 Ladies and gentlemen, welcome. Thank you for coming before we talk from Alex Babich and Adrian Logan. Thank you. Hi, everyone. I'm Alex Babich and this is my partner Adrian Logan, my business partner. And today we're going to be giving you a brief introduction into hydroponic systems in commercial facilities. So before we start, we'll tell you a little bit about ourselves. Our company is called Neurovine. We're based out of New York City. We're a startup been around for about a year and a half. And we're coming out with our first product. It's a automated nutrient dosing data collection machine and has a web application. But don't worry, we're not here to like sell you anything. Just kind of tell you a little bit about ourselves. So one of our last things we went into in terms of like our startup was like a little accelerator called the ICOR from the National Science Foundation. It's where they give engineers and scientists money to go travel around the United States and do customer discovery. And so for us, we went out and visited cannabis farms all over the country. In Washington, Oregon, California, of course, Nevada as well. And so some of these interviews were super insightful for us. So we wanted to share with you a little bit about what we learned and teach you a bit about hydroponics. So to get started about hydroponics, we're going to first start by talking about soil, which most people are familiar with. So first of all, soil provides a medium for the roots to grow into so the plant can stay upright, of course. Then we also, the soil also provides a lot of different nutrients the plant needs. The nitrogen, phosphorus, potassium, calcium, magnesium, many other things that helps the plant actually grow to its full size. And finally, soil provides a medium where water can be held so that the plants can drink, especially if there's no rain, because the plants always need a supply of water. So let's contrast that with what hydroponics is. It's really not so different. So first of all, you need some sort of a medium. So there's many different types of mediums. So if you look here on the left, this is something called rock wool, which is kind of like cotton candy that's made out of rock. And on the right, we have cocoa core, so it's made out of coconut husks. And both of these mediums are pretty good for holding water. So if you're not watering all the time, then the plants will be able to survive for a couple of hours. Over here, these are some different types of mediums. These are in the bottom corner is grow stones, which are a little bit like rocks except a little bit lighter weight. And then we also have clay pebbles on the top. These mediums, they provide structure for the plant, but they don't actually hold very much water. So you're going to need to give these plants a constant supply of water. So just looking at this in a very, very, very basic hydroponic system, you see this is something like clay pebbles. And they're held in what's called a net cup. So you can imagine a net that has holes in it so that the roots can eventually get out of the cup and get into the water so that they can drink. And then the final aspect of hydroponics is the nutrients, right? So because you have these inert substances, you have water, the plants really need nutrients in order to grow. So to get nutrients, you just got to go to some hydroponics store and you'll see all these funky looking bottles. There's sometimes they come in single varieties. Sometimes you have to have like multiple different solutions to feed the plants. Also during different stages of growth, the plants need different nutrients. So for cannabis, like you have the vegetative stage, which is where the plant is growing to its full size, growing all its leaves, and then you have the flowering stage where the plant is actually growing all of its buds. So you can imagine during these different stages of growth, you're going to have different nutritional needs, which is why you'll need different nutrients. So why would anyone use hydroponics over soil? It seems a little bit complicated, but one of the main factors is that you can actually increase your yields by about 25% if you're doing it correctly. Another factor is that you can grow the plants about 30% faster. Again, this is if you're doing things properly, of course. So why is it like this? Well, if you see like on the right side, you have the plant in soil, and you see the roots are trying to find a place to grow into. So that takes a lot of energy for the roots to grow into. So if it didn't have to use that energy, it could use the energy to grow up instead. So if you see on the left, you see this mass of roots because it's just roots that are growing in water. So for them to grow, they don't have to expend so much energy. And so just kind of a rule of thumb is like the larger the roots you have, the larger the plant. So if you allow your roots to get very large, you're going to have a much larger plant. Another thing is that when you're feeding plants in soil, you're actually going to be feeding these microorganisms in the soil, which will in turn feed the roots of the plants. So with hydroponics, you're using these sometimes inorganic nutrient salts, which go directly to the roots of the plants. So you're skipping one stage of the process, which again allows things to move a little bit more quickly. And then finally, for us and a lot of guys that are doing hydroponics, it's really good because you have so much control over everything. You can always, you can change the nutrient levels on the fly. You can change the pH on the fly. So when you have a lot