Portland, Oregon played host to the INDO EXPO August 5-6 at the Portland Expo Center on the Columbia River. Ray and Josh were there to show CO2Meter’s line of sensors, grow controllers, safety alarms, and personal safety alarms to thousands of local and national indoor growing businesses and direct customers.
While the majority of the attendees were local and regional, some traffic was national and even international. Quite a few Canadians even slipped across the boarder and stopped by to inquire about CO2 monitoring and detection.
The INDO EXPO is split into two separate days: the first day is strictly for business-to-business interactions while the second day is open to the public. By having separate days, as exhibitors we had more time on the first day to have business conversations without interruption, while on the second day we could focus our time on the public searching for ways to improve their growing systems.
The Grow Show
As we regularly attend expos like this, one of the things we noticed is that there is little in the way of technology advancements in the actual growing of cannabis. While manufacturer’s signs said “new and improved” the reality is that this portion of the industry focused on the small grower seems to have settled into a period of technological stagnation. Small grow room lighting, air handling, cooling, cultivation, and packaging seems to have reached a plateau over the last 18-24 months leaving growers craving for “the next big thing” to either increase their yields or to move their businesses forward. Whether or not this vacuum will or can be filled remains to be seen. But over time, the continued expansion of legal, medical and recreational marijuana will encourage advancements to keep up with volume expectations.
One note coming out of Portland was the number of other “grow shows” that solicited us to exhibit at their local trade show or expo. The industry is fragmented when it comes to consistency, uniformity, and general business approaches and practices.
(Like any new industry, it's helpful to remember that there were 1,800 automobile manufacturers in the United States between 1896 to 1930. The cannabis industry is a lot like that).
On one hand, the fragmentation makes sense. This industry was born out of a small grower, counter-culture movement which is catered to by local shows. However, the need for dozens of similar Expos like the one in Portland does not exist, except perhaps for the growers who cannot afford to travel.
Until the industry consolidates in the way more mature industries have, show organizers will continue to host events as long as they can get exhibitors to pay for them. Likely, it will be the exhibitors that eventually guide the “grow show” industry to consolidation.
In our segment of the market we noticed that there weren’t many grow controllers on display. Our guess is that the small number of CO2 control manufacturers who dominate the market don’t feel it’s important to be at smaller shows. Instead, they rely on the big catalog companies to display and promote their products.
While cost-conscious consumers will always gravitate to the lowest cost alternative, we see increasing demand for functionality and reliability in the small grower market. Building a controller that has all three (that’s our RAD-0501 by the way) seems to be winning over many new users. The days of pushing old technology with a brand name are over.
On a personal level, one of the highlights of the show was the regular stream of people that stopped by the booth only to comment on their experience with our products. Statements like “I love your grow controller” were met with responses from Ray like “Can you say that louder please!” Word of mouth from satisfied customers and great online reviews are our best marketing tools. Keep them coming.
The Vaping Industry
One of the largest group of exhibitors in Portland was the vaping industry. With about 10 vape companies’ on-hand, this “grow show” had a vaping flare to it. It was interesting to note that each of the vape companies were experimenting with different form factors, technology and product designs. This industry is on the move.
Why the connection between marijuana and vaping? We believe that in the end vaping will be the preferred delivery method for smoking the plant. On paper at least, both vaping cannabis oils and edibles provide clean and safe delivery of measurable doses of the active ingredients in cannabis.
The one hurdle the vaping industry has yet to face is government regulation. Discussions with vape exhibitors make it clear that they all understand their window of unlimited growth opportunity may be closing. Even though some early studies show vaping is less harmful than tobacco, the US government has put them on notice that vaping will undergo regulatory changes as early as 2021.
The other conversations surrounded brand consolidation in the vaping industry as larger players like cigarette companies look to dominate the space through acquisition rather than innovation. It will be interesting to watch if both the vaping and the cannabis growing industries will weather the consolidation trend we’re also noticing in the brewing industry. Like craft brewers, the odds are not in their favor.
Greenhouse Construction & Automation
One striking change we did see at the show was the number of construction companies that are ready to build enormous greenhouses to grow plants on an industrial scale. In addition to putting up the physical building, they bring in HVAC, power, plumbing and professional construction management teams to complete the project. A few of them are purchasing sensors and other components from us to help automate the industrial HVAC systems.
Speaking of automation, trimmer machines were everywhere. Finding experienced trimmers (the people who cut the buds from the stems) is becoming a problem. As a result, labor costs are rising. One company was renting the trimming machines as some operations do not have a year-round harvest and production system.
One new market we saw was, for lack of a better name, the "extractors." This has become a sub-industry where plants are purchased from a number of growers, the cannabis oil is extracted by chemists, and the extract is sold to retailers or used in consumables. This new industry is getting attention from the USDA (United States Department of Agriculture) as ingredients for edibles falls under their jurisdiction.
In addition to the showcase of products, the Expo offered over two dozen educational seminars. Every part of the grow business - from regulation and grow mediums to packaging and distribution opportunities – were discussed. Attendees could walk away with all the knowledge necessary to operate a successful grow operation, the physical tools to create the operation, and the connections to market and sell their products. In this regard, Portland’s INDO EXPO was a one-stop shop for someone looking to turn their “hobby” into a business.
However, not all attendees were impressed. In the booth, some of them remarked that much of the information in the educational sessions was basic or rudimentary. We’ve found that this is a typical reaction when you blend novices and experts together. One group feels like they are getting stale information while the other feels like they're drinking from a fire hose. Even shows that segment the sessions by skill level (novice, intermediate, expert) run into these same issues. Again, more growing pains (pun intended).
Our only complaint was that the educational sessions ran concurrently with the trade show which drove “traffic” for both down. Bigger, more established Expos don’t do this: they hold the educational sessions early in the morning and start the trade show later in the day.
We came back from Portland with a list of projects for our engineering team to work on. Monitoring and enrichment control in the grow environment is only one phase of the process that CO2Meter can assist with. Processing, storage, and packaging are all areas our team is going to research to see if there are additional unmet needs we can fill.
For example, we already have worked with clients to use CO2 to eliminate pests. Another opportunity is that several factory farms we spoke with are transitioning away from gas-flame CO2 generators to bulk CO2 storage tanks to mitigate problems with heat and air-born pollutants from the gas. Along with bulk CO2 storage indoors comes personal safety issues and OSHA guidelines that will have to be addressed by the growers. We’re already asking them how we can help.
While our CO2Meter team will be exhibiting at the MJ Biz Con at the Las Vegas Convention Center November 15-17 we are also considering the Denver INDO EXPO in January 2018 as a follow up to Portland.
The indoor growing market continues to expand and CO2Meter intends to service it with quality, cost-effective devices to maximize growth while minimizing lethal exposure and cost.