As the seemingly inexorable marijuana boom continues to sweep the nation, growers, regulators and the like are going through growing pains to cope with challenges facing the industry. Hot button concerns today include rising energy consumption on an already strained national electric grid and, subsequently, the environmental impact of emissions as meters turn at a frantic pace for indoor growers. Several companies are aligning to address needs to help growers control costs and in some cases meet new mandates on energy use, such as Growlife, Inc. (OTC: PHOT), with its diversified offerings for commercial and urban operations, Surna, Inc. (OTC: SRNA), a leader in climate control with its efficient HVAC units, and Heliospectra (OTC: HLSPY)(NASDAQ OMX (Sweden): HELIO), a newcomer to the US markets worthy of a much closer look due to their disruptive, plug-and-play lighting technology.
Energy consumption is not a new issue for the marijuana industry, but it has fallen firmly under the spotlight with 23 states now legalizing pot in some form, including Washington, Colorado, Alaska, Oregon (legal later in 2015) and now Washington, D.C. allowing recreational marijuana use. The cannabis industry investment and research firm ArcView Group says that legal marijuana is the fastest growing industry in the U.S., expanding 74% last year to $2.7 billion. Already commanding a large energy draw (up to 1/3 of total energy use by a commercial grower and 1% of total electricity in the U.S.), the more marijuana being consumed, the greater the electricity demand, exacerbating the problem. As discussed in a 2011 report (updated in 2012) by energy and environmental systems analyst Evans Mills, PhD, “cannabis production results in energy expenditures of $6 billion each year--6-times that of the entire U.S. pharmaceutical industry--with electricity use equivalent to that of 2 million average U.S. homes.”
Heliospectra is a plant research sciences company founded in Sweden in 2006 to provide cutting-edge LED lighting solutions for researchers, greenhouse growers and agrotech companies. Heliospectra products are far more than just an energy efficient light; they are patented biofeedback systems of intelligent, LED-based lighting that reduces heat, cuts electricity use by 50% and include software to provide the highest level of control. They are the product of years of R&D built upon Heliospectra’s deep knowledge of plant physiology and photosynthesis, in short, “what plants want.” Employing the system means users can remotely configure and monitor functions of individual lamps, including varying light across the spectrum to influence grow patterns, effectively speeding them up or slowing them down in a demonstration of the ultimate control of a cultivation environment.
With its greenhouse and indoor products commercialized from its Swedish headquarters, Heliospectra brought its award-winning technology to North America last year, opening an office in San Francisco to capitalize on the unmet need for highly efficient, controllable lighting solutions for commercial indoor and greenhouse growers. The company has a global focus and a client list that already includes the German Space Agency, the University of Minnesota, University of Akron Research Foundation, MIT Media Lab, Google and several agrotech companies. In January, the company announced an order valued at 1,000,000 Swedish Krona (US$120,000) for its LX60 systems from an undisclosed Seattle-based grower.
As growers transition from legacy lighting like high intensity diode (HID) and high-pressure sodium (HPS) lamps, for economic and environmental benefits, Heliospectra is aligned for rapid adoption of their superior technology.
The shift in the nascent marijuana industry dovetails with Heliospectra’s established markets in the indoor agricultural industry, where demand is expected to escalate going forward with nearly a 10-fold jump in market size for LED grow light modules. A Cohen Grassroots Research report sheds light this aspect of the growth potential for Heliospectra, citing the World Health Organization’s projection that by 2050, the world population is approximately 9 billion, while 80 percent of arable land is already in use. Given scarce natural resources, indoor farming will have a central role in ensuring adequate, nutrient-rich food for an expanding global population. Echoing that sentiment, Heliospectra CEO Staffan Hillberg commented in a February 19 press release announcing the engagement of Viridian Capital & Research, “…the United Nations' Food and Agriculture Organization predicts that in time global food production will need to increase by 70 percent. Heliospectra's lighting system is centered around its ability to understand plant characteristics/needs and modify lighting, to fast track growth in an optimized manner.” In that vein, the benefits of Heliospectra systems will play a role in meeting demand for efficient food production worldwide.
According to an article on Marijuana Investor News, growers can recognize an immediate ROI with Heliospectra’s system. Doreen Bomar, co-owner of Spotted Owl Organics in Seattle, reported a 60% reduction in electricity to operate Heliospectra’s LED lights compared to their old HPS lamps. Moreover, Bomar noted, “Cooling costs are significantly reduced as well because the lamps don’t generate as much heat.” This is an important factor considering that traditional lights generate so much thermal energy that cooling units are needed to lower the room temperature, further lending to energy consumption and expenses.
In this exclusive interview with Cannabis Financial Network, Chris Walker, General Manager of Operations at Heliospectra, explains how the advanced design of the company’s lighting unit utilizes ductwork to manipulate air and control heat in the growing environment.
CannabisFN Executive Interview | Heliospectra AB / NASDAQ OMX: HELIO / OTCQB: HLSPY | Chris Walker, GM of Operations from TDM Financial.
The utility savings are the top-level competitive advantage of Heliospectra’s systems, but the roots stretch far deeper less conspicuously to deliver return on investment. Heliospectra has pinpointed the optics, or intensity of light, before anyone else in the market, meaning that light reaches deep inside the plant. Underscored by the controllability of the software, growers can develop their own lighting “recipes” and adjust the light spectrum to maximize quality while shortening the flowering period. This equates to the potential to shave days off a growing cycle and ultimately result in a whole extra crop yield in a year for the grower, which can provide a financial return that parallels savings on utilities, depending on the size of the operation. Of course, this article mostly discusses the opportunity at hand as it pertains to the marijuana industry, but it should not be overlooked that Heliospectra’s technology also applies to any plant species in farming and agriculture applications. As noted in the aforementioned Cohen report, the LED grow light modules market for commercial grow greenhouses is expected to expand from $395 million in 2013 to $3.6 billion by 2020. Couple that with ArcView’s forecasts that the medicinal marijuana market alone will grow from $2.34 billion in 2014 to $10.2 billion in 2017 and Heliospectra’s unique position and growth potential becomes quite evident to boost growers top and bottom lines while reducing their carbon footprint.
For more information, visit the company’s profile at http://www.cannabisfn.com/mdc/heliospectra-ab/
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