of experience, it can really help you dial in your environment and really get the most out of your plants. So of course, there's still some reasons to use dirt. If you look at the photo on the left, we just have a plant sitting in dirt, and that's pretty basic. You just plant the seeds and the dirt and let it grow. Of course, you need some light. And then of course, on the right side, you have this very complicated hydroponic system. So already have complexity just to get it set up. And in this case, the system needs a pump in order to work, and the water is constantly running through it. So if you have the pump fails or anything like that, there's a good chance that your crops can die. So you're definitely going to have some complexity there. And then another pretty big factor is that soil typically gives a better flavor for the cannabis plants because there's just a full spectrum of nutrients in the soil. Of course, there's a lot of things in there that we know what they are, different types of fungal organisms, lots of nutrients. There's also a lot of things that we don't know what's in the soil. So when we're trying to create hydroponic nutrients, we're only putting certain different nutrient salts in there. So there's going to be some things that are missing. However, people are figuring out how to make them as close to soil as possible. And also, it's not necessarily hydroponics. For hydroponics, you can use organic nutrients, which are made of organic materials, but that also adds some challenges because they can be a little bit messier and can cause more clogging in the different systems. All right, so next we're going to start off kind of explaining a few commercial systems that we've seen in facilities that we've visited. Sorry. Technical difficulty. So this is a drain to waste dripper system. This is one of the most common systems that we've seen in visiting commercial facilities. It's a relatively low complexity system, and we're also able to grow a lot of smaller plants rather than growing kind of a smaller number of large plants. And so if we look kind of at the system here, it's characterized by you'll have some sort of reservoir or source of water that will be distributed to drippers that are connected to the top of rock wool cubes or you could also use different mediums. And the drippers will be put on timers and they will give off a nutrient solution over the set interval and then any excess water will run through the rock wool cube and then run down a leach tray into a drainage system or drainage reservoir. Here's an example of a farm we visited in California in Los Angeles. This is room one of nine. They do them in kind of different batches and then they have a central nutrient mixing and reservoir system in a different room and they'll be pumping those nutrients into the different rooms. Here you can see that they have a large number of plants on, looks like, five trays and these trays actually, they're rolling trays so that you can have one aisle away and then you don't have to waste many hundreds more square feet in a commercial facility and this is a very important factor because it really helps reduce the cost of maintaining the environments. And here you can also see on the top of each of these rock wool cubes there's kind of a green little kind of plastic attachment and that distributes the water from the drippers across the rock wool cube more evenly and then from these leach trays they'll go down into a central collection system and here we actually have another facility. This facility is a little bit different. They're actually a vertical cannabis farm and they're in Colorado and so what's really cool about these systems is they can go between six and I think 12 to 13 levels and the lights are actually in between so that they get side lighting and the plants kind of grow towards the side. Again we see that we have movable racks to save the square footage in the facility and also to help kind of space the lights between the plants. There are drippers that go into each of these blue buckets and then at the bottom of each bucket again they're being drained to a central waste and actually this facility goes directly into the municipal sewer. A lot of facilities, water consumption for these drained waste systems may be a little bit higher especially if you don't have your timing and everything set correctly. So water usage can become an issue especially if states like California maybe or is implementing new regulations where you can't dump these nutrient solutions into the municipal sewers and then you have to pay for transportation and offsite treatment. You're already wasting nutrients and water that you probably had to pay for so there's a bit of waste in this type of system especially if you're not using a control system that's properly dialed in. Another thing that's a potential hazard to watch out for in kind of systems like this this facility uses a centralized inline nutrient mixing system so basically what this means as they're pumping the water through the line they're adding the nutrients directly into that and it gets directly pumped right to the plants. Usually that's nice, you don't have the central reservoir although if somebody makes a mistake you can see millions of dollars worth of product killed in the matter of hours due to this problem and there's not too much you can do about it though these are in a medium that usually can hold some amount of water so you have a little bit of a buffering if you have a pump system that goes down or something like that. Next we have a recirculating deep water culture system these are a slightly