Client 3, Full Cultivation Management Case Study

Industry: Controlled Environment Agriculture
Facility Size: 46,000 ft²
Canopy: ~11,000 ft² (8,000 ft² flower, 3,000 ft² vegetative)
Brands: Motivator, Resin8, Tidal – Top 3 brand in Nevada (BDSA, Headset)
Project Duration: March 2020 – January 2022

Overview

Client 3, a top cannabis producer in Nevada, faced significant challenges, including inconsistent biomass output, microbial failures, and high production costs. To address these issues, Urth & Fyre was brought in to implement a full cultivation management program designed to increase efficiencies, reduce costs, and ultimately improve profitability.

Initial Challenges

• Inconsistent biomass output: The facility struggled to consistently produce large yields, resulting in unpredictable production and sales cycles.
• Microbial failures: The failure rate due to microbial contamination was high, impacting overall product quality and marketability.
• High production costs: With cultivation costs soaring as high as $2.97 per gram, profitability was being eroded.

Goals

Urth & Fyre’s objectives were clear:

1. Increase Yield Efficiency: Improve grams per square foot and total yield.
2. Improve Pass Rates: Reduce microbial failures and enhance product quality.
3. Cut Production Costs: Lower the cost to produce per gram through operational efficiency.
4. Maximize Profitability: Ensure the facility's operational costs align with industry best practices to drive long-term profits.

Solutions Implemented

1. Tenant Improvements & Facility Design

We redesigned the facility's environmental systems, optimizing the latent load and lighting configuration. This included the installation of:

• Flowering: (560) 315w CMH and (320) 1000w HPS lights
• Vegetative: (66) 315w and (84) 630w CMH lights
• Totaling 1,030 lights with 551k watts of power.

Improvements were made to airflow, fertigation systems, and plant density configurations, with rigorous biosecurity and cleaning protocols established to minimize microbial contamination.

2. SOPs & Maintenance Programs

A comprehensive set of Standard Operating Procedures (SOPs) was developed, including facility audit schedules, inventory management, and continual maintenance programs. These SOPs were designed to improve the efficiency of daily operations and maintain consistent environmental conditions.

3. Labor Optimization

We dramatically reduced labor costs by streamlining processes. The facility’s cultivation labor was reduced from 22 staff members in 2020 to just 8 in 2021. This workforce reduction, combined with more efficient management, resulted in significant savings while maintaining productivity.

4. Biosecurity & Post-Harvest Automation

By implementing cutting-edge biosecurity measures and automation in the post-harvest drying and curing rooms, we drastically reduced contamination risks. These protocols ensured cleaner crops and higher-quality final products.

Results

Yield Performance

• 2020: 3,034 lbs of cannabis at 28 g/ft²
• 2021: 7,071 lbs of cannabis at 67 g/ft², more than doubling the yield and dramatically increasing the grams per square foot.

Microbial Pass Rate

• 2020: 65% of the product passed microbial testing.
• 2021: 83% pass rate, significantly reducing product losses and ensuring a more consistent quality.

THC Content

• 2020: The average THC content was 20.1%.
• 2021: THC potency improved to 22.1%, increasing the value and desirability of the product.

Cost Reduction

• 2020: $2.97 per gram
• 2021: $1.72 per gram, reducing production costs by over 40% and aligning with industry benchmarks.

Financial Performance

• Sales: The blended sales price was approximately $1,400 per pound.
• 2020 Revenue: $4.2 million
• 2021 Revenue: $9.9 million, with a net profit of $4.38 million, driving a cumulative profit of $4.54 million after just two years.
• CAPEX: A one-time investment of $404,000 into tenant improvements yielded a 1024% return on investment (ROI), with a payback period of just 1.04 years.

Return on Investment (ROI) Breakdown

• CAPEX: $404,000
• 2021 ROI: 1024%
• Payback Period: 1.04 years
• Internal Rate of Return (IRR): N/A, but the ROI and profit margins demonstrate a highly profitable operation after the implementation of Urth & Fyre's recommendations.

Client Testimonial

Ckuebt 3, CEO:
"Partnering with Urth & Fyre was the game-changer we needed. Their team helped us achieve operational efficiency beyond what we thought possible. They reduced our labor costs, optimized our facility, and ultimately led us to a record profit year in 2021. The ROI was astounding, and we saw results in just a few months. Their comprehensive approach to cultivation management has set us up for continued success."

‍
Curious about how your facility can achieve similar results? Contact Urth & Fyre today for a FREE facility profitability assessment and tailored Biosecurity SOPs to enhance your cannabis production.