CBD OIL

When Mike Howard, director of cultivation at The Grove, first caught word of the record-breaking cannabis yields being harvested regularly by fellow grow teams around the country (Lume Cannabis in Michigan and Green Life Productions in Nevada) he knew the game was changing. Once Howard dug deeper into the news, he discovered a common catalyst behind the success of his peers: Both facilities were actively growing under the A3i LED grow light from Fohse. 

After hearing firsthand from the grow teams in Michigan and Nevada how they had increased yields over HPS by 31% and 100% respectively, Howard knew he had to get Fohse lighting into The Grove—and fast!

The Grove, a vertically integrated cannabis business with dispensary, cultivation, distribution and production licenses, has been producing, sourcing and selling high quality edibles, cartridges and recreational cannabis products since 2015. Their 26,600-square-foot growing and production facility is state-of-the-art and eco-friendly. They strive to recreate the conditions that cannabis would find in nature and use only all-natural growing media and inputs as well as biological measures to control any pests or diseases. It only makes sense then that they would seek out and select Fohse products—the best lighting fixtures in the business—to match The Grove’s exacting standards.

The dry Las Vegas air makes for a challenging indoor growing environment for cannabis. Fohse fixtures operate at much cooler temperatures than standard HPS fixtures.

At The Grove, this means that the humidifiers and cooling systems don’t have to work as hard, and that an equilibrium between temperature and humidity level can be more easily achieved and maintained. This has led to some of the record harvests being seen regularly at The Grove.

Looking at how Fohse’s A3i 1500-watt fixtures compare to standard 1000-watt DE HPS fixtures in an “apples to apples” comparison reveals just how in sync these intelligent fixtures are with cannabis. The numbers from a recent, late fall harvest tell an impressive tale:

*Strawberry Cheesecake was the highest-yielding strain at 7.2 lbs/light, while Cookies was the lowest at 5.49 lbs/light

In the now-typical example above from the fall of 2020, the A3i system generated an average of 27% more light as compared to the HPS fixtures. This additional light led to an increase in dry yield harvest weights by a whopping 65%. All of this, while using 16% less energy than the HPS lighting it was compared to and in the same physical footprint of space with the same number of plants.

Remarkable results like those at The Grove are not a fluke or an accident and they are not restricted to Howard and his team alone. Growers all over are finding results like these to be the new norm, regardless of growing media and style of growing.

Lume Cannabis has been tracking results of their Fohse A3i fixtures for over 40 hydroponic growing cycles and across eight different strains of cannabis. Without fail, the team at Lume under Kevin Kuethe’s direction reports higher yields under the A3i than those grown under HPS. For example, with Fohse fixtures they have harvested 7,130 lbs. versus 5,241 lbs. with the same strains grown under HPS. THC levels under Fohse lights have been 3% higher too; 20% versus 17% on average. In other words, the cannabis that Lume grew under Fohse lighting netted more than $2.5 million more than the cannabis grown under HPS.

@Keene.Media

Steve Cantwell at Green Life Productions also reports unbelievable differences since switching over to Fohse’s A3i and F1V fixtures. Green Life Production’s typical harvests under their previous lighting system clocked in at 80-90 lbs. The average harvest now using Fohse fixtures is 160 to nearly 200 lbs. pulled from their 4×8, no-till, living organic soil beds.

Like Howard’s team at The Grove, Cantwell and his team have the enviable logistics problem of figuring out where to put all of the bounty from these sky-high yields. All three teams, The Grove (coco pots), Lume Cannabis (hydroponics) and Green Life Productions (live soil), are blowing harvest records out of the water time and time again across three drastically different cultivation styles. These highly regarded and experienced cannabis producers are showing that the rules have changed and that Fohse lighting fixtures enable previously unobtainable and unthinkable results.

Howard and the grow team at The Grove have achieved their amazing results by relying on the horticultural skills of their talented team, and also by utilizing two of Fohse’s premier products. They have predominantly been using the A3i model, Fohse’s workhorse grow light, to achieve their highest yields. The A3i is specifically designed to grow cannabis and that is exactly what it does. Its spectral distribution is custom-made to address the unique needs of cannabis. As evidenced in the remarkable yields outlined in the table above, the A3i’s output (of up to 4,970 µmol/s depending on configuration) can be adjusted to supply seasonably appropriate lighting depending on the growth phase of the crop. All of this while producing up to 156% more light per fixture and burning cooler (no hotter than dishwashing water) than traditional HPS grow lights. This means the A3i is safer to operate for both growers and their cannabis crops.

The A3i system is designed to handle the harsh extremes of a growing environment. The IP67-rated fixture will continue to operate at peak performance even with the moisture, dust, pests and biological debris, such as spores that are present in most indoor growing environments. Not many growers would expect their grow lights to still perform well after being submerged under several feet of water; the A3i can survive such a plunge and be relied on to deliver its photon payload as designed. Howard and his team at The Grove do not just rely on the A3i for their high yields. In their double-stack rooms they deploy Fohse’s lighter, more nimble F1V for its pound-for-pound power.

Just like the A3i, the F1V fixtures rely on industry-proven Samsung LEDs for their photon delivery. While almost the same dimensions as the A3i, at 38 lbs. (17.2 kg) per fixture they are almost half the weight of each A3i (70 lbs./31.75kg each). Like the A3i fixtures, their power supply rating is +100,000 hours. Depending on the needs of the grower and the ability of the existing systems, Fohse offers 420W, 600W, and 800W versions of the F1V. In his own F1V rooms, Howard has reported similarly positive results as in his A3i rooms: 60%+ yield increases, increased utility efficiencies, and better labor efficiency. The team now does not have to “chase canopy” by raising and lowering the lighting fixtures to achieve late-flower PPFD intensities like they did with the old LED lights that they were using in those double-tiered systems.

Fohse lighting products outperform their competition not only at The Grove, but anywhere they have been put to the test. So why hasn’t every cannabis grower switched over to Fohse?

Growers who have not yet seen the results firsthand still believe that LEDs cannot keep up with the high lighting demands of cannabis the way that HPS lighting traditionally has. The narrative had long been one of incremental change and an acceptance that two pounds of harvested yields per light fixture was the best one could expect. At the turn of the century, there was chatter that this didn’t have to be “good enough.”

@Keene.Media

By 2015, growers both professional and amateur alike had proven that three pounds per light was achievable based on advancements up to that point, but no one thought it would ever get better than that. Until Fohse set out to prove them all wrong, and then did. They showed that higher light output does not have to mean higher heat and that Diode technology had come a long way in just a few short years. Howard gives his take on this phenomenon:

“Everyone looks at LED lighting as still kind of a novelty; not something where it needs to be yet for cannabis growers. Having seen the evolution of LEDs that the Fohse team has created because of their cannabis mindset, it became obvious that we could focus on producing healthy plants.

A lot of other grow lighting companies are still looking at making and selling lights that can grow anything. Cannabis takes a lot of light and many companies and even growers don’t put enough light into commercial setups. Many cannabis growers never thought that LED technology was ever going to make it, but the power that comes out of Fohse fixtures is insane. Fohse lighting lets the grower focus on plant health and our yields show that. With Fohse LEDs overtaking HPS, you can really push the limits of your grow.”

As Howard said, Fohse fixtures are engineered with a “cannabis mindset.” HPS light output has plateaued because the added heat load is both detrimental to the cannabis crop and uneconomical to counterbalance. With Fohse fixtures growers can focus more on the nuances of a high-intensity light environment instead of combatting heat. Ever since that first time Mike Howard oversaw production in the initial grow room where Fohse products were installed at the Grove, he immediately saw the results. He is now vowing to keep replacing The Grove’s less efficient HPS fixtures and outdated LEDs with Fohse lighting as they continue expanding. Find out how switching to Fohse fixtures will increase your cannabis production and about all of Fohse’s record-busting lighting at Fohse.com.

Multi-state operators (MSOs) are on the rise in the United States, navigating complex regulatory frameworks to drive profitability through economies of scale and scope. C21 Investments is a vertically integrated cannabis company with operations in Nevada and Oregon; traded on the Canadian Stock Exchange (CXXI) and on the OTCQX (CXXIF). The company recently secured a commitment from Wasatch Global Investors, JW Asset Management (Jason Wild/TerrAscend) and CB1 Capital Management (Todd Harrison) who, in addition to C21’s CEO, provided an equity commitment for repayment of all convertible debt.

We spoke with Bruce Macdonald, Chairman of C21 Investments. Bruce joined C21 in 2018 after reviewing the company as a personal investment and getting to know the senior management team. Prior to C21, Bruce had a long and successful career in finance and capital markets at one of Canada’s largest banks.