higher complexity, harder to use they're also somewhat more significantly expensive to set up but what you're really able to do with systems like these is grow a smaller number of really, really big trees like really big cannabis plants there's the farms that we visited they grow up to like maybe eight, nine feet tall at least I mean they're just beautiful it's crazy and so really how we're able to do this is each plant is sitting in a bucket and you'll have a net pot that just has like those clay pebbles or those kind of grow stones that just give a good amount of support to the plant and then the roots just grow right into this bucket which has a large amount of water that's being recirculated kind of through the system so each bucket is connected in series and then there's also a controller bucket that is generally attached so that you can take measurements on the system and also centrally add nutrients and correct for the pH in the water and since this is being rapidly recirculated through the system you can have a generally uniform nutrient profile across the system and so let's move here so this is a facility we visited in Rhode Island they're a medical facility and right here in the center you can see the main control bucket and that's attached to 24 plants and then also right to the left of that you can see a water chiller it's important to keep the water temperature sometimes like around 5-10 degrees cooler than the ambient air temperature and so here these trees aren't at full maturity but you can see that they're a bit larger than the previous plants before but you're also definitely limited when it comes to kind of setup because these buckets they have to be very sturdy and the plumbing is a little bit harder to set up than just these kind of little lines going to the tops of more or less normal buckets these systems also cleanliness is extremely important so that's why this facility you can see is very whitewashed and it has very clean floors and stuff like that so this generally farms that we visited that are dirtier have a lot of problems and then farms that are kind of cleaner and they have higher standards they're able to keep pests and other diseases away from the plants and yeah next we have a nutrient film technique system this is generally actually not used for cannabis we haven't seen it but it's still kind of important I think to show you that they're just kind of there are a million different ways that you can set up a hydroponic system with these basic kind of core principles again here we have a more or less central reservoir also in here we have an air stone so for these recirculating systems they use less water but we also have to make sure that we're maintaining the nutrient pH and oxygen levels in the water so the air stones will be bubbling generally regular air or sometimes people will just use regulators and pump straight oxygen into the system this is actually to kind of feed some of the microbial life that you will see in a hydroponic system so for nutrient film technique system you'll again have a water pump that will pump to the top of a channel and then this is at a slight incline so that or decline so that the water will sort of run in a thin film down this channel and then the smaller plants will have their roots they're in kind of net cups again with the clay pebbles or something like that and then the roots will kind of get some of this nutrient film as it runs down and then ultimately it drains back into the central reservoir so let's look at this facility this facility is Gotham Greens they're in Brooklyn, New York they're actually on top of whole foods and kind of the nifty thing that they do here is they'll actually pick the produce, package it, bring it into whole foods and then people will buy it and it says it was picked at 115 today really fresh it tastes a lot better to have it locally and we're just seeing now that hydroponics, the cost of technology the efficiency that people are able to achieve this is becoming cost competitive with the large commercial farming especially on the leafy greens and those like spices, those basils and stuff like that it looks like this is growing a lot of basil right here in this photo and so here you can see that we have hundreds of these gutters that are just lined up and then towards the middle here on the right side you can see the nutrient lines and those will run delivering water and they run down to the center here all of these channels are angled and then they'll kind of recirculate again there these systems are kind of hard to clean again, cleanliness is important so it causes a problem to have so many channels that are hard to clean and stuff like that and especially with these recirculating systems you run the risk if you have a pathogen that gets into a system you're again feeding and recirculating to all of the plants so you do run the risk of killing basically all of the plants per system which is why they'll generally limit kind of the fates like the fates that they tie together on the plants so they'll limit it to maybe 2,000 square feet of these channels will be one reservoir and then they'll kind of like multiply that as they have a different scale so other rooftop greenhouses they're about 10,000 square feet and they had about six different systems going next up we have aeroponics which is another system generally again used for smaller leafy greens what's really great about aeroponics is one of the most water efficient systems in general and they're able to grow plants quite quickly so in the system here you'll generally have water in the bottom and a pump that'll