Inside a cannabis greenhouse.
Inside a cannabis greenhouse.
Nate Nichols

It's Cheaper to Grow Pot in Arizona in Greenhouses Than Indoors, But Is It Better?

You would be forgiven for not recognizing the nondescript brick warehouse in Phoenix’s Grand Avenue industrial district as the site of a high-tech agricultural facility.  

But as soon as you step inside, the smell of hundreds of marijuana plants is overwhelming. As you make your way through the small rooms that line the main hallway, you can hear the whoosh of ventilation fans and the gentle hum of huge artificial lights suspended above a lush green canopy of leaves. Reggae, old-school hip-hop, and pop-punk blare from a portable speaker as a crew of 30 or so workers trim, water, and inspect the all-female crop of cannabis plants casually known as “the ladies.” 

A relaxed grower, originally from Colorado, gleefully announces, “The plants respond to the type of music you play them.” 

The plants also respond to all the energy it takes to power an indoor grow facility like this one. That results in some pretty hefty electricity bills. 

So why grow pot indoors, particularly legal pot? Why not stick it in a field and rely on the strong Arizona sun? Arizona’s medical marijuana law and local ordinances stress the importance of security and discretion, making indoor growing an easy sell to regulators worried about public perception. But there’s another option: the greenhouse, a cross between indoor and outdoor growing that relies in large part on the sun. 

The energy savings associated with growing cannabis in greenhouses are undeniable, says Mark Steinmetz of Nature’s AZ Medicines. His company operates both indoor and greenhouse facilities. 

Steinmetz estimates that he can power his 14,000-square-foot indoor complex for $25,000 a month in the summer — the same amount it takes to power his two greenhouses, which cover more than 100,000 square feet. 

But in the cannabis cultivation business, “greenhouse” is a dirty word. Not only are there environmental factors to take into account, greenhouses have long produced inferior marijuana in a world where boutique cannabis is practically a given. 

“I even hate to say the word greenhouse. I kind of cringe a little bit every time I say it,” Steinmetz admits.

He and others are out to change that. 

Mark Steinmetz and Gerry Wilson in their Tucson-area growing facility.
Mark Steinmetz and Gerry Wilson in their Tucson-area growing facility.
Nate Nichols

The national legal marijuana market reached nearly $5.5 billion in revenue in 2015, and is expected to grow to $21.8 billion by 2020, according to a report by ArcView Market Research, a national cannabis investment group. 

But just how are these gardens of cannabis grown? Hard to say. National statistics on marijuana cultivation are largely unavailable. The DEA and FBI track plant destruction and seizures related to illegal cultivation as well as arrests for possession, manufacturing, and distribution of marijuana. But that sheds little light on legal marijuana markets.

In 2015, Arizona dispensaries grew and sold more than 19 tons of medical marijuana, according to the Arizona Department of Health Services. Arizona officials track weight, not price, but New Times estimates that in 2015, Arizona dispensaries were responsible for more than $215 million in revenue. Anecdotally, we know that the vast majority of this valuable crop is grown in energy-intensive indoor facilities like the Grand Avenue warehouse. 

And making that happen burns a lot of fuel. 

A landmark study in 2012 provides some of the best data on energy use in marijuana cultivation. Evan Mills, a senior scientist at the University of California, estimates that each marijuana cigarette or “joint” that reaches the hands of a consumer is equivalent to using a 100-watt lightbulb for 25 hours or driving almost 23 miles in a hybrid car.

Even more startling, according to Mills: “The indoor cultivation of marijuana uses $6 billion worth of electricity every year, which amounts to 1 percent of overall U.S. electricity.”

That was four years ago. Energy use stands to increase as states across the country move to legalize marijuana. Arizona will consider legalizing recreational use in November. 

If the medical marijuana cultivation industry in Arizona is any indication, indoor growing certainly dominates. 

According to the Arizona Department of Health Services, there are currently 99 state licensed dispensaries, 79 of which have approved cultivation permits. Tom Salow, a branch chief in the Division of Public Health Licensing Services with AZDHS, says his office doesn’t track such things — but he’s pretty sure that only three of Arizona’s sanctioned growers use greenhouses. 

