When designing cultivation facilities or other business types, the design process typically starts with first choosing a property, then choosing a building, and then designing the equipment and systems to outfit the building. When it comes to hemp extraction, we actually recommend the opposite: start with choosing your processing method, then design your facility and systems, and finally choose a property that will work for the process and building you have designed. 

Hemp extraction typically involves the use of hazardous materials, which can affect a number of building and municipal zoning codes and regulations. In addition, the size and quantity of hazardous materials can make a big difference in facility design and considerations, such as where materials will be located. If you choose your building and/or property before you’ve defined which extraction method you’ll be using and the types and quantities of hazardous materials that go along with your chosen process, you may find yourself in a position where the building and/or property you’ve purchased won’t actually work for your facility – which is a major setback for both your schedule and your budget. 

In this three part series, we’ve outlined the steps involved in starting a hemp extraction operation. Today, we’ll round out the series with Step Three: Choose a Property. 

Key Considerations for Property Selection

Now that you have determined your extraction method, classified any hazardous materials, and designed your facility, it’s time to find a property that will work for the facility you have created. There are several variables that are important to address before making a purchase or signing a lease – committing to a property that won’t work for your business and your production goals can be detrimental to your project timeline and budget. 

• Rent vs. Buy: Purchasing a property outright gives you equity and complete control over the customization of your facility, but an expense this large may not be possible for some hemp extraction operations who are just starting out. Leasing can be a viable, low-risk alternative, but you will lose some control. If you do decide to take the renting route, be sure to keep lines of communication open with your landlord and understand if you will be sharing the property with other tenants. Depending on what kind of operations other tenants are engaging in, your hazardous occupancy classification may be affected. 
• Location: The location of your property is one of the most critical factors to consider. Most local jurisdictions regulate where cannabis businesses can operate, and compliance requirements can vary greatly from one location to another. Pay close attention to property lines as they will have a great impact on your compliance requirements. Carefully and comprehensively review options with your architectural team to fully understand associated zoning and code requirements. 
• Utilities: Confirm that all your required utilities like electricity, gas, water and sewer are available at your chosen site, in the capacity that you need them. Utilities are one element that is extremely complex, costly and sometimes not feasible to change after the fact. Also consider your plans for future growth – what will your capacity requirements be several years down the road when your operation is fully optimized?
• Size: Consider your business goals and plans to scale or grow in the future. If your facility will take up the majority of your property, you may not have much room to expand your business.

Real World Case Study

We had a client in the past sign a lease agreement on a building that they had chosen based on size and location. Unfortunately, the client had not considered property lines and did not include the right team members in this decision who could have brought this concern to light. Because of the type and quantity of materials this operation had on site (ethanol, pentane and combustible fibers) their facility had a hazardous occupancy classification (H occupancy) and therefore needed to be at least 50 feet away from the property line in order to be compliant. The building they had chosen and committed to was only five feet away from the property line. There was no feasible solution to move the leased building further away from the property line, and the client ended up having to start over and find a new property that would work for their specific operation. This setback had a dramatic impact on their project timeline and budget, since time and money were both lost on the building that they initially selected. 

Final Thoughts

CBD and other hemp extracts are rising quickly in popularity for consumers, and show no signs of slowing down anytime soon. More and more players are joining the hemp extraction game, but designing an extraction facility is a complex process with many considerations to keep in mind. Understanding the steps involved and the order in which to take them – along with building a reliable team early on and engaging them often – will be vital to the success of your operation.

In Case You Missed It

Getting Started in Hemp Extraction: Step Two, Part Two: Choose & Design Facility

Design & Construction Considerations for Cultivation and Processing Operations: Part One