Are You Seeing Outdoor Grows?
Are you seeing outdoor grows within this industry? And if not, why is that?
Oh absolutely, there are a lot of outdoor grows, big ones all over the place. Outdoor grows are very beneficial for a lot of reasons. The main reason is the lack of expense. It's so much cheaper to run an outdoor grow than an indoor one, which means your margins are generally higher.
A big downside to outdoor is you only get one rep (a rep is a harvest) a year, however your harvest is also bigger because you have much bigger plants. You're not paying for electricity, you're not paying for a lot of those expenses, so it's cheaper to run and a lot less overhead. That's always good. On the flip side, you get less product per year compared to indoor, because with indoor growing, you can do five or six reps versus outdoor growing’s one rep in the same year’s time.
Then there's the hybrid method, where you can do a light deprivation. To do this, you have your outdoor grow but then you also put in some lights to artificially replicate the sun. This way, even when it's dark out, the plants still have light, and they keep growing. When you want to turn off the light, you put a tarp over top of the greenhouse or hoop-house to “turn off the lights” when the sun is still up to mimic nighttime. With this method, you can then get five, six reps a year. The more harvest you get a year, obviously the more money you make, right? So there's hybrid grows out there as well.
The downside is the quality isn't near as good and your product suffers a lot from pests and mold and things like that because you are not allowed to use a lot of the pesticides that the black market uses. You're heavily restricted on what you're allowed to use and everything has to be lab tested so you can't really skirt around it. That's a big aspect of what the delineator between outdoor and indoor growing is, and also your geography makes a huge impact.
Northern California is the best place to grow outdoor, and Puerto Rico is the worst for outdoor. In the beginning, everyone was saying they were all coming down to Puerto Rico and going to spin up all these outdoor facilities. They were all laughing at me because I was going to do indoor and spend all this money, because power in Puerto Rico is insanely expensive. Insane.
Just to give you an idea, my power bill is about $30,000 a month just for my grow. My three bedroom house with air conditioning and lights, a very normal middle-class house in a suburb averages between $700-$800 a month for power during the summer. That gives you an idea of how expensive power is down there. I use the acs only when I'm in the house or only when I'm sleeping, ceiling fans rarely. We try to minimize our home power usage as much as possible because it's so expensive. That gives you an idea of why it's very advantageous to want to go outdoors.
So all these guys think Puerto Rico is sunny all the time. it’s never cold, it's the perfect weather, perfect climate for growing. The humidity levels are great, so outdoor is the way to go. The problem is hurricanes, but all these people didn't seem to take that into account, telling themselves they’ll be fine, what’s the likelihood of getting hit with a hurricane?
It's Puerto Rico - it's guaranteed that a hurricane is going to come through. I've been through two of them since I've been down there in the last nine years. It's absolutely guaranteed that hurricanes are going to hit Puerto Rico. If you have an outdoor grow in Puerto Rico and a hurricane hits, guess what happens? When Maria came, which was the craziest hurricane ever, I was down there and it was insane. When Maria passed through, guess how many of the outdoor grows existed after that? Zero. That's why you don't build outdoor grows in Puerto Rico.
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Cheers!
.: Adam
CEO