Although marijuana has now been legal for medical purposes in Arizona for the last four years, you would be hard-pressed to notice much innovation in the industry. In buildings that more closely resemble fortresses than farms, master growers operate increasingly large facilities. Some are home to only a few plants, while others have thousands. Facilities can range in size from a few thousand square feet to 100 times that size. 

And around here, bigger is definitely better for dispensary owners. Unlike many other states with medical or recreational marijuana, Arizona has no limits on the number of plants a dispensary can cultivate.

As cultivation facilities increase in size, so too can the headaches caused by poor practices. Most growers are using the same practices that made them successful years ago with their first closet-, garage-, or basement-grown harvest. 

One of the biggest inefficiencies, currently, is the fact that these growers are forced to re-create the power of the sun using artificial lighting. 

But the greenhouse method is not without its challenges. Even the growers at Mark Steinmetz’s Nature’s AZ Medicines admit that it’s often easier to grow marijuana indoors. 

Because greenhouses are more open to the outdoors than traditional indoor cultivation facilities, they face unique problems. Constantly exchanging air by pushing out stale air and drawing in fresh air from the outdoors leaves greenhouses more susceptible to problems that don’t affect indoor facilities as often, including the ability of pests to enter, bringing in molds and mildews that are prevalent in nature; the inability to control the indoor climate; lack of interior rooms to contain infestations; and potentially inadequate lighting, depending on the location.

For these reasons, Jennifer Gote, a Phoenix-based marijuana cultivation consultant who works with dispensaries across the state, is still partial to indoor cultivation. 

“Indoor cultivation offers a lot more control,” she says. Gote believes that the ability to precisely control the environment can result in a better quality medicine. 

“There is absolutely a quality difference between indoor and greenhouse marijuana. Indoor is much higher quality.” 

She doesn’t dispute the energy savings — just the quality. 

“Greenhouse will always come in lower cost. But will the quality be there?” 

An exterior view of the Tucson-area greenhouses.
An exterior view of the Tucson-area greenhouses.
Nate Nichols

In the beginning, of course, all the pot grew outside. 

Cannabis is believed to have first been cultivated many thousands of years ago in the area north of the Himalayas. It has been prized by civilizations around the globe and used for medicine, textiles, nutrition, and religious ceremonies. After two millennia of human use, cannabis was an accepted part of many societies’ pharmacopeia.

When the colonists arrived in North America, they brought their love of cannabis with them. 

By the 1800s, plantations had sprung up throughout the American colonies, dedicated to the growing of hemp for industrial purposes. Preparations of the plant could be found at many drug stores, and were an accepted product for medical use, even in children. 

A drastic change in public opinion surrounding the plant took place in the early 1900s. Increasingly, the plant was called by its Spanish name, marijuana, thereby associating it with the large influx of Mexican immigrants that arrived in the U.S. in the early years of the 20th century. 

Many people accuse William Randolph Hearst, the wealthy newspaper publisher, and the DuPont family of purposefully attacking marijuana for the benefit of their industrial interests. 

Cannabis fields began to disappear as it began to be perceived as a menace to public health, and around the world, the use of cannabis for nonmedical purposes began to be outlawed. 

In 1936, the famous propaganda film Reefer Madness was released. By 1937, the U.S. Congress fully outlawed cannabis cultivation via the Marijuana Tax Act, which created a cultivation license that was nearly impossible to attain. 

Officials with the American Medical Association testified before Congress that the AMA was unaware of any proof to support the notion that cannabis was a dangerous drug. Still, four years later, in 1941, the cannabis plant was officially removed from the U.S. Pharmacopeia.

Throughout the 1950s and ’60s, the counterculture movement became notably associated with the use of marijuana. 

In 1970, the Controlled Substances Act (CSA) was passed by Congress as an effort to criminalize drug use and distribution, and by the 1980s, the War on Drugs was in full force under President Ronald Reagan. DEA eradication teams used planes and helicopters to patrol areas known to be centers of outdoor marijuana cultivation. In order to protect their crops, cultivators began to move indoors. 

