As a cost comparison, the capital required for an industrial building varies depending on the geographical areas; on average, the baseline cost is $75-80 CDN-ft2. Smart-domes installed value comes in at approximately $30-35 CDN-ft2 and represents a potential 60-65% savings in the capital while delivering an overall superior solution for growers. These figures are for the freestanding structure only, inclusive of all foundations, services, and site works. The unit costs above exclude interior grow room fit-out, auxiliary buildings for personnel, mechanical, electrical, and cannabis-specific cultivation operational items.
When considering say a 125,000-ft2 facility, the savings could be a conservatively $5 million CDN or more. Swissleaf intends to re-invest these savings and implement best-of-breed cannabis ancillary systems from the following vendors:
- Hydroponic/Aeroponic delivery systems including all equipment, procedures, SOP’s and ongoing support
- LED lighting provided by leading worldwide vendor, Fluence
- HVAC equipment supplied by industry leaders, Price Industries
- Mobile racking systems by PIPP Industries
- Solar PV arrays & energy storage systems (ROI dependent)
This capital-intensive grow-room fit-out represents investments in leading technologies for sustainable long-term, low cost, high-quality operations.
The anticipated all in cash OPEX will be in the $1.75-$2.00-CDN per lb area, while high initially as economies of scale are realized, these costs will come down dramatically to $1.00-$1.25-CDN per lb.
Swissleaf believes that a hybrid greenhouse operation is generally not a viable option in Canada, weak sunlight intensity (approx 4 hours daily on average) and colder climate make these largescale operations questionable in terms of their profitability. We prefer to focus solely on the indoor 7/24 growing option exclusively, applying our low-cost smart-domes.
Costs vary significantly for a full build-out facility (hybrid greenhouse or warehouse) can range from $275-$500-CDN per ft2, Swissleaf projected budgetary all in CAPEX (inclusive of land) is in the range of $200-$225-CDN per ft2. for the micro facility.
Preliminary Business Model
Initial CAPEX for the micro-LP 80’x90’ facility is $2.5 million-CDN (inclusive of land), the total projected production 600 kg-per year. At an estimated average selling price of $5,000-CDN per kg, for full-year revenue of $3,000,000-CDN per year.
If we assume gross margins of 30% of revenue, this analysis indicates that the micro-LP cultivation platform would be extremely profitable with a payback of close to 2.7 years.
Use of Off-Peak Power
Swissleaf intends to manage power consumption carefully and restrict all blackout periods to daytime high peak power times periods. With this strategy, off-peak power rates of 6.5 cents kW-hr are realized from 7 pm to 7 am time zone. Cultivation planning will encourage the use of cheap power, where possible. Future designs could deliver designs that utilize off-peak power complemented with a ground-mounted solar PV array and backup battery storage.
Water and Heat Recovery Systems
The aeroponic cultivation solution is attractive from the standpoint of requiring significantly less water than hydroponics. All water is provided using standard reverse osmosis systems; wastewater is treated and recycled.
Due to the tremendous cooling loads of the grow rooms, there will be a significant amount of heat reject needed. Swissleaf plans to utilize heat recovery exchangers to heat the dome during winter periods and “free cooling” external air exchangers to cool the grow rooms during winter periods as well.
Overall, energy modeling analysis will be conducted to ensure that operations deliver high energy utilization efficiencies. OPEX will drive the business model with electricity consumption as the most impactful monthly cost component.