Aaron Green: Can you give a brief overview of C21?

Bruce MacDonald: C21 is a cannabis company that has operations in both Nevada, and in Oregon. Oregon is fundamentally a wholesale business, and we recently announced a divestment of some non-core assets in the state. Our cash cow and where we currently see our best opportunity for future growth is our Nevada operations. We run a seed-to-sale business in the state with two dispensaries doing about $35M a year in revenue, with a 40% EBITDA Margin, and servicing 600,000 customers.

Aaron: Can you tell me about a little bit about your background and how you got involved in a cannabis company?

Bruce: I spent 37 years working for RBC in the capital markets business. I started as a floor trader, back when there was such a thing as a floor, and over the years held a number of positions, ultimately working my way up to Chief Operating Officer of the bank’s global capital markets division. Throughout my time, I built a lot of businesses, which was why C21 and this opportunity was so interesting to me.

My involvement in the cannabis sector was a bit of an accident, but it’s turned into a passion. It actually found me. I was an investor in the C21 IPO. I sat down with management to understand the investment and given my experience, they asked if I would consider becoming a member the Board. Since joining the Board, my involvement has been primarily focused on strategy and the financing side of the business. While I certainly didn’t anticipate it, it’s turned into a 24/7 gig and a challenge I am thoroughly enjoying.

Aaron: Can you tell me about the history of C21 becoming a MSO? Did you start in one state?

Bruce: While this history predates my time at the company, my understanding is that as a Canadian company, we had first mover advantage to be able to access public funding and get established in the US cannabis space. As part of that, the team at that time reviewed approximately 100 different properties. Because we were based out of Vancouver, the focus was primarily the Western states like Washington, Oregon, Nevada and California. Arizona wasn’t in the game yet. The first transaction C21 did was in Oregon, with a company called Eco Firma. In all, there were four acquisitions in Oregon, and one in Nevada. In fact, it was the investment in Silver State (Nevada) that was by far the most meaningful. As far as our Oregon assets are concerned, we have worked hard to integrate and streamline them into an efficient operation.

So, when I joined the Board, we were just completing the paperwork on the acquisitions, and finalizing our strategy and business plan to go forward.

Aaron: Today there are a number of MSOs. How does this more crowded market impact your value proposition; how do you think about gaining and maintaining strategic advantage?

Bruce: It’s important first to start with strategy. From a strategic perspective, we had the advantage of being the first operator in Nevada with Silver State. Sonny Newman, our CEO, started the business back in 2013. We run a seed-to-sale business so we have a deep knowledge of all aspects of the operation and really know the Nevada market. In fact, 70% on a dollar volume basis of the 700 SKUs that we sell are products that we manufacture. It’s a critical piece of our strategic advantage.  

What I would say is our most important strategic advantage is the fact that C21 is a stable, self-sustaining operator. What I mean by that is we’re one of the few businesses that actually makes money. This is what really allows us to be strategic and disciplined in our approach to growth. For example, it’s been more than 18 months since we did our last capital raise and that’s by choice. Every decision we make is through the shareholder lens and focusing on delivering value to customers and shareholders.

Looking at our value proposition, simply put, it comes down to four things – the right products, at the right price, in the right location, with the right environment. Some people might call this motherhood, but there’s a lot of work that goes behind each of them. 

Great quality products, that’s table stakes. You have to be a top-notch grower and generate quality products that people demand if you want to build a loyal customer base. Right price – to some it sounds like just putting the right sticker on the package – it’s not. It’s all about making sure you are efficient in your operations because to be profitable, you have to be a low-cost producer to deliver on a lower price promise. Tons of work has gone into our operation around being a “right price” business. 

Right location is another important element of our value proposition. We wanted to build a loyal customer base which for us meant focusing more on locals than on tourists. This is why Sonny positioned the dispensaries on commuter paths.

The last key factor is having the right environment to sell our products. In Nevada, the company ended up building fit-for-purpose dispensaries rather than fitting ourselves in a strip mall. We cater to over 600,000 clients a year. Now we’re doing 10,000 curbside pickups a month. With that type of volume, logistically speaking you need ample parking, a well-lit exterior so people feel safe, and of course, great curb appeal. These factors are essential in maintaining a loyal customer base.

Aaron: Tell me more about Silver State Relief and why it has been so successful?

Bruce: I think what you’re really asking for is: what is Sonny’s secret sauce? There are a few ingredients that go into it. As I highlighted, it was a purposeful decision to build a business with a loyal customer base focused primarily on locals. That needs product, price, and convenience. Sonny lives in the Reno area, which is one of the main reasons Silver State is located up North.  

Critical to success has been the culture of the organization. Let’s start with the company being nimble and I’ll give you an example. The early days of the pandemic included the complete shutdown of dispensaries. We went from serving over 1500 customers a day in our stores to the next day being told that we could offer delivery only. Within a week, we were able to pivot and had lockboxes, regulatory approvals and a delivery capability. When you look at our Nevada operation, we ended up with just a 10% dip in our revenues for the quarter, even though we had to live through six weeks of delivery-only and then a phase of curbside-only.

Another key element of the culture is our laser focus on cost management. We’ve talked a little about cost management, but it’s absolutely critical, especially in the context of the high cost of capital that we see in this sector. Add to that the punitive tax impact of 280e where federal tax is applied to gross margins which means SG&A and interest are non-deductible expenses for tax purposes. So, to enhance our profitability, we are intent on having the lowest SG&A of the public cannabis companies. We’re also among the lowest in interest expense. That whole drive for efficiency has given us a formula and a mantra that has allowed us to have a stable business with significant cash flow. We get to make strategic decisions — not hasty or desperate ones — and focus on what’s good for the shareholder.

Aaron: How was C21 capitalized?

Bruce: We did a $33M raise on the RTO of a listed shell company. That was how C21 was established, and then signed contracts with the Oregon and Nevada properties.

Aaron: I recently saw a press release about expanding the Nevada cultivation. Can you give me some more details? 

Bruce: We announced that we are tripling our capacity within our existing 100,000 square foot warehouse facilities. We’re going to build out another 40,000 square feet, and we currently use 20,000. That’s the tripling. Expanding our cultivation was clearly the next logical step in our growth story. This should yield us an additional 7,500 pounds of high-quality flower. We can do this very cost effectively with about $6M in capex, and we anticipate funding the project internally. We will still leave another 40,000 square feet of expansion capacity as market needs justify.

This announcement was significant, but I don’t think it was fully understood by the market. Just to play with some numbers, 7,500 pounds of flower has a wholesale market value today of about $17M. It will cost us approximately $2M in incremental operating expense to add these additional grow rooms. We already pay the rent, so we just need to pay for the people, power, fertilizer and product testing. When you do the simple math, we see this as a big win for shareholders and extremely accretive on an after-tax basis. 

Historically, we always used to grow more than we needed, but with the increase in demand that’s going on in the market, we now run at a flower deficit. In the near term, this build-out will allow is to meet our current retail needs, with the balance that we will sell on the wholesale market. Ultimately, this positions us well on a seed-to-sale basis to support our plans to extend our retail footprint in Nevada. 

Aaron: It sounds like the decision was made based on both revenue growth and supply chain consolidation?

Bruce: Yes, and just the pure profitability of it! You can’t get a bigger, better bang for your buck from spending $6M to generate $17M with ongoing operating costs of $2M.

Aaron: The next question here is about the recent note restructuring and, and how the debentures was restructured. How’d that come about and what is the advantage now of having gone through that process? 

Bruce: This all fits into our medium-term growth strategy. For C21, the first thing we focused on was getting our house in order to ensure that we were efficient and profitable. We knew we needed to have a scalable machine to grow. The second step, which the debt restructuring relates to, was around fortifying our balance sheet. To support our growth plans, we needed to have a solid foundation.

Our balance sheet had two things that needed fixing. One was that we had an $18M obligation coming due to our CEO. The effect of the restructuring extended this obligation over the next 30 months at favorable terms. Additionally, $6.5M of convertible debentures were reaching maturity in January of 2021. And while the debentures were in the money and theoretically would convert to shares, we didn’t want to take the risk that our stock price could drift a bit and all of a sudden there could be significant cash required for redemptions. We’ve seen a lot of companies suffer significant unwanted dilution when their debentures get out of control. So, we approached Wasatch, Jason Wild’s JWAM and CB1 Capital, three seasoned investors, who provided a backstop whereby they would purchase any shares not taken up by people though the conversion of their debentures, so that we would be able to pay any debenture holders back cash with the money we would receive as the investors took shares. In exchange for providing this backstop, C21 gave them an upside participation in the form of warrants. I think it was absolutely critical to get this in place. And it’s phenomenal to have these three names in our corner. We couldn’t imagine better partners.