Throughout the ’80s and ’90s, increasingly harsh penalties for the use and distribution of the drug were introduced, and the number of incarcerations related to cannabis skyrocketed, a trend that continues today. 

FBI crime statistics show that more than 11 million arrests for marijuana possession were made during the period between 1996 and 2012. 

The movement to re-legalize cannabis began in earnest with the passage of California’s Compassionate Use Act in 1996, making California the first state in the U.S. to legalize the use of cannabis. Doctors and patients were allowed to use marijuana for medial reasons; however, cultivation rules were not addressed.

This law immediately brought the state and federal laws into conflict. The federal government still prohibits the use of the drug for any purpose. 

Cultivation and retail systems for medical marijuana in California evolved without strict regulation. This allowed for the rise of a shadowy “gray market” that had many of the same qualities as the black market that it was intended to replace. 

Operators of cannabis businesses had to be willing to operate in an environment with considerable legal and financial risks. Most had years of experience producing cannabis illegally, and brought their practices with them from the black market. Their chief concern was discretion and security, not efficiency. 

Since 1996, 23 more states (including Arizona) have implemented medical marijuana programs, with four also legalizing recreational or adult use. 

In many states, applications for dispensary licenses are merit-based, meaning that prospective operators are required to show that they possess both the traditional business skill and cannabis knowledge to be successful. Arizona’s Department of Health Services does not consider these types of factors, instead allowing any person with a minimum amount of assets to enter into a lottery to win a license. 

Buds sit in Nature’s AZ Medicines’ drying racks.
Buds sit in Nature’s AZ Medicines’ drying racks.
Nate Nichols

The first medical marijuana dispensary in Arizona opened in late 2012, and since then, 99 dispensaries around the state have received licenses, making it nearly impossible for patients to satisfy the requirement that they live 25 miles away from the nearest dispensary in order to grow their own cannabis. 

Almost 5,000 pounds of marijuana and infused products were sold in April 2016 alone in an industry that employs thousands of people in businesses directly related to the production and sale of cannabis and related businesses, including laboratory testing, consulting, and the sale of marijuana-related paraphernalia.  

Dispensary licenses are awarded by lottery to those who submit complete applications to the Arizona Department of Health Services. Any completed application, including a $5,000 nonrefundable application fee, was eligible to be entered into a lottery, regardless of the experience or qualifications of the applicant.

And then there’s the matter of just how these dispensaries get a hold of pot to sell. 

Some dispensaries choose to stock their shelves with product from their own cultivation facilities, while the 20 dispensaries in Arizona that haven’t applied for cultivation rights have opted to purchase all their medicine from other dispensaries on the wholesale market. 

A dispensary can have one cultivation license for every operating permit that it obtains. In order to be approved to cultivate cannabis at a particular location, a dispensary operator is required to meet local zoning requirements as well as a set of standards that attempt to ensure that cultivation locations are secure, discreet, and sanitary. There is no mention in the regulations of efficiency of operation as it relates to environmental or economic concerns.

As the marijuana business spreads quickly across Arizona, some municipalities are enacting new zoning regulations to prevent retail and cultivation facilities. Tempe has imposed a ban on new dispensary use permits. Scottsdale and Phoenix have also imposed setback restrictions that are more stringent than those required by state law.

There are no requirements to test medical marijuana for potency or purity before it’s sold to patients. Many dispensaries undertake voluntary testing, but without clear standards in place, there is no way to guarantee that products are not contaminated with pesticides, fungicides, growth regulators, fungus, mold, or bacteria, problems that can plague many large grows.

One of the benefits of Arizona’s strict-but-general medical marijuana laws is that any cultivation method is allowable. Arizona growers have been slow to come around to greenhouses, but it’s beginning to happen.

And one of the most high-profile would-be growers is a group including Fife Symington IV, son of the former Arizona governor. With a background in produce businesses — including growing vegetables in greenhouses — Symington reportedly set out earlier this year to cultivate marijuana, as he told the Silver Creek Herald, a publication based in Holbrook. 

