Cultivation: Planning for Catastrophe

Do state regulations have you worried about your business?

Taking proactive measures, such as investing in the infrastructure of your grow space and establishing loss control in cultivation operations, can help you avoid situations that could be catastrophic to your grow.

These measures can also serve the dual purpose of saving your business’ bottom line.

Just ask Jerry Velarde, the president of Evergreen Organix in Nevada.

Evergreen Organix cultivates flower, manufactures edibles, and produces other cannabis-infused products. However, in Evergreen Organix’s first grow season, around 130 lbs of product failed state testing requirements.
“That mistake cost well over $3 million in capital,” Velarde said, accounting for expenses, including product and labor hours.

“Factor in lost time and revenue and add another $2 million to that. That money is just gone.”

After this catastrophic event, Velarde attributed the losses to wintertime humidity, a lack of dehumidification units in the cultivation space, and a team that was not ready to handle the size of the facility – all of which are factors that could have been planned for and avoided.

In the time since, Velarde has re-structured his cultivation team, converted his crop from a deep-water culture system, to a no-till permaculture soil, and has implemented quality-control measures to ensure testing success.

Velarde’s experience can serve as an important lesson to current and prospective growers in the space; make sure the proper measures are in place to minimize loss. This includes having the proper insurance to cover your grow, including live crop, inventory, and the equipment used within the grow.