Aaron: So, what’s next for C21? 

Bruce: I hope you are getting the feeling that here at C21 our objective is to play the long game. That means we make measured decisions with the interest of shareholders top of mind. We’ve worked hard in 2020 to get our house in order, fortify our balance sheet, and generate significant cash flow. I think we’re clocking in at around $12M in trailing annual cash flow, which interestingly, is about the same number that Planet 13 is doing. That’s obviously a fantastic result for a company with $150M of market cap.

“We are working with urgency to break the back of these sector economics.”When we think about our medium-term growth strategy, we will continue to make our decisions through a cash flow and earnings lens rather than hype and flash. While we will remain opportunistic with respect to strategic alternatives, the core of our expansion is going to focus on where we already have a proven track record: Nevada. We’re big believers that to achieve long term success, you have to own your home market. And what I mean by that is today we’re about 5% of the Nevada market. Owning your home market looks more like a 15% share. That is our focus. I think we’ve shown that our disciplined approach delivers results – results such as having top five metrics in Net Income, Cash Flow and EBITDA Margin, across the range of public companies that we can see.

I think it’s key we’re getting noticed. We talked about the strategic investors, but we’re also one of the 17 plant-touching companies that’s in the MSOS ETF. So, we’re going to follow our clear growth trajectory, focused on the bottom line and delivering for shareholders. If you look under the hood right now, you see a 10% cash flowing company, which is a pretty rare bird in our industry. We’re excited about where we are.

One thing I haven’t touched on in great detail is our plans for expanding our retail footprint. How do you grow in the dispensary space? Aaron, I think what’s key here is looking at the expected return relative to the cost of capital. For example, if you targeted buying a dispensary with $20M in revenues, and are able as we are, to generate 25% in after-tax cash based on those revenues, then once optimized, it would generate $5M in earnings. An asset like this is going to trade at roughly one and a half times revenues. So, you’re going to have to pay $30M. For the people that have been going out and borrowing money at 15%, their annual cost would be $4.5M. We’re not going to give four and a half to the moneylenders, it just doesn’t make sense for shareholders. We are working with urgency to break the back of these sector economics. It is something we believe will be afforded to companies with stable earnings and profitability such as ours. Of course, no deal’s a deal until it’s on the tape, but we are very hopeful that we have cracked the code ahead of SAFE Banking to get capital costs down. This is just a little bit of an inside look into our thought processes.   

Aaron: Okay, awesome. All right. That concludes the interview.

When Mike Howard, director of cultivation at The Grove, first caught word of the record-breaking cannabis yields being harvested regularly by fellow grow teams around the country (Lume Cannabis in Michigan and Green Life Productions in Nevada) he knew the game was changing. Once Howard dug deeper into the news, he discovered a common catalyst behind the success of his peers: Both facilities were actively growing under the A3i LED grow light from Fohse. 

After hearing firsthand from the grow teams in Michigan and Nevada how they had increased yields over HPS by 31% and 100% respectively, Howard knew he had to get Fohse lighting into The Grove—and fast!

The Grove, a vertically integrated cannabis business with dispensary, cultivation, distribution and production licenses, has been producing, sourcing and selling high quality edibles, cartridges and recreational cannabis products since 2015. Their 26,600-square-foot growing and production facility is state-of-the-art and eco-friendly. They strive to recreate the conditions that cannabis would find in nature and use only all-natural growing media and inputs as well as biological measures to control any pests or diseases. It only makes sense then that they would seek out and select Fohse products—the best lighting fixtures in the business—to match The Grove’s exacting standards.

The dry Las Vegas air makes for a challenging indoor growing environment for cannabis. Fohse fixtures operate at much cooler temperatures than standard HPS fixtures.

At The Grove, this means that the humidifiers and cooling systems don’t have to work as hard, and that an equilibrium between temperature and humidity level can be more easily achieved and maintained. This has led to some of the record harvests being seen regularly at The Grove.

Looking at how Fohse’s A3i 1500-watt fixtures compare to standard 1000-watt DE HPS fixtures in an “apples to apples” comparison reveals just how in sync these intelligent fixtures are with cannabis. The numbers from a recent, late fall harvest tell an impressive tale:

*Strawberry Cheesecake was the highest-yielding strain at 7.2 lbs/light, while Cookies was the lowest at 5.49 lbs/light

In the now-typical example above from the fall of 2020, the A3i system generated an average of 27% more light as compared to the HPS fixtures. This additional light led to an increase in dry yield harvest weights by a whopping 65%. All of this, while using 16% less energy than the HPS lighting it was compared to and in the same physical footprint of space with the same number of plants.

Remarkable results like those at The Grove are not a fluke or an accident and they are not restricted to Howard and his team alone. Growers all over are finding results like these to be the new norm, regardless of growing media and style of growing.

Lume Cannabis has been tracking results of their Fohse A3i fixtures for over 40 hydroponic growing cycles and across eight different strains of cannabis. Without fail, the team at Lume under Kevin Kuethe’s direction reports higher yields under the A3i than those grown under HPS. For example, with Fohse fixtures they have harvested 7,130 lbs. versus 5,241 lbs. with the same strains grown under HPS. THC levels under Fohse lights have been 3% higher too; 20% versus 17% on average. In other words, the cannabis that Lume grew under Fohse lighting netted more than $2.5 million more than the cannabis grown under HPS.

@Keene.Media

Steve Cantwell at Green Life Productions also reports unbelievable differences since switching over to Fohse’s A3i and F1V fixtures. Green Life Production’s typical harvests under their previous lighting system clocked in at 80-90 lbs. The average harvest now using Fohse fixtures is 160 to nearly 200 lbs. pulled from their 4×8, no-till, living organic soil beds.

Like Howard’s team at The Grove, Cantwell and his team have the enviable logistics problem of figuring out where to put all of the bounty from these sky-high yields. All three teams, The Grove (coco pots), Lume Cannabis (hydroponics) and Green Life Productions (live soil), are blowing harvest records out of the water time and time again across three drastically different cultivation styles. These highly regarded and experienced cannabis producers are showing that the rules have changed and that Fohse lighting fixtures enable previously unobtainable and unthinkable results.

Howard and the grow team at The Grove have achieved their amazing results by relying on the horticultural skills of their talented team, and also by utilizing two of Fohse’s premier products. They have predominantly been using the A3i model, Fohse’s workhorse grow light, to achieve their highest yields. The A3i is specifically designed to grow cannabis and that is exactly what it does. Its spectral distribution is custom-made to address the unique needs of cannabis. As evidenced in the remarkable yields outlined in the table above, the A3i’s output (of up to 4,970 µmol/s depending on configuration) can be adjusted to supply seasonably appropriate lighting depending on the growth phase of the crop. All of this while producing up to 156% more light per fixture and burning cooler (no hotter than dishwashing water) than traditional HPS grow lights. This means the A3i is safer to operate for both growers and their cannabis crops.

The A3i system is designed to handle the harsh extremes of a growing environment. The IP67-rated fixture will continue to operate at peak performance even with the moisture, dust, pests and biological debris, such as spores that are present in most indoor growing environments. Not many growers would expect their grow lights to still perform well after being submerged under several feet of water; the A3i can survive such a plunge and be relied on to deliver its photon payload as designed. Howard and his team at The Grove do not just rely on the A3i for their high yields. In their double-stack rooms they deploy Fohse’s lighter, more nimble F1V for its pound-for-pound power.

Just like the A3i, the F1V fixtures rely on industry-proven Samsung LEDs for their photon delivery. While almost the same dimensions as the A3i, at 38 lbs. (17.2 kg) per fixture they are almost half the weight of each A3i (70 lbs./31.75kg each). Like the A3i fixtures, their power supply rating is +100,000 hours. Depending on the needs of the grower and the ability of the existing systems, Fohse offers 420W, 600W, and 800W versions of the F1V. In his own F1V rooms, Howard has reported similarly positive results as in his A3i rooms: 60%+ yield increases, increased utility efficiencies, and better labor efficiency. The team now does not have to “chase canopy” by raising and lowering the lighting fixtures to achieve late-flower PPFD intensities like they did with the old LED lights that they were using in those double-tiered systems.

Fohse lighting products outperform their competition not only at The Grove, but anywhere they have been put to the test. So why hasn’t every cannabis grower switched over to Fohse?

Growers who have not yet seen the results firsthand still believe that LEDs cannot keep up with the high lighting demands of cannabis the way that HPS lighting traditionally has. The narrative had long been one of incremental change and an acceptance that two pounds of harvested yields per light fixture was the best one could expect. At the turn of the century, there was chatter that this didn’t have to be “good enough.”

