HVAC’s Growing Role in the Marijuana Industry

Marijuana grow facilities are providing a new market for contractors and manufacturers

NORTHERN LIGHTS: As more and more states loosen their medicinal and recreational marijuana laws, HVAC contractors are finding opportunities in the ventilation and moisture control aspects of these facilities. The extensive HVAC work inside of the marijuana grow facility shown here was completed by Spokane, Washington-based R&R Heating.

SEAL AND CONTAIN: Air handlers, like the one seen here from Surna Inc., are used to seal an indoor garden environment, contain odors, prevent the introduction of pests and pathogens, and more easily maintain room CO2 levels.

DEHUMIDIFICATION MATTERS: Proper dehumidification is an integral part of the cultivation process within marijuana grow facilities. Equipment must be able to maintain humidity levels 24 hours a day and prevent mold growth that can occur when humidity rises.

Medicinal and recreational marijuana laws are loosening across the U.S. as more and more communities and states consider legalization.

Twenty-nine states currently have laws legalizing marijuana for medicinal purposes with an additional eight permitting recreational use of cannabis, including the District of Columbia.

Grow facilities for marijuana plants are relatively unique, and most are a far cry from the dark and damp basements typically featured on television and in the movies. These hydroponic facilities have HVAC-specific needs, and industry professionals are prepared to meet this market’s untapped potential.

“You cannot cultivate without properly managing the environment,” said Brandy Keen, vice president of sales, Surna Inc. “The question should really be, ‘How many new grow facilities are coming online and what are their HVAC demands?’ You can do research on a state-by-state basis to determine how many new cultivation licenses are awarded. But, anecdotally, an average-size system two years ago would have been 30-50 ton. Now, an average size system is 80-150 ton, and in some states we’re doing systems in excess of 600 ton.”

Dave Meadows, director of industry, standards, and technology, Stulz Air Technology Systems Inc., said the demand for marijuana-related HVAC equipment is booming.

“We have supplied equipment for five industrial grow facilities, and we have nine active proposals out there for consideration. I received a new RFI [request for information] just this morning,” he said. “We don’t feel like we’re seeing all of the available opportunities, because nobody really knows how to do this as an engineer. Most of us are new to it.”

Randy Hastings, president of R&R Heating & Air Conditioning in Spokane, Washington, believes the demand for design and installation of hydroponic facilities may start slowing down, but the service side is picking up.

“As growers come out of their basements and get capital, they are trying to do it all themselves. The ones with capital — those operating as real businesses — are spending money to have service done for repairs and maintenance. The service side is going to pick up.”

Additionally, Hastings said there is an exceptional opportunity for maintenance agreements with these facilities.

“Owners of facilities who are just getting going and getting a cash flow started will do maintenance agreements,” he said. “Some just want to go until the equipment breaks because it can be unstable. Ninety percent of individuals running facilities aren’t business minded, but the 10 percent who are taking it on as a business understand what needs to be done.”

WHAT’S POPULAR

Cooling and dehumidification are major components of hydroponic facilities.

“We focus on three things — efficiency, operability, and budget — and design systems around the client’s specific needs relating to these key factors,” said Keen. “We have certain custom-designed, proprietary product lines for the unique demands of cultivation environments that are manufactured at our plant. We also have strategic relationships with other manufacturers that can provide certain components that are complementary to our internal product lines.”

Meadows said the real challenge is to provide HVAC units that can meet the high sensible heat loads that are present during the lights-on periods. These systems also need to be able to provide high levels of latent cooling as the plants transpire.

“[Facility owners] are looking to control other aspects of their grow facilities through the HVAC equipment, such as CO2 content and room pressurization, to prevent pollen contamination,” he said. “Rodi water treatment systems are prevalent for treating the feed water for the plants, and ultrasonic humidification seems to be the go-to technology in extremely dry environments that may need some humidification during the winter months. Ultrasonic humidification systems do not deposit any contaminates on the plants and use much less energy. Growers are looking for high-efficiency HVAC units, as the whole grow process is very energy-intensive. In some locations, waterside economizers may reduce growers’ total energy costs.”

Meadows is also seeing a shift toward indoor industrial growing and has not seen a single greenhouse-type facility to date.

“We are seeing people evaluating hydroponic and aeroponic operations as well as the traditional plants-in-the-dirt method,” he said. “The implementation of some of these nontraditional grow methods has changed the dehumidification requirements of the HVAC equipment. We are also seeing an adoption of LED lighting systems that considerably reduce the sensible heat loads.”

Kyle Littleton, service technician, Fort Collins Heating and Air Conditioning in Fort Collins, Colorado, sees it differently, saying there are a couple larger names that are going to in-house service people for their HVAC needs. “The largest grower I know has 10 15-ton rooftop units,” he said. “I personally think the HVAC side of this is on a downward stroke. I have a mentor who is involved in all sorts of different things, and we spent a year looking at the economies of scale, LED lighting, etc. As the market evolves, HVAC will become a smaller piece of
the puzzle.”

