Cannabis has been touted as the next big money-spinner in agriculture, with many farmers looking for a way to cash in on this market. Producing medical cannabis, however, presents a number of hurdles, of which infrastructural cost and operating expenditure are probably the most daunting.
Michael Holmes, CEO of medical cannabis producer Neopharm, which is currently producing its first crop, says the first phase of his company’s investment in a 400m² production and processing facility the Cape Winelands cost close to R70 million. This was a staggering 200% more than they had envisaged.
He identifies security costs as one of the biggest drivers of unforeseen expenses. “We had to fence in the facility and establish secure access control points. We invested in more than 80 security cameras and other technologies to enable the monitoring of activities in every single corner of the facility. The recorded activities are logged and stored for future reference.” Operating costs are also exorbitant. Holmes explains that cannabis not only requires the right volumes of the right nutrients at the right time, but production is also greatly influenced by climatic conditions and light.
“Production needs to be climate-controlled to ensure a repeatable, standardised, high-quality end product. This significantly increases electricity costs and forces farmers to invest in backup energy sources to alleviate the impact of load-shedding.”
Aside from this, staff need to be employed to secure the facility and oversee production long before any income is generated from the crop.
This story is from the January 28, 2022 edition of Farmer's Weekly.
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This story is from the January 28, 2022 edition of Farmer's Weekly.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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