pump up to these small misting nozzles that will mist the roots of the plants again we're getting a very nice mixture of air, nutrients and water to the root system which is highly, highly important but what you will see aeroponics is definitely used pretty commonly in cannabis just not for growing the plants it's used for starting clones and so what clones are they're clippings from what are generally referred to as mother plants or sometimes they'll clip it off of other plants in production and it'll be one kind of fan leaf with a few inches of stem they'll put it into these green collars and then they'll have this aeroponic system so on the right side you can see these green nozzles those are their aeroponic misting nozzles and they're spraying the nutrient solution and sometimes they'll also add root starting hormones to this to encourage root development on the plants and you can see pretty exciting root development very quickly on plants that you would otherwise think it's just like I just clipped this off of a plant and all of a sudden you're able to clone it very easily which is kind of an exciting idea and this is really important for commercial facilities because consistency is extremely important so this allows them to have an entire crop of genetically identical plants they'll all grow to more or less the same height and stuff like that you'll often see, if you were just cracking seeds and growing fresh, you'll have one plant kind of short not very attractive, not a lot of flower on it and then you'll have other plants, for some reason they're twice as high, they have better spacing of the flowers and stuff like that so this is one of the important things on the genetics and continuing the generations of these plants as you grow hundreds or thousands of them and so that's it for the hydroponic systems that we're going over there are a million different ways to actually set up a hydroponic system based on the core principles of a nutrient solution being somehow distributed to the plants kind of making sure that we're emulating some of the conditions and the things that are provided by soil and then there are also a lot of other environmental factors we didn't necessarily go over such as lighting which is generally interchangeable between the different ways that you do it and we thank you all for coming here and the opportunity to come and speak to you guys and we'd love to answer any questions you have Any questions? Yeah, how about aquaponics? Yeah, so aquaponics, like aquaponics that's a method of hydroponics where you have fish as a part of the system and you feed the fish in this system and then ultimately it's the experiment from the fish and you have to make sure that you have a part of the system that can with bacteria and other microbial life to process this and make the nutrients bioavailable to the plants that we don't really see it too often in cannabis it's a little bit harder to maintain because you kind of have to take care of the fish and then the plants so often on a commercial setting like the variability that you might see in the plants especially for cannabis is tougher we'll see it definitely a lot more on the leafy greens because their requirements for nutrients are a little bit less stringent I imagine that how much you'll be given for the process or do they have interesting ways to measure and optimize? Sure, so as you're trying to optimize the environment there's a lot of different things that you have to take into account so you're going to be taking into account the temperature, humidity CO2 levels, light levels that's all the things in the air you also need to make sure you keep track of the water the nutrient levels, pH, water temperature so basically you want to be collecting a lot of information also you want to have cameras taking pictures of things if you really want to get to that advanced level so that you can have all this data coming to you and then you can really see what's going on so that's kind of the next step in farming and that's farming of the future is collecting tons of data and then making small optimizations to the environment so you can see growth and comparing things in a scientific way so yeah, I think that answer your question? It definitely runs again newer farms, the one in Colorado that we showed you that was a pretty newly built farm they were relatively highly automated although a lot of the system could really stand for a lot of improvement right now a lot of the technology used in cannabis is more of a, it's kind of ported over from traditional greenhouse agriculture which is sort of stuck in the 80s or maybe the 90s rather but we definitely see that there's a lot of room right now where technology can assist in growing cannabis in particular since it is such a high value crop and there are a lot of things that we still don't know about the plants since it's been generally unstudied or understudied so I think as we move forward getting more data, getting more insight keeping track of more things we saw the farms that had better data recording practices I mean, most of the time they're using clipboards still even in kind of the relatively advanced farms so there's a lot of room for improvement but the data is a driving factor mostly there's a lot of work that the growers are doing it's mostly not computers the growers have to do lots of things they have to cut the clones they have to move the plants around they need to feed the plants take measures yes sure sure so I'll tell you a story about one of our customers so we're very new we have one customer that was our early adopter and he was spending about