@Keene.Media

By 2015, growers both professional and amateur alike had proven that three pounds per light was achievable based on advancements up to that point, but no one thought it would ever get better than that. Until Fohse set out to prove them all wrong, and then did. They showed that higher light output does not have to mean higher heat and that Diode technology had come a long way in just a few short years. Howard gives his take on this phenomenon:

“Everyone looks at LED lighting as still kind of a novelty; not something where it needs to be yet for cannabis growers. Having seen the evolution of LEDs that the Fohse team has created because of their cannabis mindset, it became obvious that we could focus on producing healthy plants.

A lot of other grow lighting companies are still looking at making and selling lights that can grow anything. Cannabis takes a lot of light and many companies and even growers don’t put enough light into commercial setups. Many cannabis growers never thought that LED technology was ever going to make it, but the power that comes out of Fohse fixtures is insane. Fohse lighting lets the grower focus on plant health and our yields show that. With Fohse LEDs overtaking HPS, you can really push the limits of your grow.”

As Howard said, Fohse fixtures are engineered with a “cannabis mindset.” HPS light output has plateaued because the added heat load is both detrimental to the cannabis crop and uneconomical to counterbalance. With Fohse fixtures growers can focus more on the nuances of a high-intensity light environment instead of combatting heat. Ever since that first time Mike Howard oversaw production in the initial grow room where Fohse products were installed at the Grove, he immediately saw the results. He is now vowing to keep replacing The Grove’s less efficient HPS fixtures and outdated LEDs with Fohse lighting as they continue expanding. Find out how switching to Fohse fixtures will increase your cannabis production and about all of Fohse’s record-busting lighting at Fohse.com.

After a slow start following a disappointing 2019, M&A in the cannabis space closed 2020 with a bang, with more than $600 million in deals announced immediately following the November elections. Prospects for the New Year are expected to continue the explosive year-end trend with a backlog of nearly $2 billion in deals heading into 2021. The COVID-19 pandemic boosted sales of cannabis products, and election results opening up five new states to legal cannabis use and possible federal regulatory reform are further boosting prospects. Analysts now predict the U.S. cannabis market is poised to double by 2025.

Growth is expected to be led by multi-state operators who have achieved scale, cleaned up their balance sheets and stockpiled dry powder for roll-up acquisitions. Cannabis companies raised nearly $134 million in the two weeks before Election Day, a 185% increase over the same period last year. Most of the money flowed to multistate operators. In addition, the biggest stocks by market capitalization saw a roughly 20% bump ahead of the election and now are trading at record volumes, providing plenty of stock currency for further acquisitions.

Among the headline acquisitions last year:

• Curaleaf continued its multi-state expansion with two of its largest acquisitions – the all-stock purchases of its affiliated cannabis oil company Select and of Grassroot, another MSO player. Curaleaf is now the largest cannabis company in the world based on annualized revenues, with annualized sales of $1 billion and operations in 23 states and 96 open dispensaries. Curaleaf also raised $215 million privately last year end for further expansion.
• Close behind, Aphria and Tilray announced in December that they will merge, creating what they say will be the largest cannabis company in the world with an equity value of roughly $3.8 billion. The combined entity will have facilities and offices in the U.S., Canada, Portugal and Germany. The deal is expected to close during the second quarter of this year.
• Also in December, Illinois-based Verano Holdings LLC unveiled plans to go public at a $2.8 billion valuation through a reverse takeover of a Canadian shell company. That deal followed the announcement that Verano will merge with Florida-based AltMed.
• In addition, publicly traded New York cannabis firm Columbia Care signed a definitive agreement last month to acquire Green Leaf Medical, a privately held Maryland-based cannabis manufacturer and retailer, for $45 million in cash and $195 million in stock. The acquisition is expected to close this summer. Including Green Leaf’s inventory, the Columbia Care will operate 107 facilities, including 80 dispensaries and 27 cultivation and manufacturing facilities. Columbia Care also took advantage of cannabis fever last year by raising $100 million privately.
• Also in December, Ayr Strategies announced it would acquire Liberty Health Sciences, one of the largest cannabis companies in Florida, for $290 million in stock, as well Garden State Dispensary, a New Jersey marijuana company for $41 million in cash, $30 million in stock and $30 million in the form of a note. This follows Ayr’s $81 million acquisition of an Arizona medical marijuana operator in November. Voters approved marijuana use in Arizona and New Jersey in November.  Ayr has completed a string of acquisitions in Nevada, Massachusetts, Pennsylvania, Arizona, Ohio and, upon the closing of December’s deals, New Jersey and Florida.

Not all cannabis companies will rely on acquisitions, however. Trulieve, as an example, has focused its efforts on Florida and organic growth. It remains to be seen whether a multi-state approach fueled by acquisitions or a single-state organic growth model will prove the more lasting. Growth and profitability in the short term likely will continue to be hampered by limits on economies of scale due to federal restrictions and differing state laws.

In light of the maturing industry and the 2019 bust, the valuation model for acquisitions in the cannabis space is evolving from one based on sales, typically associated with emerging growth industries, to a more mature industry model based on profits or Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA). Most cannabis MSOs have stabilized and generate positive EBITDA, which justifies the evolution away from a sales-driven model.

From a legal standpoint, the same limitations that have vexed the cannabis industry for years will continue to challenge deal makers until there is greater clarity on the federal front. Institutional investor reluctance, financial industry constraints, haphazard state regulation and the unavailability of federal forums such as national copyright and trademark registration will continue to be issues for acquirers and their lawyers in the space.

Acquisition agreements will continue to have to address the federal Damocles’ sword should expected relaxation of federal enforcement under the Biden administration and further legislative relief does not materialize as expected. Although the U.S. House in December passed the “Marijuana Opportunity Reinvestment and Expungement Act” (MORE) to remove cannabis from the Controlled Substances Act, the Senate did not take up the bill in 2020 and it will have to be re-introduced in 2021. Notably, the MORE Act does not affect existing federal regulation of cannabis, such as the Food, Drug and Cosmetics Act, under which the FDA has limited the use of CBD in certain products despite hemp being removed from the Controlled Substances Act in 2018.

The cannabis M&A market is moving into a more mature phase, as MSOs will be choosier in their approach rather than continuing the land-grab mentality of years past. Due to improved financial strength, 2021 should see these MSOs continuing to expand their footprints either within existing states or new ones. Although uncertainties abound, further consolidation and expansion through add-on acquisitions is likely to continue apace in 2021, providing plenty of opportunities for deal makers and their lawyers.

When Mike Howard, director of cultivation at The Grove, first caught word of the record-breaking cannabis yields being harvested regularly by fellow grow teams around the country (Lume Cannabis in Michigan and Green Life Productions in Nevada) he knew the game was changing. Once Howard dug deeper into the news, he discovered a common catalyst behind the success of his peers: Both facilities were actively growing under the A3i LED grow light from Fohse. 

After hearing firsthand from the grow teams in Michigan and Nevada how they had increased yields over HPS by 31% and 100% respectively, Howard knew he had to get Fohse lighting into The Grove—and fast!

The Grove, a vertically integrated cannabis business with dispensary, cultivation, distribution and production licenses, has been producing, sourcing and selling high quality edibles, cartridges and recreational cannabis products since 2015. Their 26,600-square-foot growing and production facility is state-of-the-art and eco-friendly. They strive to recreate the conditions that cannabis would find in nature and use only all-natural growing media and inputs as well as biological measures to control any pests or diseases. It only makes sense then that they would seek out and select Fohse products—the best lighting fixtures in the business—to match The Grove’s exacting standards.

The dry Las Vegas air makes for a challenging indoor growing environment for cannabis. Fohse fixtures operate at much cooler temperatures than standard HPS fixtures.

At The Grove, this means that the humidifiers and cooling systems don’t have to work as hard, and that an equilibrium between temperature and humidity level can be more easily achieved and maintained. This has led to some of the record harvests being seen regularly at The Grove.

Looking at how Fohse’s A3i 1500-watt fixtures compare to standard 1000-watt DE HPS fixtures in an “apples to apples” comparison reveals just how in sync these intelligent fixtures are with cannabis. The numbers from a recent, late fall harvest tell an impressive tale:

*Strawberry Cheesecake was the highest-yielding strain at 7.2 lbs/light, while Cookies was the lowest at 5.49 lbs/light

In the now-typical example above from the fall of 2020, the A3i system generated an average of 27% more light as compared to the HPS fixtures. This additional light led to an increase in dry yield harvest weights by a whopping 65%. All of this, while using 16% less energy than the HPS lighting it was compared to and in the same physical footprint of space with the same number of plants.