Symington could not be reached for comment. 

Symington’s father famously fought against medical marijuana during his tenure as Arizona’s governor. The fact that his son is now apparently looking at it as an appealing business opportunity is definitely a sign of the times — and the potential to make a lot of money. 

Some of Nature’s AZ Medicines’ cannabis live-resin concentrate.
Some of Nature’s AZ Medicines’ cannabis live-resin concentrate.
Nate Nichols

In the wild, cannabis is an annual plant with a life cycle that begins in the long, warm, spring days and ends in fall as temperatures get cooler and days get shorter. 

Grow it for commercial use, and you’ve got to imitate all that, using environmental controls such as temperature, artificial lighting, humidity control, nutrients, and carbon dioxide to influence plant growth and mimic the changes of the seasons.

Cannabis plants begin their lives as seeds or clones. Clones are genetically identical clippings taken from a large mother plant. Most commercial cultivators favor this method, as the genetically identical clones grow to the same heights and respond to the grow room environment in a similar manner, leading to a more consistent end product. 

Once the sprouted seeds or clones have strong root systems and have reached a minimum height, they are transplanted into the plastic containers that will be their home over the next several months. This stage is known as vegetative growth. Plant leaves, stems, and root systems continue to grow and expand in size as the plant grows taller and stockier. This growth makes it easier for the plants to transport and use water and nutrients to grow larger, more quickly, in the subsequent stages of growth. During this “spring” period, plants need 18 to 24 hours of sunlight a day. After a month or two in the vegetative state, it is time to move the plants into the flowering stage.

The most important factor in this transition is light. In order to trigger flowering, plants must be moved to a cycle of 12 hours of light and 12 hours of darkness. Once this change occurs, it signals to the cannabis plant that the end of the growing season, and therefore its life, is fast approaching. The plants begin to focus all their growth on making seeds to propagate the next generation of cannabis plants. On male plants, small nodes full of pollen begin to swell and eventually pop open, releasing pollen as far as the air will carry it. Because consumers only want marijuana flowers, the dried and unpollinated calyxes of the female plant, males are removed from flowering rooms and sometimes the whole cultivation facility. 

When left unpollinated, the calyxes of the female cannabis plant swell and become coated in sticky resin. In the wild, this resin is how pollen is captured to start the process of germinating new seeds. However, it is also rich in the active ingredients responsible for the medical benefits and “high” of marijuana. Delta 9 Tetrahydrocannabinol (THC), other cannabinoids, terpenes, flavonoids, and even steroids, are all found in this resin in varying concentrations. 

After plants spend six to 10 weeks in the flowering stage, it’s time to harvest. After being cut down, the largest leaves are removed, and plants are hung by their stalks for approximately a week. Once the flowers have reached the right moisture content, the individual flowers or “buds” are removed from the stalk and put into special containers to cure. During this stage, moisture levels are carefully monitored to ensure that plants don’t dry too quickly and lose their active ingredients. Generally speaking, the quality, fragrance, and potency will all benefit the longer and more slowly cannabis is cured. 

All parts of this life cycle are identical whether the plants are indoors or in a greenhouse. The only difference has to do with lighting. While indoor growers can move plants through a whole life cycle in one room by turning artificial lights on and off, greenhouse growers must work with the sun to achieve the same lighting cycle. Instead of small, compartmentalized rooms (as one might expect in an indoor facility), in a greenhouse, plants are grown in several large open rooms many thousands of square feet each. A combination of natural sunlight and artificial light is used to ensure plants get the necessary light period, even if the sun isn’t shining. 

Ironically, one of the toughest parts of getting a greenhouse to work isn’t ensuring there’s enough sunlight; it’s figuring out how to get enough darkness. One of the more recent innovations in greenhouse growing is the light deprivation curtain. 