three hours a day maintaining his hydroponic system so that was measuring the nutrients, measuring the pH making adjustments trying to make sure that the plants were optimized so when he incorporated our automation systems which automatically feed the plants and take care of the nutrients and pH levels he said that he now instead of spending three hours a day spends about 25 minutes every 20 days on the same activity and so for him, as a researcher he's now spending more of that time reading research papers and figuring out better ways to optimize this plant so what we feel like we're doing for this example and hopefully for many others is giving them an opportunity to increase the value of their operation by doing more higher value activities you're welcome so in these farms you're not really allowed to sample it because they actually have to be sold through a dispenser or something like that however we're allowed to maybe hang out with the farmers afterwards and maybe sample some of their products so yeah I'm not even sure if all the farmers that we sampled was their products or was a product that they had yeah I'm not like a huge connoisseur so it's hard for me to tell but from what I could tell the products were pretty good when we went to one of the farms in Oregon the guy he gave us some joints and they were really cool after we got out of the farm we went because in Oregon it was this place in Hood River, Oregon so it was gorgeous scenery and everything so we went to this river really close by and smoked one of the joints and then we started thinking of all these crazy ideas so now we're gonna like help him so it's like he helped us like help him yeah we wrote him down but I gotta write him down yeah so for the most part we saw kind of the traditional highlights and stuff like that they're less expensive and the capital expenditure for setting up farms is relatively high number of the farmers that we visit including the one in Oregon they're typically experimenting with LEDs they're looking into it one farm they had one room that was using LEDs and another two rooms that were using the HIDs and stuff like that LEDs are coming it's definitely going to be a very important factor states such as Massachusetts actually have laws limiting how much electricity you can use per square foot essentially making it that LEDs are really the only real option so yeah LEDs they're great there's some things we don't fully know yet about maybe the light spectrums although there are a plethora of companies that are working on it and selling the best lights in the industry so we're excited to see it move more towards the LEDs maybe once they're a little bit less expensive to install but is there a standard after they grow a few batches like you clean out the system or what is the maintainability of these things and I'm sure it varies depending on what technique you're using but is that a standard practice or does it vary between different growers? yeah I'm sure each grower has their own way of doing it but a lot of times when you're taking the plants out of the system so sometimes it could be like two weeks four weeks when you remove the plants that's usually when they'll go ahead and clean them they're not usually going to be cleaning them like while the plants are actually in the system and it's definitely cleaning should probably be more of a constant practice rather than something that people are doing at specific intervals some of the farms we visited they don't have a speck of dust speck of water or anything on the ground and they're able to use no pesticides by just using extremely rigorous cleanliness policies some of the facilities we go into we're literally put in jumpsuits and crocs and we're spraying alcohol on the bottom of our feet and we have these little pads as we go into each room and they don't need to use any pesticides other facilities we visited they're basically they are open to the public they let people in there are rooms that they say don't go in here we just like sprayed pesticides in here like you know it's going to be a nightmare so it really runs the gamut you know of different cleanliness practices although definitely the farms that are doing it the best for the most part are doing it with rigorous cleanliness standards and that's one of the things that automation would be really good like automate certain tasks like nutrient dosing so that people can spend more time on cleaning to ensure that you know they don't have an entire room you know spider mites or something and then it costs them millions of dollars and then just to like add to that another reason for automation is so that you don't have to be constantly going in and out of the rooms and changing things all the time like humans are one of the greatest sources of contamination of the system so by having less traffic touching the plants less you're going to have less chances of having these problems yeah I also live in New York City and I build apartments in my living space cool huh I actually really curious what yours looks like but yeah we haven't I don't know I can't think of anyone on the top of my head that's mixed with you the one farm in California that we visited they had one room that was like a deep water culture room and then they had eight rooms that were the dripper systems they actually just recently shut down the deep water culture room commercially speaking they like it to be uniform just have a standard operating procedure and have it kind of more like a manufacturing process and then you'll see hobbyists and people who are doing on smaller scales they might be playing around