The GroAdvisor team discusses modular grow room designs, including advantages, comparisons versus conventional construction, anecdotes, success stories, and more.

 

Podcast Transcription:

Announcer          0:02

You’re listening to the Greenhouse and Indoor Cultivation podcast, presented by GroAdvisor. Tune in to learn strategies to grow your business, get the most out of your cultivation systems and advance your horticulture career.

Brandon Newkirk             0:18

Hello growers and business owners, it’s Brandon and Will, your favorite podcast hosts for the controlled environment agriculture industry. So I just wanted to tell you, we’re launching a guide. If you haven’t heard yet, it’s called Best Practices for Grow Room Design. I’m really excited about it. It’s filled with expert advice from grown room design experts. Go to groadvisorworldwide.com. It’s amazing. We go deep on grow room design with our team. So if you want to know what it takes to scale your grow room operations from functional to professional, you’re going to want to get this guide. There’s already a waitlist, so join our newsletter to be one of the first to receive it. And I’ll see you there.

Brandon Newkirk             0:50

On today’s podcast we speak with Gregg Pearlstone, VP of Sales at Porta-King Building Systems. We’ll be having a conversation discussing modular grow room designs, including advantages, comparisons versus conventional stick construction, anecdotes, success stories. This Q&A style podcast is jam-packed with valuable information and I think you’re really going to enjoy this one. So stay tuned and now to the podcast.

Brandon Newkirk             1:15

So Greg, it looks like you work over at Porta-King as the VP of Sales. You’ve been in the modular grow room industry, or modular construction industry I should say, for quite a long time. And I’m sure you’ve seen the industry as it has progressed. I’d love to learn a little bit more about your background and how we’ve reached where we are today.

Gregg Pearlstone             1:36

Sure, yeah. I tell people I’ve been here for 35 years and  I get an amazed look. I don’t think anybody stays at any one place for that long. But it’s been a great place to work and it’s certainly been very interesting. And yeah, quite an evolution in the industry that I have witnessed. Interestingly enough, I went to college, got a degree in the School of Forestry, specializing in selling wood products. And now I have spent the last 35 years selling steel and aluminum.

Brandon Newkirk             2:10

Wow, a bit of a turnaround there, huh? Well, yes, both building material, so it’s in the same family.

Gregg Pearlstone             2:17

Yes. Yeah.

Brandon Newkirk             2:19

Well, it’s really a pleasure to have you on, you know, I’m looking forward to discussing. I know, modular designs have really made leaps and bounds since I’m sure when you started over at Porta-King, and why don’t you tell me a little about how the industry has evolved, how the designs have evolved, and, you know, really, why should people go modular construction over traditional stick construction?

Gregg Pearlstone             2:47

Absolutely. Well, and that’s really what it’s all about, you know, the comparison has always been to conventional construction. We accepted that challenge when we introduced the product over 50 years ago. And the idea was simple, it was going to be something that was faster, and would afford the customer the ability to move or modify the structure without any loss of the initial material investment.

Gregg Pearlstone             3:15

So when I started, it was really about just creating office space. But something interesting happened all along the way is that our customers really became the best innovators for us. They saw value in the design concept. And because of that, and because they were building all kinds of enclosures inside their facilities, they saw the opportunity to utilize the product in other ways. And so, you know, the business continued to evolve, going from beyond just housing personnel, which is still a big part of what we do, to creating environmental enclosures, primarily for manufacturing processes. And then that evolved into clean rooms, which is in part tied to manufacturing, but could also be tied into production of of all sorts of other natural items that needed to be produced in a controlled environment. And of course, then this next phase came to us through opportunities to produce programs.

Will Goodin        4:25

Thanks for being here, Gregg. This is Will Goodin, VP of Business Development with GroAdvisor. And yeah, I’m very excited to to speak with you today about modular construction, modular design. You know, having been in cannabis for several years, it’s something that I’m very familiar with. I’ve done a ton of projects that required modular construction. Could you go into kind of some of the projects you’ve done and speak to, whether it’s in cannabis or not, some of the highlights of what you guys have accomplished?

