Tantalus Labs is the only licensed cannabis producer in B.C. to cultivate its products in greenhouses, which require less power to operate than indoor facilities. The company’s first harvest has revealed the product quality to be higher than expected, which may reduce business expenses for other producers. | submitted

Black-market cannabis production is a clandestine affair.

So most expert growers, some of whom have made the transition to licensed medical marijuana production, have been predisposed to cultivating through indoor facilities rather than greenhouses, according to Tantalus Labs founder Dan Sutton.

His Maple Ridge-based company is B.C.’s only licensed cannabis producer using a greenhouse, and results from its first harvest could forecast changes in both cultivation practices and business costs for the nascent industry.

Tantalus Labs cultivated its first harvest in late January and early February, a test batch before the product hits the medical marijuana market.

Traditional indoor facilities provide more intense light and more rigid environmental controls.

But greenhouse facilities consume less energy than their indoor counterparts, lowering production costs.

“We used a third or we used a quarter of the light recommended, and nonetheless yields, potencies and growth rates were all exceptional based on our knowledge,” Sutton said.

Preliminary results from Tantalus Labs’ first harvest suggest greenhouse production had an average daily light integral (DLI) below 20 compared with indoor growers’ average DLI of 60 to 120.

DLI measures the amount of light particles received in a single day in one square metre of space. Higher DLI levels typically mean better growth for plants.

But Sutton said the first greenhouse harvest shows this long-held assertion isn’t necessarily true.

Tantalus Labs' first harvest suggests greenhouse production is capable of producing high-quality cannabis at lower costs | submitted

“The knowledge base that we had coming into this was a combination of what little is out in academia, and we have one core cannabis specialist,” he said, adding his team’s expectations were based partly on intuition and partly on superstition.

“And we realized a lot of the common thinking, especially on daily light integral, is just not accurate.”

Sutton, who emphasized he is not a scientist, said his best hypothesis is that lighting used at indoor facilities can’t “hold a candle to the spectrum breadth” of natural sunlight.

From a business perspective, he said greenhouse cultivation would allow producers to reduce costs and cultivate at a price that’s more sustainable as the industry becomes more competitive in the coming years.

“At the end of the day every company is growing and producing product differently, and certainly there’s pluses and minuses for different reasons to different methodologies,” said OrganiGram CEO Greg Engel, who oversees an indoor licensed cannabis producer in New Brunswick.

He acknowledged that greenhouse facilities benefit from lower costs, but those benefits are somewhat negated on the market.

“Producing a higher-quality indoor product allows you to have potentially a margin differentiation,” Engel said. “So you’re going to be able to sell at a higher cost because the market is going to and does perceive it as a higher-quality product, so that’s the strategy of indoor [production].”

Although it’s unlikely OrganiGram would ever replace its indoor facilities with greenhouses to cut operating costs, the CEO said he is “actively pursuing” potential greenhouse opportunities.

“But primarily more for … a lower-cost material for extraction for food, edible products and extract-based products, derivative products in the future,” Engel said.

Meanwhile, Tantalus Labs’ 120,000-square-foot facility will soon have a greenhouse rival in B.C.

The country’s largest producer, Canopy Growth Corp. (TSX:WEED), plans to spend $20 million on a joint venture that would create a 1.3-million-square-foot greenhouse facility on the West Coast.

Canopy Growth, which owns Ontario-based greenhouse cannabis producer Tweed Farms Inc., also has an option in the joint venture to develop a second, 1.7-million-square-foot greenhouse facility in B.C.

It plans to have products on the market by this summer.

Canopy Growth did not respond to Business in Vancouver’s interview request before deadline.

Meanwhile, Sutton said more companies need to examine the environmental and business potential of greenhouse production despite the lack of aggregate knowledge of cultivation processes.

“Greenhouses are a worthy nut to crack,” Sutton said. “You don’t need to be a granola-munching hippie; you just need to be self-interested. You just need to look at your bottom line and how to cultivate cannabis in the most efficient way possible for your business.”

torton@biv.com

@reporton