Remarkable results like those at The Grove are not a fluke or an accident and they are not restricted to Howard and his team alone. Growers all over are finding results like these to be the new norm, regardless of growing media and style of growing.

Lume Cannabis has been tracking results of their Fohse A3i fixtures for over 40 hydroponic growing cycles and across eight different strains of cannabis. Without fail, the team at Lume under Kevin Kuethe’s direction reports higher yields under the A3i than those grown under HPS. For example, with Fohse fixtures they have harvested 7,130 lbs. versus 5,241 lbs. with the same strains grown under HPS. THC levels under Fohse lights have been 3% higher too; 20% versus 17% on average. In other words, the cannabis that Lume grew under Fohse lighting netted more than $2.5 million more than the cannabis grown under HPS.

@Keene.Media

Steve Cantwell at Green Life Productions also reports unbelievable differences since switching over to Fohse’s A3i and F1V fixtures. Green Life Production’s typical harvests under their previous lighting system clocked in at 80-90 lbs. The average harvest now using Fohse fixtures is 160 to nearly 200 lbs. pulled from their 4×8, no-till, living organic soil beds.

Like Howard’s team at The Grove, Cantwell and his team have the enviable logistics problem of figuring out where to put all of the bounty from these sky-high yields. All three teams, The Grove (coco pots), Lume Cannabis (hydroponics) and Green Life Productions (live soil), are blowing harvest records out of the water time and time again across three drastically different cultivation styles. These highly regarded and experienced cannabis producers are showing that the rules have changed and that Fohse lighting fixtures enable previously unobtainable and unthinkable results.

Howard and the grow team at The Grove have achieved their amazing results by relying on the horticultural skills of their talented team, and also by utilizing two of Fohse’s premier products. They have predominantly been using the A3i model, Fohse’s workhorse grow light, to achieve their highest yields. The A3i is specifically designed to grow cannabis and that is exactly what it does. Its spectral distribution is custom-made to address the unique needs of cannabis. As evidenced in the remarkable yields outlined in the table above, the A3i’s output (of up to 4,970 µmol/s depending on configuration) can be adjusted to supply seasonably appropriate lighting depending on the growth phase of the crop. All of this while producing up to 156% more light per fixture and burning cooler (no hotter than dishwashing water) than traditional HPS grow lights. This means the A3i is safer to operate for both growers and their cannabis crops.

The A3i system is designed to handle the harsh extremes of a growing environment. The IP67-rated fixture will continue to operate at peak performance even with the moisture, dust, pests and biological debris, such as spores that are present in most indoor growing environments. Not many growers would expect their grow lights to still perform well after being submerged under several feet of water; the A3i can survive such a plunge and be relied on to deliver its photon payload as designed. Howard and his team at The Grove do not just rely on the A3i for their high yields. In their double-stack rooms they deploy Fohse’s lighter, more nimble F1V for its pound-for-pound power.

Just like the A3i, the F1V fixtures rely on industry-proven Samsung LEDs for their photon delivery. While almost the same dimensions as the A3i, at 38 lbs. (17.2 kg) per fixture they are almost half the weight of each A3i (70 lbs./31.75kg each). Like the A3i fixtures, their power supply rating is +100,000 hours. Depending on the needs of the grower and the ability of the existing systems, Fohse offers 420W, 600W, and 800W versions of the F1V. In his own F1V rooms, Howard has reported similarly positive results as in his A3i rooms: 60%+ yield increases, increased utility efficiencies, and better labor efficiency. The team now does not have to “chase canopy” by raising and lowering the lighting fixtures to achieve late-flower PPFD intensities like they did with the old LED lights that they were using in those double-tiered systems.

Fohse lighting products outperform their competition not only at The Grove, but anywhere they have been put to the test. So why hasn’t every cannabis grower switched over to Fohse?

Growers who have not yet seen the results firsthand still believe that LEDs cannot keep up with the high lighting demands of cannabis the way that HPS lighting traditionally has. The narrative had long been one of incremental change and an acceptance that two pounds of harvested yields per light fixture was the best one could expect. At the turn of the century, there was chatter that this didn’t have to be “good enough.”

@Keene.Media

By 2015, growers both professional and amateur alike had proven that three pounds per light was achievable based on advancements up to that point, but no one thought it would ever get better than that. Until Fohse set out to prove them all wrong, and then did. They showed that higher light output does not have to mean higher heat and that Diode technology had come a long way in just a few short years. Howard gives his take on this phenomenon:

“Everyone looks at LED lighting as still kind of a novelty; not something where it needs to be yet for cannabis growers. Having seen the evolution of LEDs that the Fohse team has created because of their cannabis mindset, it became obvious that we could focus on producing healthy plants.

A lot of other grow lighting companies are still looking at making and selling lights that can grow anything. Cannabis takes a lot of light and many companies and even growers don’t put enough light into commercial setups. Many cannabis growers never thought that LED technology was ever going to make it, but the power that comes out of Fohse fixtures is insane. Fohse lighting lets the grower focus on plant health and our yields show that. With Fohse LEDs overtaking HPS, you can really push the limits of your grow.”

As Howard said, Fohse fixtures are engineered with a “cannabis mindset.” HPS light output has plateaued because the added heat load is both detrimental to the cannabis crop and uneconomical to counterbalance. With Fohse fixtures growers can focus more on the nuances of a high-intensity light environment instead of combatting heat. Ever since that first time Mike Howard oversaw production in the initial grow room where Fohse products were installed at the Grove, he immediately saw the results. He is now vowing to keep replacing The Grove’s less efficient HPS fixtures and outdated LEDs with Fohse lighting as they continue expanding. Find out how switching to Fohse fixtures will increase your cannabis production and about all of Fohse’s record-busting lighting at Fohse.com.

Sampling

The final rule made several changes to sampling that should reduce burdens on both growers and regulators.

First, the rule increased the sampling window, which is currently 15 days. Samples for testing now need to be taken up to 30 days before a farmer plans to harvest, giving regulators more time to get into fields. Many stated in public comments that 15 days was far too little time to collect an appropriate amount of samples from each producer in the state.

The rule also slightly modified from where on the plant samples need to be taken. While the IFR required collecting a sample from the top third portion of the plant, the final rule now states samples should be taken “approximately five to eight inches from the ‘main stem’ (that includes the leaves and flowers), ‘terminal bud’ (that occurs at the end of a stem), or ‘central cola’ (cut stem that could develop into a bud) of the flowering top of the plant.”

Andrea Hope J. Steel, the director at Coats Rose P.C. and co-leader of the law firm’s Cannabis Business Law group, tells Hemp Grower this provision will allow sampling agents to collect more stem and leaf material than previously allowed.

“That will help reduce instances of hot crops,” Steel says. Stems and leaves typically contain lower levels of cannabinoids—and specific to this issue, of tetrahydrocannabinol (THC)—than the flowers.

However, Graff says this still requires sampling from primarily floral material despite comments on the IFR that requested switching to a whole-plant sampling approach. 

The final rule dedicates a significant portion of its 300 pages to addressing and responding to the most highly requested comments, including those on sampling.

“Even though many commenters felt that whole plant sampling should be allowed, AMS is of the opinion that since THC [tetrahydrocannabinol] is concentrated in the flower material of the plant, the flower material is more appropriate to test than the entire plant,” the final rule states.

Perhaps most significantly, the final rule has changed sampling protocol from collecting a “representative sample of every lot [growers] plan to harvest” using specific methodology, according to the IFR, to allowing states and tribes to implement a more “performance-based” method.

The AMS says these performance-based sampling protocols may take into account:

“Flexibilities afforded to States and Indian Tribes developing their own hemp production plans will allow them to incorporate best practices, as those change and develop over time. For example, States and Indian Tribes can adapt field-walking patterns to various sized and shaped hemp grower operations,” the final rule states. “AMS believes that a national standard would be difficult to consistently apply given the various grower operations and that standard ‘zig-zag,’ or letters ‘M’ or ‘Z’ walk patterns may not be feasible for sample collection of micro-acreage producers, very large scale producers or those with polygonal hemp lots.”

States will need to include details of their performance-based sampling methods in their hemp plans, which the USDA must approve. (An updated guide on sampling has been published on the AMS website.)

 

Testing

While the final rule implemented generally positive sampling changes for the industry, THC testing will, for the most part, remain burdensome. 

The final rule retains that hemp must remain below 0.3% total THC on a dry-weight basis. Total THC is defined as the sum of the delta-9 THC and tetrahydrocannabinolic acid (THCA). On its own, THCA does not produce psychoactive effects like delta-9 THC, but it can be converted to THC through decarboxylation, which is the process required for testing.