Gregg Pearlstone             5:02

Sure. It is a pretty broad base of applications. I guess just to speak to the cannabis industry specifically, we recently completed a project for a company called Hayat Labs, a full scale production. They’re actually up in Hazel Park, Michigan. We are working currently on a another smaller project. Interesting, the company is called Ancona Controls, but I think that’s the parent company. I don’t really know what the the name of the organization will be for cannabis. And then we are really just in startup of our largest project. Currently, that’s actually here in St. Louis, for a organization called Kindbio. It’s 30,000 square foot facility, it’s going to be just north of downtown. What’s interesting about it is not only are we constructing all of the different grow room applications, but we will be doing a complete build out inside to create all of their offices, their break rooms, their locker rooms, really everything that they will need to not only produce the product, but to house and support the personnel that will be working inside.

Will Goodin        6:20

That is incredible! That’s great to hear, and 30,000 square feet is definitely one of the larger type projects I’ve seen. That’s incredible. What was the experience with with Hayat labs? And in your mind, why did they decide to go modular over conventional?

Gregg Pearlstone             6:39

It was really the premise I mentioned before. It was speed to completion, you know, it’s really about getting up and growing. So that was what they wanted to do. It was a repurposed structure, so the concept worked perfectly for them. While they were doing all of the other work that they needed to to get the building – and it was an old building, I had an opportunity to tour it – to get it up and ready for construction, we were doing everything on the background, in terms of the design, creating the approval drawings, coordinating the installation process, making modifications that they deemed unnecessary once they looked at the the initial design. And then we produce the product. And so you know, the completion of their prep work came together perfectly with the the shipping of the material. The installation crew did an outstanding job taking the material and getting the installation done, really in an expedited fashion to get them up. And as I understand it, as of last week, they were beginning the grow process.

Will Goodin        7:55

Wow, that is incredible. Speaking about installation, what’s the magnitude typically that that a crew can operate? How many square feet per day could could be installed?

Gregg Pearlstone             8:09

Well, we did that analysis actually. It’s tied to this Kindbio project. I had asked the people that had put the the pricing together to do some analysis. Interestingly enough, he’s a journeyman carpenter and on occasion, we do some small drywall work. This local sales division that we operate, although we try to push everything modular, in some cases it’s just what they want, primarily for office space. And when he did the analysis, and I have it here, we took one of the rooms, which was 3200 square feet, it’s a 40×80, with a 14 foot tall panel. He was estimating for completion of that room with a three man crew would be 85 hours. So basically, two weeks to complete it.

Brandon Newkirk             9:10

Wow.

Gregg Pearlstone             9:11

We would figure for drywall, just for the walls mind you, 270 hours to complete the construction with drywall with metal studs. Obviously, it then needs to be taped. And then, because you really can’t just leave it like that, in order to complete the facility and make it adequate for growing, we figured adding a fiberglass reinforced plastic skin. And that’s how we arrived at that number. So if you do the comparison, we’re literally 31% of the time necessary to complete the exact same space.

Gregg Pearlstone             9:50

Take it a step further because that’s really just the wall panels. You can imagine if you were going to use conventional construction to create the ceiling system. The same timeframe applies for creating that square footage, you could arguably be more just because you’re working overhead as opposed to working on the ground. And for us, we would simply take a modular ceiling system and install it, instead of doing all of that conventional construction. And so I don’t have the numbers in front of me, but the completion would have been even faster. We’d like to say, with our modular system, it’s typically 50% faster than conventional construction. Time element becomes a little bit closer, is when it comes to the ceiling. You know, when you’re using a modular ceiling system, like we’ve been using for the grow rooms, that completion gets accelerated even faster.

Brandon Newkirk             10:47

That’s amazing. I’m curious how much time is it that you shaved off? What is the 70 or  69% look like?

Gregg Pearlstone             10:58

Yeah, I mean, if you think about how that would apply to the grow itself… If you get started with your production, in 70%, faster timeframe, and you would apply that to a 12 month period of time – as I understand it in the industry, a typical growth cycle is somewhere between four to eight months – and you’re able to accelerate that that much faster and apply that to what I understand is the averages for production. So in a 10,000 square foot facility where you are doing $1,000 per pound of flour, that makes $881,000 in total profit in the first cycle. So really the comparison is considerable.

Brandon Newkirk             11:50

Well, yeah, that’s huge.

Will Goodin        11:51    

You could probably get two harvests in that time frame.

Gregg Pearlstone             11:55

Right. Exactly.

Will Goodin        11:57

Yeah, that’s incredible. Wow.

