US (KY): Maximizing your cultivation license

Operating a Kentucky cannabis cultivation facility comes with unique opportunities and challenges as the new state program gets underway. Whether you hold a Kentucky cultivator license for Tier I, Tier II, Tier III (or Tier IV when they become available), maximizing your space for yield and efficiency is key to running a successful and profitable operation. However, there are nuances to each license tier that may influence a grower's facility design, business operations, and vegetation strategy to ensure maximum yields.

Before diving into tier-specific strategies, it's essential to understand a few critical concepts that will impact how you manage your facility:

What constitutes cultivation canopy: In Kentucky, any plant over 8 inches in height is considered part of your allowable cultivation canopy. This includes plants in both the vegetative and flowering stages. Therefore, how you manage your plants during the vegetative stage will have a direct impact on your overall production capacity.

Figuring out the best vegetation strategy: The longer your plants remain in the vegetative stage (over 8"), the more time they occupy valuable space without yielding a harvestable product. To maximize your mature canopy space, minimizing time in vegetation is crucial.

Here's a full breakdown of the Kentucky cannabis cultivation licensing tiers, with Next Big Crop's assessment based on our extensive experience working with operators in facilities of all sizes.

Tier I Cultivators (≤ 2,500 sq. ft.)
As a Tier I cultivator, your small canopy requires precision and efficiency to be profitable. With a limited growing area, every square foot counts, and you'll need to adopt strategies that maximize yield without exceeding your allowable canopy size.

Key strategies
Condense Your Veg: When operating a short vegetation cycle of 1-3 weeks, a small veg bench can go a long way. If you are spacing your flower plants at 1 plant per 2 ft2 (aka square feet), consider reducing that to 1 plant per 1ft2, or even tighter in veg. If you have a total canopy of 2,500 ft2—can you keep 2,000 of it flowering at all times?

Stagger Harvests: If you harvest all of your canopy at once, you will need a much larger number of replacement plants at harvest time, requiring more canopy dedicated to veg. If you break up your canopy into two or three growing rooms and harvest schedules, you'll only need half or even a third of your total flowering plant count backed up in veg at any given time.

Strain Selection: Choose strains with shorter flowering cycles and lower vegetative requirements to turn over crops more quickly. Strains that flower in 7-8 weeks can help you achieve more harvests per year, boosting your overall yield. If you're in search of high potency and high-yield strains with short flowering cycle times, hit up Next Big Crop today.

Automation: In a small facility, automation of key processes like irrigation, lighting, and temperature control can help reduce labor costs and improve consistency, both of which are crucial for profitability at this scale.

Tier II Cultivators (≤ 10,000 sq. ft.)
As a Tier II cultivator, you have more flexibility with space and can explore a broader range of cultivation techniques. However, efficient canopy management is still crucial to maximize your return on investment.

Key strategies
Optimized Room Layout: Divide your space strategically into vegetative and flowering rooms while maintaining flexibility. For example, consider a modular design that allows for converting vegetative rooms into flowering rooms when necessary to avoid downtime and keep your canopy at full capacity year-round.

Perpetual Harvest System: Implementing a perpetual harvest system can ensure that a portion of your canopy is always in the flowering stage. By staggering plant cycles, you can harvest different sections of your canopy at different times, allowing for more frequent harvests and consistent revenue flow.

Environmental Controls: With a larger space, it becomes even more important to tightly control the growing environment. Invest in advanced environmental control systems that maintain ideal temperature, humidity, and CO2 levels. This will not only improve yield but also ensure higher quality plants that fetch premium prices.

Efficient Use of Labor: As your facility ramps up operations, labor costs become more significant. Try to touch and move plants as few times as possible throughout their lives. If your process involves multiple plant moves from bench to bench or room to room, and/or multiple labor-intensive pruning or staking sessions, your labor is going to add up. Other ways to keep these costs under control include automating repetitive tasks such as watering, fertigation, and trimming. This will allow your team to focus on high-value tasks like monitoring plant health and refining cultivation techniques.

Tier III Cultivators (≤ 25,000 sq. ft.)
Tier III cultivators have the capacity to scale significantly, and with this increased capacity comes the opportunity for larger yields and greater profits. However, without efficient operational planning, you risk underutilizing your space and increasing costs.

Key strategies
Maximize Canopy Density: To make the most of your 25,000 ft2 canopy, focus on plant density. Consider flowering at 1.5-2 ft2 per plant and less than half that in veg.

Vegging in Place: One potential way to optimize your larger facility is to employ a "vegging in place" strategy. By allowing plants to vegetate in the same space where they will eventually flower, you eliminate the need for separate vegetative and flowering rooms. If you usually flower for 8 weeks, add another 3, call it an 11-week cycle and utilize all allowable mature canopy for flowering rooms (+ 2-3 weeks).

Integrated Pest Management (IPM): With more plants under cultivation, the risk increases for pest and disease outbreaks. A comprehensive Integrated Pest Management (IPM) plan that includes biological controls, regular monitoring, and environmental adjustments will help you avoid costly infestations that could ruin entire crops.

Energy Efficiency: With larger facilities come higher energy costs. Implement energy-efficient lighting solutions, such as LED lights, and consider alternative energy sources like solar power to reduce operational costs. Efficient use of energy also reduces your environmental impact, which could be a selling point for eco-conscious consumers.

Expansion and Diversification: Consider diversifying your offerings by exploring different cannabis products. With larger facilities, you can allocate space for experimentation and expansion into new market segments as regulations evolve, potentially increasing revenue streams. As the market evolves, be quick to lead with new product offerings and formats. Be sure to establish a process for introducing and releasing new strains regularly.

Tier IV Cultivators (≤ 50,000 sq. ft.)
Although Tier IV licenses are currently unavailable during Kentucky's initial cannabis licensing phase, cultivators should plan for the future. A facility of this size will function more like an industrial-scale operation, requiring careful business planning and strategic partnerships.

Key strategies
Automation and Data: At this scale, automating as much of the cultivation process as possible is essential. Investing in state-of-the-art technology for environmental controls, nutrient delivery systems, and automated irrigation equipment will allow you to reduce labor costs and improve efficiency. Additionally, leveraging data analytics will help you optimize every aspect of your operation, from plant growth to energy consumption.

Supply Chain Management: With such a large facility, managing your supply chain becomes critical. Establish strong relationships with processors and dispensaries to ensure a consistent market for your product. Consider forming strategic partnerships to streamline the distribution process and increase your market reach.

Research and Development: At this scale, there is room to invest in forward-thinking research and development. Consider experimenting with new strains, propagation and cultivation methods, and product formats to stay ahead of market trends and meet the evolving needs of Kentucky medical cannabis patients.

Cannabis Genetics Sourcing for Kentucky Cultivators
No matter the size of your growth, quality cannabis genetics are what really counts. You can build the best facility in the world, and spend all your time dialing inefficiencies or implementing new AI technologies, but if you don't bring in A+ genetics, you'll never produce A+ flower—or a boutique brand reputation. We can't overemphasize the importance of developing and maintaining a high-quality and proven strain library—from the immaculate conception period onward. Be sure to establish a process for launching hot new strains and maintaining classic genetics.

Along with genetics, the foundation for success in the Kentucky cannabis market is built on efficiency and innovation. By optimizing your cannabis facility design, minimizing downtime in vegetative growth, and leveraging modern technologies like tissue culture, you can maximize your yield and profits while operating within the regulatory requirements of your license. Each cultivation tier presents unique opportunities and challenges, but with the right strategies, you can make the most of your Kentucky cannabis cultivator license.