While increasing that limit was one of the most highly requested changes in public comments, the USDA was unable to do so, as that limit was written into law in the Agriculture Improvement Act of 2018 (the 2018 Farm Bill). It’s notable that total THC, however, was not written into the farm bill—that bill defines hemp only by delta-9-THC levels. In its final rule (as well as the IFR), the USDA interprets the language of the farm bill to mean that total THC must be tested.

However, legislation has been introduced in both Kentucky and at the federal level by Sen. Rand Paul to amend that limit to 1%, which would quell the total THC versus delta-9-THC debate.

“There’s still some work to be done, but [the USDA] acknowledged that by pushing off the DEA lab requirement until 2022, so they acknowledged they don’t necessarily have it right.” – Jeff Greene, co-founder, Florida Hemp Council

The final rule also retained “one of the most hated provisions,” Graff says—its requirement for labs testing hemp to be registered with the U.S. Drug Enforcement Administration (DEA).

“Although AMS received comments in opposition to this requirement, AMS is retaining the requirement in this final rule that any laboratory testing hemp for purposes of regulatory compliance must be registered with DEA to conduct chemical analysis of controlled substances… ,” the final rule states. “Registration is necessary because laboratories could potentially handle cannabis that tests above 0.3 percent THC on a dry weight basis, which is, by definition, marijuana and a Schedule 1 controlled substance.”

In 2020, the USDA announced the delay of some requirements outlined in the IFR, including the requirement for labs to be registered by the DEA. That delay has been further extended under the final rule until December 2022.

Jeff Greene, co-founder and director of business development of The Florida Hemp Council, sees that delay as a good sign—especially if the new Biden Administration chooses to reexamine and amend the final rule.

“There’s still some work to be done, but [the USDA] acknowledged that by pushing off the DEA lab requirement until 2022, so they acknowledged they don’t necessarily have it right,” Greene says. “I think if the industry can show the USDA that [the DEA lab requirement] is not necessary over the next year, I believe it will be lifted.”

The final rule did make one positive change on the testing front. It raised the negligence threshold from 0.5% to 1%, which means if hemp tests above 0.3% but below 1%, it will not be considered a negligent violation (however, it will still need to be disposed of or remediated). Those with crops testing at or above 1% THC will receive a Notice of Violation from the USDA, which will include a corrective action plan that producers are required to follow by a certain date and report progress on to the USDA. Producers with more than three negligent violations within a five-year period will be ineligible to participate in the licensed hemp program for the next five years.

However, producers are only subject to a maximum of one negligent violation per year, even if their hemp from multiple lots tests up to 1% THC.

“I think it has taken a lot of the bite out of criminality,” Greene says about the increased negligence limit.

 

Options for Hot Hemp

If hemp does test “hot” above the 0.3% THC limit, the final rule has given producers additional options for disposal beyond the total destruction written into the IFR.

States now have several options for more productive and less wasteful methods of disposal that can result in useful soil amendments. Those include:

• plowing under
• mulching/composting the hemp
• disking
• shredding the biomass with a bush mower or chopper.

Producers may also bury or burn their hot hemp. (The AMS implemented these additional options in early 2020, but they were not written into the IFR.)

The final rule also implements a brand-new option for hot crops: remediation.

The rule states producers can remediate their material by “removing and destroying flower material, while retaining stalk, stems, leaf material, and seeds.” Producers may also shred the entire plant to create a “biomass-like material” and then retest it for compliance.

Producers also no longer need to use a DEA-registered distributor or law enforcement to dispose of hot hemp.

“Through both forms of remediation, producers may be able to minimize losses, and in some cases produce a return on investment while ensuring that non-compliant material does not enter commerce,” the final rule states. (The AMS has more information about crop disposal and remediation on its website.)

 

Other Changes and a Potential for Future Amendments

The final rule makes several other changes, including clarifying tribal authority over hemp production.

“The IFR did not specifically address whether a tribe with an approved USDA plan could exercise primary regulatory authority over the production of hemp across all its territory or only lands over which it has inherent jurisdiction,” AMS says on its website. “The final rule provides that a tribe may exercise jurisdiction and therefore regulatory authority over the production of hemp throughout its territory regardless of the extent of its inherent regulatory authority.”

The AMS also makes clear in the new regulations that the final rule only pertains to hemp cultivation. Any production that takes place afterward is under purview of the DEA and U.S. Food and Drug Administration (FDA).

“What happens after growth is not under the purview of the USDA,” Steel says.

“Overall, the final rule’s contents in some ways show progress and demonstrate the USDA has looked into the industry as part of its public comment process. In another way, the final rule remains stagnant.” – Garrett Graff, managing partner, Hoban Law Group

While these regulations are the so-called “final rule” on hemp, they may not be so final. Several industry sources say that President Joe Biden’s administration may call for a freeze on the rule, which is due to take effect March 22, and make amendments to it.

Ultimately, many say the final rule is a step in the right direction for the hemp industry. Still, improvements can be made.

Greene predicts the USDA will learn from how states implement their performance-based sampling procedures and eventually standardize the most successful programs on a federal level.

“The DEA lab requirement and how [hemp is sampled] are two things that will be finalized during the Biden Administration,” Greene says, adding that Sen. Rand Paul’s bill to increase the THC limit to 1% would be the trifecta of amendments for the industry. “If we hit those pitches out of the park, then we win the game.”

When Mike Howard, director of cultivation at The Grove, first caught word of the record-breaking cannabis yields being harvested regularly by fellow grow teams around the country (Lume Cannabis in Michigan and Green Life Productions in Nevada) he knew the game was changing. Once Howard dug deeper into the news, he discovered a common catalyst behind the success of his peers: Both facilities were actively growing under the A3i LED grow light from Fohse. 

After hearing firsthand from the grow teams in Michigan and Nevada how they had increased yields over HPS by 31% and 100% respectively, Howard knew he had to get Fohse lighting into The Grove—and fast!

The Grove, a vertically integrated cannabis business with dispensary, cultivation, distribution and production licenses, has been producing, sourcing and selling high quality edibles, cartridges and recreational cannabis products since 2015. Their 26,600-square-foot growing and production facility is state-of-the-art and eco-friendly. They strive to recreate the conditions that cannabis would find in nature and use only all-natural growing media and inputs as well as biological measures to control any pests or diseases. It only makes sense then that they would seek out and select Fohse products—the best lighting fixtures in the business—to match The Grove’s exacting standards.

The dry Las Vegas air makes for a challenging indoor growing environment for cannabis. Fohse fixtures operate at much cooler temperatures than standard HPS fixtures.

At The Grove, this means that the humidifiers and cooling systems don’t have to work as hard, and that an equilibrium between temperature and humidity level can be more easily achieved and maintained. This has led to some of the record harvests being seen regularly at The Grove.

Looking at how Fohse’s A3i 1500-watt fixtures compare to standard 1000-watt DE HPS fixtures in an “apples to apples” comparison reveals just how in sync these intelligent fixtures are with cannabis. The numbers from a recent, late fall harvest tell an impressive tale:

*Strawberry Cheesecake was the highest-yielding strain at 7.2 lbs/light, while Cookies was the lowest at 5.49 lbs/light

In the now-typical example above from the fall of 2020, the A3i system generated an average of 27% more light as compared to the HPS fixtures. This additional light led to an increase in dry yield harvest weights by a whopping 65%. All of this, while using 16% less energy than the HPS lighting it was compared to and in the same physical footprint of space with the same number of plants.

Remarkable results like those at The Grove are not a fluke or an accident and they are not restricted to Howard and his team alone. Growers all over are finding results like these to be the new norm, regardless of growing media and style of growing.

Lume Cannabis has been tracking results of their Fohse A3i fixtures for over 40 hydroponic growing cycles and across eight different strains of cannabis. Without fail, the team at Lume under Kevin Kuethe’s direction reports higher yields under the A3i than those grown under HPS. For example, with Fohse fixtures they have harvested 7,130 lbs. versus 5,241 lbs. with the same strains grown under HPS. THC levels under Fohse lights have been 3% higher too; 20% versus 17% on average. In other words, the cannabis that Lume grew under Fohse lighting netted more than $2.5 million more than the cannabis grown under HPS.

@Keene.Media

Steve Cantwell at Green Life Productions also reports unbelievable differences since switching over to Fohse’s A3i and F1V fixtures. Green Life Production’s typical harvests under their previous lighting system clocked in at 80-90 lbs. The average harvest now using Fohse fixtures is 160 to nearly 200 lbs. pulled from their 4×8, no-till, living organic soil beds.