Brandon Newkirk             12:04

It’s just incredible. You know, I did those sort of calculations often in the lighting world and I think, with modular construction, you’re dealing with one of the most precious resources that cannabis growers have – time. And when you’re shaving off that much time getting that many more harvests in, not only are you accelerate in speed to market, you can take advantage of the more immediate market conditions potentially, but you could also just realize so much more revenue in a short amount of time, at such a large scale. It’s really incredible. With this modular system for a 10,000 square foot grow, as you said, it’s quite feasible to be realizing well over $1 to $1.5 million in additional revenue, just going modular. That’s probably not even something you guys include on your payback calculators or anything like that, but certainly, it’s what everyone should be considering when they’re considering different types of construction.

Gregg Pearlstone             13:09

The other thing to consider is that, as I understand it, the utilization of drywall, certainly in a grow environment is creating potential hazards, not only to support mold, but the possibility of infestation. And I know those two things are of critical concern. And such a valuable crop. The materials that we use, don’t support any of that. Typically, it is either an EPS core or a polyisocyanurate core, both solid insulating materials, with a finished surface laminated directly to it – either fiberglass reinforced plastic, PVC, or painted steel – and then everything is framed in an anodized aluminum framework. And so there’s really nothing inside that would support anything that could be potentially hazardous to the crop.

Will Goodin        14:11

That’s absolutely right. And as I understand it, the way drywall is created, it’s got all these organic materials in there that can harbor mold and mildew and terrible stuff. When you talk about like, when you talk about your substrates, Gregg, what kind of R values and what kind of insulation are you guys getting on your walls?

Gregg Pearlstone             14:33

It’s gonna depend on the insulation that the customer chooses. EPS, which is expanded polystyrene, has an R value of somewhere between 3-3.5 per inch. Polyisocyanurate is double that.

Gregg Pearlstone             14:46

A polyisocyanurate, it’s a slightly more expensive option, but then you have to consider the payback for the energy that you can save depending upon the environment that it’s going into.

Will Goodin        14:57

Well, this comes down to my next question, which is budgets. And it’s kind of funny, my wife and I, we just built a carriage house in our backyard. And, of course, like any construction project, it went way over schedule, way over budget. And I got to think that going modular has got to take out some of the variables when it comes to costs.

Gregg Pearlstone             15:20

Yeah, absolutely. We like to be certain that we’ve addressed as much as we possibly can on the front end. That’s why we will produce very detailed drawings, explaining exactly how the structure is going to be built dimensionally. And so we typically are getting on site to do a review process. At that point, we can note any on site obstructions, any issues that we see perhaps that weren’t taken into account initially, make modifications so that when the material shows up, everything is ready to go. And it is a pre-engineered system. So it’s important to remember also, there’s not a lot of cutting necessary. So the other thing that we really promote is the lack of concern you will have about suspended particulate matters in the air. Ultimately, all of that has to be cleaned before you can go into growing. So we address that also.

Will Goodin        16:26

Yeah, that’s pretty incredible. And actually, that would probably lend itself to being more conducive to some of your clients phasing out their projects. So if they built out, say, a smaller portion of their building using a modular type of approach, then they might benefit from not having to risk particulates in the air from cutting and sawing and doing all that stuff.

Gregg Pearlstone             16:56

Another advantage on that subject is the ability to expand the initial investment, and you get to reuse everything that you bought. So if they are concerned about the timeframe – and I know, in many cases, they are concerned about making sure that they’re in compliance with the requirements established by the state that they get growing quicker – so we can start on a smaller scale. They can get up and operational, demonstrate that they’re successfully growing product. They can start generating revenue. Then it’s very easy for us to come in and take that initial design and expand it into whatever they want it to look like. And that can be done in phases. Maybe they don’t expand to this 30,000 square foot footprint in the second phase. That could be done over a period of time, and everything that we’re going to sell is reusable. We retain all of these records in house. On any given day, I can walk out on to our sales floor, and several of our coordinators are working on just that – they’re redesigning something that we sold to somebody in the past. It could have been last year, it could have been 10 years ago.

Brandon Newkirk             18:06

So that’s an amazing point. You know, we were talking to a vertical farming consultant and expert, Jim Pantaleo, on a previous episode, and he was talking about how one of his largest recommendations for new vertical farmers is you need to prove your room, prove your facility. And you know, a lot of investors don’t really like to hear that it can take quite some time to prove a room. They want to go all in all at first. And then when they find that maybe some parts of their systems need to be tweaked, and there’s limitations to their conventional construction, it gets more costly later on. What you’re saying about phasing the rooms really speaks to that, that you’re able to reuse these materials. So you can easily phase projects, and you can create a bulletproof facility on a smaller scale, and then just replicate. And I think that that is a huge additional value in the indoor farming industry because you certainly need to dial in your integrated systems for your local microclimate and what have you.