A drip wall inside the greenhouse purifies, cools, and humidifies air as it is pulled in from outside.
A drip wall inside the greenhouse purifies, cools, and humidifies air as it is pulled in from outside.
Nate Nichols

Mark Steinmetz’s greenhouse facility in Southern Arizona butts up against a picturesque mountain range on the high desert plains. As you approach the buildings, the smell of wafting terpenes (naturally occurring molecules that help give cannabis its taste and smell) gives the clue of the presence of the thousands of marijuana plants. 

This is not your grandma’s greenhouse. 

“Most people think of these hoop houses, or old-time dirt floors,” Steinmetz says. “They’re not envisioning the structures we have with concrete floors and brick walls. This is more of a hybrid; it’s more like indoor growing using natural light. I think that’s probably why we’re getting better results than a lot of traditional greenhouses.”

Security is high — there’s fencing, cameras, and 24-hour monitoring by armed guards. The sprawling compound includes three sets of large brick buildings that wouldn’t look out of place on a military base. The only feature that makes these buildings distinguishable as greenhouses from the outside is the rooftop opaque polycarbonate plastic paneling. This specially designed plastic allows for sunlight to pass through while limiting the flow of UV rays.

At first, a remote facility deep in the desert may seem like a less-than-ideal location for one of Arizona’s largest medical marijuana cultivation facilities. But favorable local zoning rules, as well as high elevation, low humidity, and cooler temperatures (relatively speaking) actually make this location ideal. Between the two greenhouses currently operating here, there are more than 110,000 square feet, approximately the size of two football fields, all devoted to the cultivation, processing, and packaging of medical cannabis. If all goes right, Steinmetz will soon expand to 165,000 square feet. 

Plants are arranged in long, narrow trays that span the width of the structure; there’s just barely enough space for one person to walk down each row to water, feed, and inspect each plant. An array of metal wires simultaneously constrains plants — “training” them to grow in an ideal shape — while supporting the weight of the plump calyxes covered in trichromes, glands containing cannabis resin, which glitter as the sunlight washes over them. 

Along one side of the facility, there is a drip wall, similar in design to a giant swamp cooler. Large fans on the opposite wall pull air across the grow facility, drawing warmer outdoor air across the honeycomb like material being soaked in reverse-osmosis water. As the outdoor air travels through the drip wall, it is purified, cooled, and humidified, helping the conditions inside the greenhouse mimic cannabis’ natural habitat. This drip wall is just one of the many technological innovations that helps make greenhouse growing energy-efficient. 

Sunlight plays an integral role in the whole process from seed to finished product. “We know consumers of cannabis products are environmentally conscious and like organically grown products, so sunlight just made a lot of sense to us,” says Steinmetz, adding, “The product loves natural sunlight! It loves the full light spectrum of the sun.” 

Because natural sunlight offers a different spectrum of light frequencies than indoor lighting, employees at Nature’s AZ Medicines say they are finding strains that fare better in the greenhouse than they do indoors.

But it’s true that some strains are more at home indoors, and have been disappointing producers when grown under natural light. Nature’s AZ Medicines’ greenhouse manager Gerry Wilson points out that with each and every cycle, strains will react a little differently to life in the greenhouse. “As we lock down the strains that do well in our environment, they really take to it. You start seeing the higher THC values, you see the terpene concentrations going up.”

Steinmetz and his crew admit that growing indoors is still likely an easier cultivation method. But technology — in the form of automated environmental controls like the blackout cloths — is doing its part to close the gap. 

He adds that they are looking into methods that will allow them to better prepare for weather, “so that we can anticipate the climate change that takes place from the morning to the evening with regard to humidity differences. It changes hourly, and every month is different. You go from the dry summer months into the monsoon summer, then into the fall, and later the cold winter nights. Each season is just incredibly different.”

One could say the same about the political seasons, in particular the current one. If it brings more acceptance of cannabis, that could affect attitudes toward growing. 

“Nationally, as marijuana becomes mainstream, people will realize it’s just a plant,” says Ryan Hurley, a partner of the Rose Law Group in Scottsdale, who represents a number of Arizona cannabis-related businesses. “As that stigma drops off, other considerations such as environmental impact and carbon footprint will become more important.”

E-mail nate.nichols@newtimes.com.

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