19cannabisbusinessinsights.comJUNE 2025standards for runoff or leachate, limiting it to below 10 percent across our entire operation. This commitment ensures that only a minimal portion of the water we use ends up as runoff, optimizing water usage and supporting the plant's transpiration goals.Our comprehensive water management approach involves assessing how we generate clean water, the technology we employ, and stringent vetting of companies for a deep understanding of their technologies. Equally vital are our operational practices, ensuring that the water we produce is utilized efficiently, reflecting our dedication to sustainable and responsible cultivation practices.Can you elaborate on the significance of recent technological advancements in indoor farming, particularly the transition to more energy-efficient lighting systems?In addition to technological advancements in indoor farming, the decade-long transition to LED lighting stands out as a milestone. Unlike traditional crops, cannabis demands 20-30 percent more light, making the shift to LEDs crucial. This transition is particularly noteworthy, considering the challenges associated with traditional HID bulbs. Consequently, states like California have enforced deadlines for businesses to make the switch. Good Day Farm is committed to LED technology, having already implemented it in 90 percent of their operations and aiming for complete coverage by mid-next year. This commitment spans over 250,000 square feet across six sites in four states. The result of this dedication is multimillion-dollar savings, highlighting the dual benefits of improved lighting efficiency and reduced HVAC demands.Regarding technological advancements, HVAC emerges as a critical factor, connecting to the broader question of technological gaps. In the cannabis and indoor farming sectors, specific HVAC companies are targeted, often specializing in technical water-chilled systems due to their efficacy, variability, and consistency. While these systems offer enhanced performance and reliability, they present challenges due to their complexity and higher costs. HVAC constitutes a substantial portion (20-30 percent) of new build-out costs, making the selection of the right system crucial for long-term success, especially considering the limited opportunities to secure substantial funding for cultivation assets. The evolving demands of HVAC in indoor farming, particularly in accommodating plants exposed to intense LED lighting, necessitate ongoing advancements and a focus on companies capable of addressing the unique challenges posed by this industry.What key challenges do you see in advancing technology for indoor farming, especially in integrating HVAC systems?HVAC and environmental management technology pose significant challenges in the indoor farming industry. Beyond the equipment itself, the business model of HVAC companies, which relies on service agreements, contributes to ongoing issues. Components such as compressors, fan systems, and variable speed drives frequently fail, necessitating the development of more efficient and modular systems.The contrast between companies like York and Desert Air highlights challenges in achieving precise control over the environment throughout the plant's daily lifecycle. There is a recognized gap in HVAC performance for systems that can be modular and respond accurately in real-time to changing demands.Another focal point is dispelling pseudoscience and anecdotal decision-making prevalent in the cannabis sector. This underscores the need to prioritize plant biology and science for effective system manipulation. Additionally, workforce management and employee training in the cannabis sector remain challenges, with misconceptions persisting about the level of manual labor and traditional farming practices involved in indoor farming.What would be your piece of advice to your fellow peers as to how they can be successful in the industry and for upcoming professionals as well?To thrive as cultivators and leaders in the emerging cannabis industry, it is imperative to delve into the "why." Understanding plant science, curing techniques, and the intricate details of environmental factors such as lighting, HVAC, vapor pressure deficit, temperature, and humidity is essential for daily success and consistency in cultivation. Michael identifies a significant knowledge gap among leaders regarding the intimate knowledge of how plants are produced and the levers that can be pulled for desired changes. While many businesses focus on outcomes like yield and potency, they lack insight into how these results are generated within their facilities.Michael advocates for a continued pursuit of understanding the "why" and encourages individuals aiming for advancement to specialize in a particular aspect of the business, becoming subject matter experts. Lifelong learning is emphasized, urging individuals to surround themselves with those more knowledgeable and constantly seek improvement. Michael acknowledges the overwhelming nature of the cannabis space but underscores the importance of adopting a mentality of lifelong learning.Finally, emotional maturity is highlighted as crucial for navigating the industry's challenges, dealing with uncertainties, unorganized practices, and embracing the positive and negative fluctuations inherent in the cannabis sector. We're strong advocates of LED tech, now at 90 percent across 250,000 sq ft of indoor canopy across six sites in four states. This specialization has yielded multimillion-dollar savings in utility and HVAC usage
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