Like Howard’s team at The Grove, Cantwell and his team have the enviable logistics problem of figuring out where to put all of the bounty from these sky-high yields. All three teams, The Grove (coco pots), Lume Cannabis (hydroponics) and Green Life Productions (live soil), are blowing harvest records out of the water time and time again across three drastically different cultivation styles. These highly regarded and experienced cannabis producers are showing that the rules have changed and that Fohse lighting fixtures enable previously unobtainable and unthinkable results.

Howard and the grow team at The Grove have achieved their amazing results by relying on the horticultural skills of their talented team, and also by utilizing two of Fohse’s premier products. They have predominantly been using the A3i model, Fohse’s workhorse grow light, to achieve their highest yields. The A3i is specifically designed to grow cannabis and that is exactly what it does. Its spectral distribution is custom-made to address the unique needs of cannabis. As evidenced in the remarkable yields outlined in the table above, the A3i’s output (of up to 4,970 µmol/s depending on configuration) can be adjusted to supply seasonably appropriate lighting depending on the growth phase of the crop. All of this while producing up to 156% more light per fixture and burning cooler (no hotter than dishwashing water) than traditional HPS grow lights. This means the A3i is safer to operate for both growers and their cannabis crops.

The A3i system is designed to handle the harsh extremes of a growing environment. The IP67-rated fixture will continue to operate at peak performance even with the moisture, dust, pests and biological debris, such as spores that are present in most indoor growing environments. Not many growers would expect their grow lights to still perform well after being submerged under several feet of water; the A3i can survive such a plunge and be relied on to deliver its photon payload as designed. Howard and his team at The Grove do not just rely on the A3i for their high yields. In their double-stack rooms they deploy Fohse’s lighter, more nimble F1V for its pound-for-pound power.

Just like the A3i, the F1V fixtures rely on industry-proven Samsung LEDs for their photon delivery. While almost the same dimensions as the A3i, at 38 lbs. (17.2 kg) per fixture they are almost half the weight of each A3i (70 lbs./31.75kg each). Like the A3i fixtures, their power supply rating is +100,000 hours. Depending on the needs of the grower and the ability of the existing systems, Fohse offers 420W, 600W, and 800W versions of the F1V. In his own F1V rooms, Howard has reported similarly positive results as in his A3i rooms: 60%+ yield increases, increased utility efficiencies, and better labor efficiency. The team now does not have to “chase canopy” by raising and lowering the lighting fixtures to achieve late-flower PPFD intensities like they did with the old LED lights that they were using in those double-tiered systems.

Fohse lighting products outperform their competition not only at The Grove, but anywhere they have been put to the test. So why hasn’t every cannabis grower switched over to Fohse?

Growers who have not yet seen the results firsthand still believe that LEDs cannot keep up with the high lighting demands of cannabis the way that HPS lighting traditionally has. The narrative had long been one of incremental change and an acceptance that two pounds of harvested yields per light fixture was the best one could expect. At the turn of the century, there was chatter that this didn’t have to be “good enough.”

@Keene.Media

By 2015, growers both professional and amateur alike had proven that three pounds per light was achievable based on advancements up to that point, but no one thought it would ever get better than that. Until Fohse set out to prove them all wrong, and then did. They showed that higher light output does not have to mean higher heat and that Diode technology had come a long way in just a few short years. Howard gives his take on this phenomenon:

“Everyone looks at LED lighting as still kind of a novelty; not something where it needs to be yet for cannabis growers. Having seen the evolution of LEDs that the Fohse team has created because of their cannabis mindset, it became obvious that we could focus on producing healthy plants.

A lot of other grow lighting companies are still looking at making and selling lights that can grow anything. Cannabis takes a lot of light and many companies and even growers don’t put enough light into commercial setups. Many cannabis growers never thought that LED technology was ever going to make it, but the power that comes out of Fohse fixtures is insane. Fohse lighting lets the grower focus on plant health and our yields show that. With Fohse LEDs overtaking HPS, you can really push the limits of your grow.”

As Howard said, Fohse fixtures are engineered with a “cannabis mindset.” HPS light output has plateaued because the added heat load is both detrimental to the cannabis crop and uneconomical to counterbalance. With Fohse fixtures growers can focus more on the nuances of a high-intensity light environment instead of combatting heat. Ever since that first time Mike Howard oversaw production in the initial grow room where Fohse products were installed at the Grove, he immediately saw the results. He is now vowing to keep replacing The Grove’s less efficient HPS fixtures and outdated LEDs with Fohse lighting as they continue expanding. Find out how switching to Fohse fixtures will increase your cannabis production and about all of Fohse’s record-busting lighting at Fohse.com.

When Mike Howard, director of cultivation at The Grove, first caught word of the record-breaking cannabis yields being harvested regularly by fellow grow teams around the country (Lume Cannabis in Michigan and Green Life Productions in Nevada) he knew the game was changing. Once Howard dug deeper into the news, he discovered a common catalyst behind the success of his peers: Both facilities were actively growing under the A3i LED grow light from Fohse. 

After hearing firsthand from the grow teams in Michigan and Nevada how they had increased yields over HPS by 31% and 100% respectively, Howard knew he had to get Fohse lighting into The Grove—and fast!

The Grove, a vertically integrated cannabis business with dispensary, cultivation, distribution and production licenses, has been producing, sourcing and selling high quality edibles, cartridges and recreational cannabis products since 2015. Their 26,600-square-foot growing and production facility is state-of-the-art and eco-friendly. They strive to recreate the conditions that cannabis would find in nature and use only all-natural growing media and inputs as well as biological measures to control any pests or diseases. It only makes sense then that they would seek out and select Fohse products—the best lighting fixtures in the business—to match The Grove’s exacting standards.

The dry Las Vegas air makes for a challenging indoor growing environment for cannabis. Fohse fixtures operate at much cooler temperatures than standard HPS fixtures.

At The Grove, this means that the humidifiers and cooling systems don’t have to work as hard, and that an equilibrium between temperature and humidity level can be more easily achieved and maintained. This has led to some of the record harvests being seen regularly at The Grove.

Looking at how Fohse’s A3i 1500-watt fixtures compare to standard 1000-watt DE HPS fixtures in an “apples to apples” comparison reveals just how in sync these intelligent fixtures are with cannabis. The numbers from a recent, late fall harvest tell an impressive tale:

*Strawberry Cheesecake was the highest-yielding strain at 7.2 lbs/light, while Cookies was the lowest at 5.49 lbs/light

In the now-typical example above from the fall of 2020, the A3i system generated an average of 27% more light as compared to the HPS fixtures. This additional light led to an increase in dry yield harvest weights by a whopping 65%. All of this, while using 16% less energy than the HPS lighting it was compared to and in the same physical footprint of space with the same number of plants.

Remarkable results like those at The Grove are not a fluke or an accident and they are not restricted to Howard and his team alone. Growers all over are finding results like these to be the new norm, regardless of growing media and style of growing.

Lume Cannabis has been tracking results of their Fohse A3i fixtures for over 40 hydroponic growing cycles and across eight different strains of cannabis. Without fail, the team at Lume under Kevin Kuethe’s direction reports higher yields under the A3i than those grown under HPS. For example, with Fohse fixtures they have harvested 7,130 lbs. versus 5,241 lbs. with the same strains grown under HPS. THC levels under Fohse lights have been 3% higher too; 20% versus 17% on average. In other words, the cannabis that Lume grew under Fohse lighting netted more than $2.5 million more than the cannabis grown under HPS.

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Steve Cantwell at Green Life Productions also reports unbelievable differences since switching over to Fohse’s A3i and F1V fixtures. Green Life Production’s typical harvests under their previous lighting system clocked in at 80-90 lbs. The average harvest now using Fohse fixtures is 160 to nearly 200 lbs. pulled from their 4×8, no-till, living organic soil beds.

Like Howard’s team at The Grove, Cantwell and his team have the enviable logistics problem of figuring out where to put all of the bounty from these sky-high yields. All three teams, The Grove (coco pots), Lume Cannabis (hydroponics) and Green Life Productions (live soil), are blowing harvest records out of the water time and time again across three drastically different cultivation styles. These highly regarded and experienced cannabis producers are showing that the rules have changed and that Fohse lighting fixtures enable previously unobtainable and unthinkable results.

