Indoor Agriculture Trends for 2020
January 7, 2020
A conversation with RII’s Derek Smith
BY MADDIE SLIGH, D+R INTERNATIONAL
Indoor agriculture is no longer the plot of a Sci-Fi movie. Thanks to technological developments, growing consumer demand for locally sourced produce, and expanding legalization of cannabis, cultivation of all kinds of crops is shifting indoors. According to Mordor Intelligence, the global indoor farming market is expected to see a compound annual growth rate of 7.5% between now and 2024. The global cannabis market alone is expected to experience a compound annual growth rate of 14.5% during this same time period. With the industry poised for a transformative year, the D+R International team checked in with Derek Smith, Executive Director of Resource Innovation Institute (RII), to get his insights on indoor agriculture trends that we can expect to see in 2020.
What are the biggest trends you see impacting the indoor agriculture industry this year?
For the cannabis industry, you can expect shifts in production as the market globalizes. Currently, US-grown cannabis cannot be transported across state lines or exported internationally. Yet, several countries are opening their markets for international trade in an effort to serve growing global demand for CBD and THC. As a result, we are beginning to see shifts in production to lower cost regions of the world where sunlight is more consistent throughout the year.
For both cannabis and CEA, we will continue to see a pivot toward greenhouse operations, allowing cultivators to generate more harvests and to minimize electric lighting by capturing as much sunlight as possible. At the same time, greenhouses will become more sophisticated. This will stem from innovations such as continued automation HVAC systems and more research into light recipes for different crops. Under pressure from investors, grow facilities will need to be optimized in order to achieve efficient production and quality.
What policy developments will have the biggest impact on the industry?
In 2019 we saw states begin to replicate a policy approach addressing the energy and carbon concerns of cannabis cultivation, and we expect this to continue. For example, Massachusetts led the way in policy development and Illinois closely followed. Policy is tackling new subjects, such as setting photon efficacy targets, as well as contemplating incentives for renewables and education on best practices. RII’s policy templates are guiding this state by state adoption.
We will also see an expansion in this policy adoption. As we are seeing in California, where codes are being proposed for all forms of “controlled environment horticulture,” this template will expand beyond cannabis to CEA broadly. Likewise, we will begin to see policy adoption in other countries.
What is something that could shake up the status quo that people should be aware of?
Consolidation is happening everywhere you look. It is happening in cannabis and it appears poised to be happening in the horticultural lighting market as well.
What advice do you have for policymakers hoping to connect with the market?
Reach out to RII. As a non-profit organization with a conservation mission, that’s what we’re here for. RII supports policymakers in writing good policy that will help them achieve their desired outcomes, from energy and carbon reductions to tax stability.
What advice do you have for market actors hoping to connect with policymakers?
RII is facilitating a working group to connect market actors and policymakers. This will be an effective and streamlined way to achieve this goal. Currently, very few companies in CEA have a government relations person or department. Yet, policy will directly impact their future business.
We are in touch with 18 state governments writing legislation right now, and energy and carbon concerns represent very pertinent issues. There is a need to align on language, metrics and standards, and we need more data to drive effective decision-making. It is important to get involved.
As you can see, there are many changes that we can look forward to in the indoor agriculture industry in 2020. Visit RII’s website, www.resourceinnovation.org, for more resources and information. Join RII and sector leaders at the Indoor Agriculture Energy Solutions Conference (IAES Conference) to discuss and elevate innovative solutions that accelerate an energy-efficient and low-carbon future for controlled environment agriculture. The IAES Conference will be held on February 24-26, 2020 in La Jolla, CA. For more information on registration, visit www.iaesconference.com.