faster. In our experience, right, you could cut down that schedule significantly. And so I don’t know if Scott and in just a few guys agree. But I think that maybe having sometimes having a box that you already have and you got to work with it is much more advantageous than trying to do whatever you can in a wide open space. Just my experience.

 

Scott Higa  23:22

Yeah, I can add to that, as well, Brent. One of the real wildcards for any project is the quality of the due diligence. When the when the project is starting, there should be some broad understanding of the big picture. And then as you get into the details with, you know, with the jurisdiction, or the power and the cooling or challenges with utility companies, it helps set the project up for success. If you if you skip, or you don’t have proper due diligence, you really will begin to run into problems in design and ultimately in construction. So I think that’s, that’s a wildcard that should really be put at the top of anybody’s list is proper and thorough due diligence, and the project is set up to succeed.

 

Adam Kulbach  24:23

So what are the differences in expense between an existing facility versus building from scratch? How big is the difference?

 

Scott Higa  24:36

I can, why don’t I start with that one, Adam. Certainly when you do a, a new build, it’s a much larger cost impact because you have the site to have to deal with as well as the building. If you’re doing a remodel project, you are essentially working with just the building And, and then one has to work with the bones of the building the structure, power and cooling. And that’s, that’s a smaller dollar amount and then developing the site in a building,

 

Adam Kulbach  25:13

there are so many variables to these facilities that we have discussed, where do software and data come into play in these facilities?

 

Jesse Larson  25:23

You know, for a lot of the facilities in the past the they they’ve been limited by some constraints, usually surrounding budget. And a lot of the technology that was available a few years ago that was becoming really big is now some of the hardest items to start to source. A lot of them do require microchips and processors, and, and well, we’re starting to ramp up some good manufacturing here in the US, it’s still gonna be a while before a lot of that kind of comes back online, I think, for majority of the facility, and the the tracking, and the implementation of technology is always going to be important, as long as it doesn’t come at a detriment of the effective effectiveness of the facility and an over reliance on set technology. At the end of the day, you are doing indoor agriculture, and you know, there, there are elements of this that are extremely simple. Whites or plants only need, you know, light water, and a place to grow. And they’re going to grow. And so and everything from there, you know, start to bring your complexities in not only nutrients, but timing, and that kind of stuff where the specialist or specialty comes in for that master grower, or grower in charge of that room. And yeah, you know, there’s there’s always, there’s always good data to be collected to be collected, especially when if that facility is not performing to what its expectations or, or internal standards are, there is there is an abundance of tracking material to not only measure the amount of water reaching the roots of the plant, the light density on each leaf and the temperature on each leaf moving all the way to you know, plants, sway, it’s it’s overall stem strength. For the plant itself being measured. A lot of this, like I said, you know, tends to breed and over, over, over reliance on the technology itself. And likewise, you know, with the current situation for, for the technology, it’s kind of it’s it’s a long lead item. And so under if you if it’s going to be implemented into a facility full fledge, understanding what its role going, it’s going to be within the facility, and perhaps starting out small and then implementing it at a at a phase kind of development into facility would be would be good. Overall, a lot of these facilities do have a overarching control mechanism that usually controls elements of your fertigation and irrigation, your lighting and HVAC. Those are always good to have. That’s always that’s always something I recommend, because being able to put it in one spot, and being able to have that type of control. And monitoring for those for those rooms. And for those areas of your environment are going to be very important.

 

Adam Kulbach  28:44

Well, that’s about all the questions that I have for now. Would anybody like to add any final thoughts?

 

Scott Higa  28:49

No, no, I was gonna, there was a bullet point here, bringing everything together in the end to seems very difficult. I would just add in, I think Brent spoke to it earlier. The project needs a good quarterback. If you have that good quarterback in place, it really helps bring everything together and helps a coordination. It helps linking the contractor, the design team and the owner together. So when you have a good quarterback, good point guard, it really helps the whole project from start to finish. Yeah,

 

Brent Vogt  29:31

that’s Scott, you’re exactly correct. And I think that that’s probably where a lot of construction projects go wrong. Right is nobody knows who’s in charge. And so is it the superintendent is the project manager is the GC is the owner’s rep. And I think that in a lot of situations where I’ve seen things go south, it’s because nobody really knew who that person was man or woman. Right. And so, I think for us, and for our clients and our the Jo contracts that we’ve worked with, it’s extremely important to come out and establish who is in control right away and let them know. And we can work in the scenes with higher yields. And as an organization in the background, to liaise with people like Jesse, people like yourself, people like our CEO, Cory, our Chief Revenue Officer, Anthony, and be able to establish united front in that regard. And then people have this natural tendency to sort of follow the leader, right. But when you can come in, like, like us in this situation, and you’ve got all this sort of general contractor, subcontractor, grow experience, facility, experience, client experience, and have the whole picture together a whole holistic package. That’s pretty substantial ability. And I think that when it comes to that there’s nobody else in this industry that can touch that. So thanks for bringing that up. I appreciate that.

 

Adam Kulbach  30:49

Well, I guess that’s about it. And I’d like to thank you guys so much for all your great information. And thanks for being here.

 

Scott Higa  30:58

Thanks, Adam. Thank you, Adam. Thank you, Adam. Have a good day. Have a good day.

 

Adam Kulbach  31:18

Well, thank you for listening, everybody. For more information about our podcasts, or to add suggestions. Or if you want to be a guest on our show, check out the description below. Or please call us at 844 High yield, that’s 8448 Chai y i e LD. And also check out our website at higher yields consulting.com. There you’ll find all sorts of great information and all of our previous podcast episodes. We hope that you’ll join us for our next podcast coming up very soon. So until then, thank you very much. Have a great day.