Howard and the grow team at The Grove have achieved their amazing results by relying on the horticultural skills of their talented team, and also by utilizing two of Fohse’s premier products. They have predominantly been using the A3i model, Fohse’s workhorse grow light, to achieve their highest yields. The A3i is specifically designed to grow cannabis and that is exactly what it does. Its spectral distribution is custom-made to address the unique needs of cannabis. As evidenced in the remarkable yields outlined in the table above, the A3i’s output (of up to 4,970 µmol/s depending on configuration) can be adjusted to supply seasonably appropriate lighting depending on the growth phase of the crop. All of this while producing up to 156% more light per fixture and burning cooler (no hotter than dishwashing water) than traditional HPS grow lights. This means the A3i is safer to operate for both growers and their cannabis crops.

The A3i system is designed to handle the harsh extremes of a growing environment. The IP67-rated fixture will continue to operate at peak performance even with the moisture, dust, pests and biological debris, such as spores that are present in most indoor growing environments. Not many growers would expect their grow lights to still perform well after being submerged under several feet of water; the A3i can survive such a plunge and be relied on to deliver its photon payload as designed. Howard and his team at The Grove do not just rely on the A3i for their high yields. In their double-stack rooms they deploy Fohse’s lighter, more nimble F1V for its pound-for-pound power.

Just like the A3i, the F1V fixtures rely on industry-proven Samsung LEDs for their photon delivery. While almost the same dimensions as the A3i, at 38 lbs. (17.2 kg) per fixture they are almost half the weight of each A3i (70 lbs./31.75kg each). Like the A3i fixtures, their power supply rating is +100,000 hours. Depending on the needs of the grower and the ability of the existing systems, Fohse offers 420W, 600W, and 800W versions of the F1V. In his own F1V rooms, Howard has reported similarly positive results as in his A3i rooms: 60%+ yield increases, increased utility efficiencies, and better labor efficiency. The team now does not have to “chase canopy” by raising and lowering the lighting fixtures to achieve late-flower PPFD intensities like they did with the old LED lights that they were using in those double-tiered systems.

Fohse lighting products outperform their competition not only at The Grove, but anywhere they have been put to the test. So why hasn’t every cannabis grower switched over to Fohse?

Growers who have not yet seen the results firsthand still believe that LEDs cannot keep up with the high lighting demands of cannabis the way that HPS lighting traditionally has. The narrative had long been one of incremental change and an acceptance that two pounds of harvested yields per light fixture was the best one could expect. At the turn of the century, there was chatter that this didn’t have to be “good enough.”

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By 2015, growers both professional and amateur alike had proven that three pounds per light was achievable based on advancements up to that point, but no one thought it would ever get better than that. Until Fohse set out to prove them all wrong, and then did. They showed that higher light output does not have to mean higher heat and that Diode technology had come a long way in just a few short years. Howard gives his take on this phenomenon:

“Everyone looks at LED lighting as still kind of a novelty; not something where it needs to be yet for cannabis growers. Having seen the evolution of LEDs that the Fohse team has created because of their cannabis mindset, it became obvious that we could focus on producing healthy plants.

A lot of other grow lighting companies are still looking at making and selling lights that can grow anything. Cannabis takes a lot of light and many companies and even growers don’t put enough light into commercial setups. Many cannabis growers never thought that LED technology was ever going to make it, but the power that comes out of Fohse fixtures is insane. Fohse lighting lets the grower focus on plant health and our yields show that. With Fohse LEDs overtaking HPS, you can really push the limits of your grow.”

As Howard said, Fohse fixtures are engineered with a “cannabis mindset.” HPS light output has plateaued because the added heat load is both detrimental to the cannabis crop and uneconomical to counterbalance. With Fohse fixtures growers can focus more on the nuances of a high-intensity light environment instead of combatting heat. Ever since that first time Mike Howard oversaw production in the initial grow room where Fohse products were installed at the Grove, he immediately saw the results. He is now vowing to keep replacing The Grove’s less efficient HPS fixtures and outdated LEDs with Fohse lighting as they continue expanding. Find out how switching to Fohse fixtures will increase your cannabis production and about all of Fohse’s record-busting lighting at Fohse.com.

Beginning Jan. 21, the Arizona Marijuana Industry Trade Association (MITA) will offer a free, weekly, virtual course for prospective social equity applicants looking to enter the state’s forthcoming adult-use cannabis industry.

While much of the curriculum for the 16-week Social Equity Applicant Mentorship Program is complete, MITA Executive Director Demitri Downing told Cannabis Business Times and Cannabis Dispensary that the association would still welcome industry members who are willing to provide education free of charge.

“We so want people to get involved. … There’s room for other people to add their expertise, and we would love to have them on board,” Downing said.

RELATED: Arizona Health Officials Announce Draft Rules for Adult-Use Cannabis Market

Educational Overview

MITA’s course will focus on specific aspects of Arizona’s medical cannabis program and the cannabis industry more broadly, while welcoming speakers from in and around the industry.

Speakers such as Tahir Johnson, membership manager and diversity, equity and inclusion manager at the National Cannabis Industry Association, and Dr. Bobra Crockett, a business professor at Scottsdale Community College, will discuss the first week’s topic, “Social Equity Licensing, What is the Opportunity and Why?”

Then, Lilach Power, founder and CEO at Giving Tree Dispensary, and Janet Jackim, partner at Zuber Lawler, will be among the panelists to dive into the following week’s topic, “History of Arizona Licensing, Structure of Our Market Place and Who is Who?”

RELATED: Two Dispensaries in Phoenix Team Up to Support Women Empowerment, Raise Funds for Domestic Abuse Shelter

The 16 lessons will weave through divergent takes on the market, from dispensing to cultivation to manufacturing, from extraction to HR to security, according to a course outline that Downing shared with CBT and CD.

“There [are] 1,000 ways to divide up the industry,” Downing said. “We’re just trying to do the best that we can to give them a high-level overview, so some basic information. Our target audience is that true social equity candidate who probably doesn’t know too much about the industry but who’s going to hear about the opportunity. We’re looking at 101s, ABCs.”

Attendees will learn about Arizona-specific regulatory structures and the specific market conditions they create, Downing said, providing this example: “With an unlimited canopy license and what we see as the eventual interstate commerce aspects of cannabis, it’s really wise for the enterprise to invest in a larger-scale cultivation. They shouldn’t plan on facilitating just the Arizona market; they should work towards the national market, as well.”

Along with Downing, who has lobbied on the industry’s behalf and founded MITA in 2016, the mentorship program facilitators are Dr. Will Humble, Paul Paredes and Jeff Tice.

Humble served as director of the Arizona Department of Health Services (ADHS), the agency that regulates cannabis in the state. (The medical program was “his baby,” Downing said.)

Paredes is a consultant at AZ MJ Logic—and the designated “fact-checker” for the mentorship program, according to Downing. Paredes has worked in compliance and written applications, and has directed operations for cultivation and dispensary operations in Arizona. (“He will be on every single panel, and his specific task … is to make sure that nothing is said that isn’t true,” Downing said.)

Tice, a certified public accountant, received one of the first cannabis licenses in Arizona for SWC Tempe. (Educationally, Downing said, “he’s going to be helping make sure that we suck the meat off of the bones” of the presentations.)

Social Equity Questions

Who exactly will qualify as a social equity applicant in Arizona? The answer remains to be seen.

Prop. 207, the adult-use legalization measure that voters passed by 60% in Arizona’s 2020 general election, outlined that the state will issue 26 dispensary licenses to social equity applicants. Licensees will be able to cultivate, manufacture and distribute cannabis, Downing said.

Under the Social Equity Ownership Program (SEOP), Arizona will issue licenses to owners who come from communities that have disproportionately faced the effects of cannabis prohibition.

“Anyone can think that they’re eligible for social equity,” Downing said. “We have an idea because of what’s happened in all the other states, but we’ll see what [Arizona] decides.”

Because of the wait for the SEOP rules, MITA has scheduled lesson modules for the end of the course that will touch on those specific requirements. If it takes longer than that for the state to make an announcement, which Downing said it very well may, MITA will delay teaching those modules until the state announces the rules.

The live weekly modules will be recorded so that registrants can view them on MITA’s website later, he added. People who attend all of the modules will be awarded a certificate at the end of the course.

“It will be online for perpetuity,” Downing said. “I guess at a certain point, one or two or three years from now, or as soon as federal interstate commerce transitions this industry, it will become irrelevant, so we’ll probably take it off. But [until then] the knowledge that is shared will be relevant not just to social equity applicants, but anybody who wants to learn about how the Arizona cannabis industry works.”

About 200 prospective social equity applicants have registered as attendees for MITA’s mentorship program so far, Downing said last week; he anticipates thousands of people will register as the news of it spreads.

He stressed the program’s uniqueness, in how it will provide a free overview of the Arizona and national industry with numerous people participating pro bono, adding, “This is something we’re really proud of.”