Littleton reasons that the guys who are booming today knew in the beginning it was a risky endeavor, and they took that risk. “There weren’t many federal mandates or anything like that,” he continued. “Other than the lawfulness, there is nothing special about it. I can tell you the companies that do specialized greenhouse equipment are going to end up ruling the industry. The product itself is becoming a commodity.”

CONTRACTOR ACCEPTANCE

One of the biggest keys to the success of these operations is having skilled contractors who are both capable and willing to service them. There is still some pushback across the country to legalized marijuana, as evidenced by how close some of the ballot initiatives have been in recent years. Contractors, nationwide, have also expressed mixed opinions on the market.

“[There are] no demands here in New York, and I hope we can keep it that way,” said Julian Bamfield, a journeyman contractor in New York City. “It’s not a market we should be targeting. If we do, we’re going to be a part of the problem with the kids on drugs today, so I’m going to say no to that market.”

While some contractors expressed hesitancy and displeasure with marijuana facilities similar to that of Bamfield, others see tremendous growth potential.

“I have spoken to quite a few HVAC people in New York City and New York state who are ready to invest in the industry [anywhere] once it is legalized,” said Eric Seifert, executive director of business development, North America, SF&P Advisors. “This will be a huge growth opportunity for the HVAC and plumbing industries, not to mention the overall economic boost and much needed tax revenues it will provide. There’s a myriad of data showing tens of thousands of annual teen [and adult] deaths by alcohol, prescription drugs, and automobiles, but we’d be hard-pressed to find any HVAC or construction companies that refuse to build auto factories/showrooms, pharmaceutical manufacturing plants, or big-beer brewing facilities as a result of these far-greater consequences of these legal products.”

Charles Cooke, professor and program coordinator at Kankakee Community College in Kankakee, Illinois, said if a legal business calls and asks him to install of service a heating or cooling system for its business, he sees no problem doing so. “I once worked for someone who wouldn’t work for any bar because he didn’t want his vehicles seen in front of any bar. He thought it may hurt his family business in the community where he lived and worked. That was his choice as the owner. If the business is legal, it is just another space that will need a heating, cooling, or ventilating system to me.”

Similarly, Levi Wallace, owner of All in One Home Repair in Dallas, said there are no demands in his area, but he would be fine working on such a facility. “I would be interested in knowing what the HVAC requirements are, and I would welcome the opportunity to further grow my experience, skills, and knowledge in any new area that has a demand for heating or cooling.”

Robin Boyd, HVAC advisor and consultant at H-VAC Consulting in Willow Street, Pennsylvania, sees the avoidance of this type of work as treacherous territory. “I have not heard of any HVAC work being done on such facilities,” he said. “As I see it, learning about any special needs for these types of facilities would benefit any HVAC company to target and become the expert on. If we are going to allow politics to dictate the types of jobs we take, we could be shooting ourselves in the foot financially. That could lead to not wanting to do work for gun stores, target ranges, or NRA [National Rifle Association] facilities. It’s a slippery slope.”

WHAT’S NEXT

As legalization continues nationwide, contractors and manufacturers must be acutely aware of what is happening in the marijuana industry and ponder whether or not it can continue expanding at its current rate.

“The demand is not going away,” said Hastings. “We are limited in Washington to how many people can grow per city or county. It’s all based on the laws the state puts into place. A few owners are getting more capital and expanding and experiencing more HVAC demand. When the state sees how much money is coming in, the laws may change and further expansion may occur.”

Littleton said the opposite has been true in his experience in Colorado, because the state does not have a lot of midsize HVAC contractors, and there is no statewide licensing. “It is mostly three- to five-man shops,” he said. “Those guys have a bigger taste for risk. A lot of the marijuana growers used to do it illegally, but now that it is legal, they still use their backward methods to grow because they’ve worked. They don’t want professionals coming in because they don’t want to pay for that. They just want a guy they know to do the job.”

“Early on, the industry mostly operated on a cash-only basis, which caused some people concern about getting paid for their work, but this has changed as the U.S. Department of Treasury has established legal guidelines for banks and credit unions to work with growers in states where medical cannabis is legal,” said Meadows. “The market will continue to expand as more states legalize medical and recreational cannabis. As each state’s market reaches saturation, the demand will plateau. Once these places get established, it won’t have the upward trajectory it currently does.”

Publication date: 11/21/2016

Cold Craft, Inc. has assisted growers with indoor environments for their produce.  Each crop has its own challenges including temperature, humidity, disease, and pests.  For assistance with your indoor crop call Cold Craft, Inc. at 408.374.7292. Or visit us at www.coldcraft.com .

 

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