INDOOR CANNABIS CULTIVATIONPOSITIVE AND NEGATIVE ASPECTS OF PRODUCING CANNABIS

INDOORS VS GREENHOUSE

CONTENTS• What is Broken Coast?

• What is indoor growing?

• Positive aspects of indoor growing

• Negative aspects of indoor growing

• Indoor vs Greenhouse

• Hybrid greenhouses

• Cost of energy for indoor growing

• Summary

BROKEN COAST

• 45,000 sqft, entirely indoor,

Licensed Producer

• Produce approximately

300kg/mo of dried flower

• Produce approximately

60kg/mo of trim

• Staff of almost 100 people

• Focused on producing highest

quality cannabis

WHAT IS INDOOR GROWING?• GROWN ENTIRELY WITH ARTIFICIAL LIGHTING AND CLIMATE CONTROL

• GROW ROOMS ARE COMPLETELY SEALED FROM THE OUTDOOR

ENVIRONMENT

• REMOVE ANY KIND OF STRESS THE PLANT WOULD EXPERIENCE IN NATURE

• TRY TO MIMIC NATURE AT ITS FINEST

BENEFITS OF INDOOR CULTIVATION

• Temp&humidity control

• Co2 control

• Day/night cycle control

• Consistent light

• Consistency in product size, quality,

potency

• Steady supply of fresh product

• Full employment

ARTIFICIAL LIGHTING

• ALWAYS THE SAME SPECTRUM

• ALWAYS ON THE SAME CYCLE

• ALWAYS THE SAME INTENSITY

ARTIFICIAL ENVIRONMENT

• ALWAYS THE RIGHT TEMP

• ALWAYS THE RIGHT HUMIDITY

• ALWAYS THE SAME CO2 LEVEL

THE POINT OF ALL THIS:

• DRAMATICALLY INCREASED

GROWTH

• DECREASE FLOWERING TIME

• IDEAL BUD STRUCTURE

• CONSISTENT POTENCY

• STRONG TERPENE PROFILE

THE POINT OF ALL THIS:

• QUALTIY DEPENDS ON

CONSISTENCY

• FULL EMPLOYMENT

• STEADY SUPPLY OF FRESH

PRODUCT

DRAWBACKS OF INDOOR CULTIVATION

DRAWBACK: ENERGY CONSUMPTION

DRAWBACK: CONSTRUCTION COST

DRAWBACK: HIGH OPERATING COST?

TRUE OR FALSE?

INDOOR VS GREENHOUSE

• INDOOR OFFERS COMPLETE ENVIRONMENTAL

CONTROL

• CONSISTENT LIGHT INTENSITY AND TEMP

• INDOOR HAS HIGHER ENERGY COST

• INDOOR HAS HIGHER CONSTRUCTION COST

INDOOR VS GREENHOUSE

• GREENHOUSE HAS LOWER ENERGY COST

• GREENHOUSE HAS LOWER CONSTRUCTION COST

• LESS ENVIRONMENTAL CONTROL

INDOOR VS GREENHOUSE

• ENVIRONMENTAL CONTROL IS COST VS QUALITY

• MORE CONTROL = MORE COST

• BETTER ENVIRONMENT = BETTER QUALITY

HYBRID GREENHOUSEGREENHOUSE WITH THE SAME ENVIRONMENTAL CONTROLS AS AN

INDOOR FACILITY

● REDUCE ENVIRONMENTAL SWINGS BY USING OF ARTIFICIAL LIGHTING AND HVAC

● HAVE TO COMPENSATE FOR OUTDOOR ENVIRONMENTAL SWINGS (SUMMER/WINTER)

● LACK OF INSULATION MEANS MORE COOLING IN SUMMER, MORE HEATING IN WINTER

● GAIN IN ENVIRONMENTAL CONTROL MEANS HIGHER ENERGY AND CONSTRUCTION COST

● EVERY COST INCREASE REDUCES THE BENEFIT VS INDOOR

● CONFLICTING GOALS OF COST EFFICIENCY AND QUALITY

HYBRID GREENHOUSE

WHAT MAKES CANNABIS HIGH QUALITY?

TERPENE PROFILE

BUD SIZE

BUD DENSITY

COLORATION

CANNABINOID CONTENT

MOISTURE LEVEL

THE ECONOMICS OF QUALITY

WHAT DOES INDOOR GROWING COST?

BROKEN COAST PRODUCTION COST

• All in cost of $2.65/g

• Includes overhead, management,

maintenance, etc.

• Electricity cost is $0.18/g

(excluding trim)

46%

7%2%

6%

20%

2%

17%

All in cost of production under adult use

wages electricity grow materials shipping costs packaging maintenaince Other

BROKEN COAST PRODUCTION COST

• Electricity cost is $0.18/g

(excluding trim)

• Reducing energy expenses by 2/3

would save $0.12/g

46%

7%2%

6%

20%

2%

17%

All in cost of production under adult use

wages electricity grow materials shipping costs packaging maintenaince Other

BROKEN COAST PRODUCTION COST

• Expected average shelf price of

Broken Coast dried flower under

adult use: $12.00/g

• Reducing energy expenses by 2/3

would save $0.12/g

• $0.12/g would reduce our average

shelf price by 1%

46%

7%2%

6%

20%

2%

17%

All in cost of production under adult use

wages electricity grow materials shipping costs packaging maintenaince Other

SUMMARY

• Broken Coast is focused on producing the highest quality

cannabis possible.

• Our quality based brand means we must have complete control

over the growing environment.

• Energy costs associated with indoor growing do not represent a

significant percentage of the selling price for our products.

• Our discerning customers would not notice a reduction in shelf

price but would not accept a reduction in product quality.

THANKS FOR WATCHINGJOHN MOELLER

PRESIDENT

BROKEN COAST CANNABIS