Monday, June 24, 2024

Outdoor Grows Will Uproot The Cannabis Industry

 

Gardening is a huge hobby in the US and agriculture is a massive industry.  Cargill, ADM and CHS are behemoths in agribusiness producing billions of dollars in revenue and using 100s of thousands of acres.  Iowa, Minnesota, Nebraska and California has large swaths of land devoted to outdoor agriculture.  Wheat, cotton, peanuts, soybeans and tobacco still drive part of the Southeast economy.  As state and federal legalization comes to the cannabis industry, outdoor grow is going to uproot the investments in indoor grow.

A recent article in Cannabis.net shared someone was able to buy marijuana in Brazil for retail $.30 an oz.  In the US, the basic cost of growing an ounce of weed is $29.50. This is before it is sold to a producer who then makes a product and sells to a retail, who then sells it to a customer. If trends hold, outdoor grows will uproot the cannabis industry.

RELATED: New Survey Shows Gen Z Prefers Weed Over Alcohol — Why Is This?

growing marijuana
Photo by skodonnell/Getty Images

Some leaders in the industry have been touting the benefits of indoor grow. Tilray’s entire grow side is all indoor. So there is a huge vested interest. But Hershey is the largest chocolate company and Bud Light is still the number one beer.  Walmart, Amazon, Costco and Target and the largest retailers.  Consumer prove over and over they want good flavor at a good price.

So why is indoor more prohibitive? Both share some same cost of labour, plants, water, insurance, etc.  A varying cost is land.  With outdoor grow the larger piece of land, the larger the crop.  With indoor grow, the larger the land, the larger to cost of the building and its expenses.  It is usually a huge upfront cost.  Now add indoor’s grow cost of building maintenance, fluctuating energy prices and limited size of your crop and your get expensive flower.

RELATED: What Americans Are Watching When No One Is Looking

The indoor industry’s next big push is the reasoning is they can grow year round. But is it cost effective and worth it?  Some of the largest agriculture states are Nebraska, Illinois and Iowa, known for harsh winters and shorter growing seasons. Canada’s bountiful crops not only sell in country, but are exported to China, the US and more.

RELATED: Consumers show industry potential in 4/20 marijuana sales

When you look at outdoor agriculture in the the US and Canada it is a $1,296 trillion industry.  And that is a case for strong outdoor grow.

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