Apr 3, 2023·edited Apr 3, 2023


Thanks for sharing another write up.

With respect to economies of scale being non existent in Cannabis, I agree with indoor, as that has proven out to be the case. Small grows can be just as efficient as huge grows.

But for a high tech greenhouse *on the coast of* southern california it appears to be a different story. Glasshouse has lowered their cost of production by about half in their first year of expansion, with a goal of $100 per pound (Graham Farrar recently doubled down on this goal, saying he thinks they'll get it below $100).

I know you have pointed out Sunniva as another company that tried and failed with a high tech glasshouse in Cathedral City, CA. And you've also pointed out that Canadian LPs have also tried and failed with large high tech greenhouses.

Cathedral City, CA Santa Barbara, CA

Weather averages Weather averages

MonthHigh / Low(°F) Rain days MonthHigh / Low(°F) Rain days

January70° / 47°2 days January65° / 45°5 days

February73° / 49°2 days February66° / 47°5 days

March80° / 54°1 day March67° / 49°5 days

April86° / 58°0 days April70° / 51°1 day

May94° / 65°0 days May70° / 53°0 days

June103° / 72°0 days June72° / 56°0 days

July108° / 80°0 days July76° / 59°0 days

August107° / 79°0 days August77° / 60°0 days

September101° / 74°0 days September76° / 59°0 days

October90° / 64°0 days October74° / 55°1 day

November78° / 53°0 days November70° / 49°2 days

December69° / 46°1 day December65° / 45°4 days

Sunniva was in the right state, but wrong region. Half the year the highs in their location are between 90 and 108 F, which is entirely too hot. From what I'm finding, they were aiming towards a cost per gram of $1.15 or about $520 per pound. I would imagine keeping things cool enough in the summer was an issue.

I don't need to post the weather for Edmonton (Aurora Sky's location) because everyone knows it gets entirely too cold for cannabis growing. From what I'm finding, they were aiming towards a cost per gram of $.75 or about $340 per pound. I would imagine keeping things warm enough in the winter was an issue.

So scale alone is not a meaningful competitive advantage, I'll agree with you on that.

But scale plus the perfect climate plus high tech greenhouse plus a lot of experience and talent does seem to be a meaningful competitve advantage. Unless Glasshouse is completely fabricating their numbers and Graham Farrar is being totally dishonest in saying they will get to $100/lb.

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