With legal restrictions loosening and demand rising, firms have begun clambering for any piece of the multi-billion dollar cannabis pie. An industry that has been relatively dormant for the better part of a century is now finally opening up – and to great success. Even though cannabis is still on its journey to becoming a legalized product in most areas of the world, some of its byproducts have already taken a strong foothold in the market. One such compound being cannabidiol (CBD).
As of right now, CBD extraction in Europe is still heavily regulated due to the volume of restrictions and laws surrounding the production of hemp. This makes it incredibly difficult to scale a company’s cannabis cultivation, whether it be indoors or outdoors. That being said, there may be financial, environmental, and legal reasons to choose outdoor over indoor cultivation, or vice versa. Although the demand for firms to enter the market is quite high, the knowledge surrounding European cannabis cultivation amongst these new players is relatively low.
Understanding the difference between indoor and outdoor cannabis cultivation isn’t just useful for producers, either. This industry information is also incredibly valuable for distributors looking to buy, market, and sell CBD and other cannabis-derived products. Knowing how a product is made will help one determine the quality of product, its production, and its effects. To help business owners better understand the fundamental differences between indoor versus outdoor CBD, here is a breakdown of each type’s features, advantages, and drawbacks.
Indoor Cannabis Cultivation
Among current world hemp producers, indoor growing facilities have become one of the most popular forms of cannabis cultivation, but not for the reasons you might think. The United States, like Europe, is still trying to navigate its long history of cannabis prohibition. Rather than promoting outdoor, sun-grown cannabis, government officials have banned outdoor cannabis cultivation altogether. Project CBD, an American not-for-profit dedicated to sharing cannabis research, has acknowledged the impact of the War on Drugs in driving the cannabis industry underground – or in this case, indoors. Europe has a history of following the United States when it comes to cannabis regulation considering their power in international trade. The most recent example of this is European Parliament matching the U.S. THC policy.
While the switch to indoor facilities was initially an inconvenience, the transition proved to have several advantages that complemented the supply side of the market.
When it comes to comparing indoor and outdoor cannabis cultivation, the biggest difference is easily a matter of control. With an indoor cultivation facility, cannabis producers can control almost every aspect of the growing environment, from the humidity to the soil quality to even the strength of light radiation. In almost every category, an indoor facility helps optimize the consistency of each and every harvest. This is incredibly important when you consider that all hemp and hemp compounds that exceed the 0.3% THC limit must be destroyed. In October of 2020, the European Parliament finally voted to increase the authorized THC level for industrial hemp to match that of the United States’s current legislation. While an increase, this still results in the destruction of all organic materials that exceed this limit. Having more control over the biological development of a crop can help to reduce the costs associated with meeting guidelines such as this. The caveat of having so much control, however, is that it comes at a cost.
High Costs and Limited Scalability
Creating a facility that is large enough – and technologically sophisticated enough – to store and promote the growth of the entire harvest of cannabis is a massive financial burden. To be able to even implement the level of control desired from these indoor facilities requires the integration of advanced machinery and technology. This can include anything from remotely operated heat lamps to dehumidifiers to artificial intelligence programs. Machine learning software, for example, can help monitor, track, and record the levels of each specified environmental criteria. This technology can even alert staff on hand if a problem were to arise. Some iterations can even inform operators on what to do when a problem is detected. But again, this comes at a high price point.
A massive capital investment like this can limit the scalability of European cannabis cultivation in the long-term. Unlike a field, one can’t just purchase nearby property to expand their indoor growing operation. If they were to, they would have to construct an entirely new partner facility – further driving up the cost per plant to a potentially unprofitable level. The real concern with indoor CBD extraction in Europe is that none of the technology and equipment used is entirely optional. For instance, indoor cannabis cultivation needs to take place in an environment that hovers between 70 to 80 percent humidity at all times. This is because anything below 70 percent can diminish yields due to poorer photosynthetic efficiency, and anything above 80 percent dramatically increases the risk window for fungal, bacterial, and viral infections.
All of this begs the question: is outdoor cannabis cultivation better?
Outdoor Cannabis Cultivation
Almost every agricultural crop in the world is predominantly grown outside, and for good reason. Harvesting organic material in outdoor environments is typically less expensive, scalable, and susceptible to some of the chemical benefits of direct exposure to sunlight. For these reasons and more, outdoor cannabis cultivation can be a fruitful investment.
Low Carbon Footprint and Full Spectrum Product
One of the greatest advantages, if not the greatest advantage, of outdoor cultivation is the lower costs – both financially and environmentally. Not having to build a technologically supported greenhouse is much less expensive than having to retrofit an existing piece of property. Similarly, it also dramatically reduces the volume of carbon emissions released in the creation and maintenance of the facility. But lower costs aren’t the only advantage of outdoor cultivation. One of the defining criteria to leverage when comparing indoor versus outdoor CBD is the benefits of full spectrum light exposure. A recent study found that cannabis plants that experience ambient light exposure produce greater amounts of cannabinoids, particularly terpene. This facilitates what is known as the entourage effect, which says that cannabidiol, in the presence of other cannabinoids, has a greater variety of possible health benefits.
But, of course, outdoor cultivation comes with its own problems as well. You are subject to poor weather conditions, a greater variety of pests and vermin, and your growing season is limited to only part of the year.
Neither production method is perfect, and each has its advantages and disadvantages. The trick to being successful as a European cannabis cultivation firm is to know which method suits your company best. In some cases, it may be better to work with an existing firm that has a proven history with CBD extraction in Europe. If you are looking to leverage the economies of scale that industry experts have developed, you should consider working with CanX. To learn more about our operations and services, contact us today.