Gregg Pearlstone             19:09

Yeah, absolutely.

Brandon Newkirk             19:12

Well, that’s great. I really appreciate all that information. When you’re looking at some of these facilities, and you know, certainly some of the project owners are primarily considering up front cost, how do you describe that payback to them? And coming back to costs, what is your process look like for for getting somebody set up?

Gregg Pearlstone             19:40

Getting set up in terms of doing business with them?

Brandon Newkirk             19:44

What does the installation process look like?

Gregg Pearlstone             19:47

I see what you’re saying. Really, for us, it begins with a review of the design that they want. If they’ve got an architect involved to a system, that’s fine, I should add and nothing against architectural community but we do all design work in house. If somebody understands the square footage of what they’re working toward, be that the square footage on the ground, and then also the the the height at which they’re going to be growing, you know whether it’s a single or a double grow, come up with a design, and we obviously put together a proposal. And then once that’s done, we go through the whole approval process. Typically, we will generate all of the necessary drawings that will allow them to submit for permits, if that is part of their plan. We can do all of the engineering calcs, we are set up to do engineering in all 50 states. So we can supply that also. And again, I think it’s important to note that that’s all happening in the background. So once we arrive on site, everything’s done, and the construction is very fast. So typically as our crew arrives, we lay down a floor track onto the substrate. And we begin to set wall panels. You know, the beauty of this system is you can really start anywhere. Theoretically, you could even start with the ceiling system. We’re actually completing a very large project for Ford Motor, not a grow room. But with the uniqueness of the project and the way it had to be staged, we started with a modular roof system. They then came in and installed all of their mechanical equipment above it. And then we came in and we surrounded it with these wall panels that were specifically designed for the application.

Will Goodin        21:43

Wow, that’s amazing. Very cool. There’s got to be other things that I would imagine some of your clients or potential clients are missing. I’ve heard there’s benefits going modular versus conventional, in terms of not only the budget… We touched on earlier where if a contractor gives you an estimate, that’s just an estimate, but you guys are able to dial it in a lot more than that. I’ve heard of things like depreciation as well.

Gregg Pearlstone             22:15

Absolutely.

Will Goodin        22:16

Okay, is there a benefit with that in going modular?

Gregg Pearlstone             22:18

Sure, I mean, what we’re selling is considered capital equipment. So really everything that they’re going to buy from us can be accelerated seven years typically, versus 30 plus years for any permanent construction. And that’s the way conventional construction is going to be viewed. So there is a considerable advantage. It’s a big deal for this Kindbio project. That’s one of the main reasons that they were going with modular – that and the speed at which we will be able to get the project completed. So there’s a huge advantage to that. And that applies to all of the customers that we sell to. You know, in addition to that, really, for us, this is an environmental room. We’ve been building environmental rooms for 50 years. What we need to do is create a sealed environment for the grow experts to come in and produce the proper climate to grow the product. So that’s what we focus on. And that’s where we’ve been successful, whether it’s for growing cannabis, perhaps for growing other vegetables, or for doing some sort of manufacturing process.

Will Goodin        23:39

That’s incredible. Very, very cool. Yeah, to me, when I hear all that stuff, it’s kind of a no brainer to go modular versus conventional. But that’s just me.

Gregg Pearlstone             23:51

Yeah, somebody will look at the initial cost to your point. And that’s typically the only reason that they would not choose modular. And that’s really because they haven’t experienced it. All of our customers, and I’ve been doing this a long time, all of our customers, once they have purchased it, they have a successful experience. They’ve had a chance to use it. They see that in comparison to conventional construction, it’s as good from the performance standpoint. And by that I mean, the insulation values, the functionality, the look. And then in addition to that, they have the advantage of having it done that much faster, that much cleaner, and knowing that if they want to move or modify, it’s very simple for us to do. All the while they’re getting the accelerated depreciation advantages. So we take a look at it as a total package, there’s actually a cost savings. It’s just sometimes somebody needs to see, what’s the phrase, to see the forest for the trees, right?

Will Goodin        25:00

That’s been my experience. So you know, working on modular wall projects in the past or modular construction projects in the past, it’s the upfront costs are definitely going to be a little bit more expensive than a contractor’s estimate. But, you know, when you take the accelerated growing time, you’re able to start growing a lot quicker, the depreciation, all that stuff. Again, it’s a no brainer.

