Horticulture US: Tomatoes out, weed in?

Filling gaps in the market, Americans are good at it. In the past decade, they did this with greenhouse vegetables. Horticulturists kept expanding, and with the idea of ‘local=tasty’, they started growing tomatoes, cucumbers and bell peppers, getting good prices. At many a horticulture fair in the US, you can now hear rumours of a new ‘cash crop’, which drew the attention of growers, investors and greenhouse builders: cannabis sativa. For an average revenue of 4,000 dollars per square metre, the American growers are willing to put aside their tomatoes. Is there something fishy about this?

The legalization of cannabis has led to a new sort of ‘Gold Rush’ in the US. Serious investors see enormous opportunities in this new industry. And not without success; investors who put money into marijuana start-ups, growing facilities or project development last year, have achieved a return of 67% in one year. So it’s not strange that an internet billionaire like Peter Thiel, one of the first investors in Facebook and founder of PayPal, announced he would invest millions of dollars in the marijuana business early this year.

 “This new industry offers enormous opportunities for professional horticulturists,” says Damian Solomon, an American cultivation advisor who earned his stripes at companies like breeder Monsanto and large American tomato grower EuroFresh. Now Solomon works a director of cultivation ad MedMen, a turnkey project developer that guides and advises investors in marijuana. According to Solomon, there is a great need for know-how from greenhouse horticulture. “There’s a lot of demand for high-quality and responsibly grown marijuana, but so far few people with knowledge of plants or large-scale commercial production have worked in this sector. So it’s logical that people from food horticulture are asked to share their know-how.”

Investing in marijuana is not just a trend among many American and Canadian investors. Existing growers are also showing an interest in getting rid of their tomato or bell pepper crops, in favour of the cultivation of cannabis. According to Solomon, it’s mainly the bizarrely high revenue that convinces growers. “A standard greenhouse crop like tomato makes a grower a revenue of about 100 dollars per square metre a year. High quality marijuana yields around 4,000 dollars per square metre at the moment, so it’s easy to do the math.”

How much can the market grow? Won’t these growers face a rude awakening when not just the use of marijuana for recreational use, but the production will be legalized within a matter of years as well? Will the market saturate quickly if the current expansion in the market continues at this pace? According to Solomon, the yields of 4,000 dollars per square metre will be a bit lower, but the professional growers will still end up with good earnings. “Precisely this group of entrepreneurs knows exactly how to grow as efficiently as possible. That’s why we are already applying their know-how to the development of the ultimate production system,” Solomon says. “We are even looking into the use of semi-closed greenhouses now, the most advanced technique supplied by the Dutch greenhouse builders at the moment. But we are also looking at the use of integrated organic crop protection, to use as few chemical products as possible, and to produce as sustainably as possible. Recently, there have been quite a few incidents with irresponsible use of crop protection products. Stricter legislation will separate the wheat from the chaff in future. In short, we believe that the companies that build their enterprise along the lines of modern-day commercial greenhouse grower, will eventually be the winners that are able to weather this storm.”