more or even farmers who are maybe like not quite getting started but are planning to get started they might be kind of experimenting seeing what system they can handle the best are you saying did we see any small? yeah it's definitely kind of consolidating the markets in general we also visited an outdoor grower in Washington and he grows 35,000 pounds a year which is essentially unheard of for indoor growers they're like if they hit 5000 pounds that would be insane usually maybe they're around one or two thousand and this outdoor is he's the low cost producer in the state he can blow it out he can sell he sells eighths for 25 dollars to the dispensary you can have it out the door for 75 there is definitely though a space for the indoor kind of growing with hydroponics because you're able to play more with the chemical profiles and the plants and you're able to get this higher quality you'll probably see the lower end of the market get pretty much completely consolidated especially once you have a federal legalization there's no way you're going to be able to really compete with you know John Deere tractors in massive fields but you know we will probably see you know and this is kind of this is really more opinion or sort of like kind of in the ether but you'll probably see something kind of like the model of like the craft brewery like kind of would be like you have like your craft breweries you know kind of focused on quality and like you know pesticides and all that and then you know the outdoor you'll have your Budweiser's as well the outdoor grower I'm not entirely sure they have they have a permitting system based on square footage so they have permits of 30,000 square feet that they multiplied they had like a hundred permits well they had room for a hundred permits they maybe had like eight to ten permits that they were growing 35,000 pounds under and like the regulations in Washington made it extremely inefficient for them actually to do the farming because they had each 30,000 square foot plots separately staked out and so they could and they had fencing around each one of those so you can really the economies of scale as the regulations may change could really change the landscape of the lower end yes yeah I mean typically you want to use something called like a carbon filter which is just like a fan that's going to be sucking up all the air and making sure that it takes out all the different things that smell from the cannabis plant so and if you want to have like a commercial facility somewhere then you definitely need to have that because you don't want to be all that scent and if you're growing like in your house if you have like some sort of a growth tent you can set up like a small carbon filter so you can take care of that yeah pretty often states have regulations and say like once you're outside of the facility like you should not be able to small it that's not necessarily true for probably most of the facilities we've visited like when you're outside you know where you're going so yeah yes yeah so security is you know definitely a major part of these facilities mostly on the regulation side the regulations are often very stringent and explicit on what sort of security is necessary I think most of the time what we've seen is that there's a camera everywhere there's like you accept the bathroom but basically anywhere you go in many of these facilities there's a camera on you and the state has a direct link into each and every one of those cameras so there could be someone watching you in the you know tending to the plants trimming drying rooms everything cameras everywhere everywhere and California's implementing you know new regulations that have much stricter security concerns and even the outdoor there was a camera on every corner at least of these plots again someone's watching over your shoulder every step the government really wants their tax money as things become automated like I've seen grow operations with auto elevating tables business shifts to move water around to keep the level or keep everything clean there's a lot and then you look to the left and there's a massive sets of PLCs that are connected to a bunch of other bullshit somewhere else like that part is one of the things I'm curious about how are they thinking about those systems and say does the state necessarily need access to that as well because that's a whole you could ruin somebody's entire crop I'm shifting lights a little bit yeah so the state doesn't really you know the states don't care if you go out of business generally so they're really watching the people in the facilities that's what they want to make sure that every little gram I mean every leaf typically needs to be pretty much accounted for and disposed of with you know different procedures and you know again depending on the state you might be weighing the plant right when you cut it down weighing the flower that you cut off weighing the trim that you took off and stuff like that in terms of the technology the PLCs the control systems we haven't heard or seen of any integrations with the the state really besides maybe like seed to sail like tracking so they might be in kind of the inventory management systems but environmental control systems they don't care if your plants die they just care you know someone is kind of diverting something to a gray or black market do they do they throw things like that some farms are more technically sophisticated than others although we haven't seen you know too much technical sophistication in most of the facilities any other questions thank you very much alright thank you so much