Gregg Pearlstone             25:27

The most popular construction for manufacturing warehouses is poured in place concrete. It’s a modular concept. So the whole idea is to simply bring in the materials in a modular format, to dramatically accelerate the construction. If you look at construction, as a whole, modular construction is the new wave, even when they’re utilizing conventional material, typically, for things like hospitals, for things like senior living facilities, so much of it can be built off site and then brought in as a module and dropped into place. And again, it’s really the same concept. It’s just accelerated, it’s speeding up the completion of the project to allow them to get to business, whatever that business may be, and get there sooner to start generating revenue. And in the cannabis industry, obviously, the revenues are considerable.

Will Goodin        26:35

Oh, yeah, cash is definitely king in cannabis, for sure. And you actually bring up a great point. Having modular construction built in kind of strict environmental conditions and having more of a QA/QC process, that’s got to be a huge advantage over going with a contractor to build your walls from scratch, right?

Gregg Pearlstone             26:59

Consistency of performance is very important to us. We’ve got a long list of clients we’ve supported that will back up our claims. You can come and look at our facility, if you want to see how we operate. We have 120,000 square feet, specifically dedicated to production of of the modular wall systems, which is just one of the products that the point of getting manufacturers. So you get that comfortable feeling of knowing that when the material gets there, it’s going to be right, and it’s going to be exactly as expected. And it’s really just a replication process for us. You know, when you make a panel, you make that panel and you make it over and over again, through our process. We ship it to site and we assemble it.

Brandon Newkirk             27:49

Well, Greg, that really sounds amazing. I’m curious… We’re technologists here, we love agricultural technology, learning what’s coming out what’s new in the future. 31% the speed is amazing. I’m curious, in five to 10 years, do you think it’ll be even quicker? And have you seen anything pretty cool that is in the works?

Gregg Pearlstone             28:10

You know, I’d like to say yes, but I don’t know. We’re always looking for new ideas. More importantly, we’re always looking to improve our manufacturing processes. So probably a better answer would be the speed at which we can get everything done so that we can get to site and get it done that much faster. That’s really what the future holds for us. So, you know, we’re always working on improvements to the lamination line. We’re always looking for new materials that we can utilize to provide better performance once it’s on site. And so that’s where I look for changes in the future. If there is that next novel idea, we’ll be able to get it done in terms of the construction process that much quicker.

Brandon Newkirk             28:57

Yeah, absolutely. I mean, at 31% of the time, you’re already lightning light years faster.

Gregg Pearlstone             29:04

Quite a bit faster, isn’t it?

Brandon Newkirk             29:06

Yeah, it really is.

Gregg Pearlstone             29:10

And it’s a pre-finished product. So once it’s done, it’s done. And the maintenance, the other thing we didn’t really talk about, there’s really no maintenance on it. For growth facilities, it’s typically a smooth fiberglass reinforced plastic. It could be painted steel. Super durable materials, designed to last for years and years with virtually no maintenance. Simple wipe down if necessary. So you don’t have to worry. It’s a laminated design. So the potential for popping a hole in that if something was to hit it is virtually zero. So over the long haul, and honestly, that’s why the product has been so popular inside factory environments is because it’s so durable, while it’s providing the criteria that our users expect.

Brandon Newkirk             29:57

Yeah, absolutely. I’ve seen a ladder almost go through a wall multiple times. In certain facilities.

Gregg Pearlstone             30:12

Happens all the time.

Brandon Newkirk             30:06

Yeah. I mean, there’s a lot of equipment moving around, right? That’s actually a quite a big benefit.

Gregg Pearlstone             30:12

Yeah.

Brandon Newkirk             30:15

Well, this is all really great. You know, I appreciate you joining us, Gregg. Is there anything you think we didn’t cover around modular design or that you would like to touch base on before we wrap it up?

Gregg Pearlstone             30:29

I don’t think so. I hope the people that are listening will consider it, and allow somebody to put together a proposal for them and they can do their own comparison. Take a look at the estimated time for installation and do the math.

Brandon Newkirk             30:48

Absolutely. I agree. Couldn’t agree more. Well, thank you for joining us, my friend and we will be in touch and talk soon. Appreciate having you on.

Gregg Pearlstone             30:55

Thanks gentlemen!

Will Goodin        30:57

All right. Thank you Gregg!