Boosting Revenue with Crop Cycle Monitoring: How Sensors Increase Your Yield and Bottom Line

Boosting Revenue with Crop Cycle Monitoring: How Sensors Increase Your Yield and Bottom Line

Crop Cycle Monitoring: If you're a plant-touching company, the biggest lever that you have for increasing your profitability is getting your yields up. Bryan Fields: What's up, guys? Welcome back to another episode of The Dime. I'm Bryan Fields, and with me as always is Kellen Finney. This week we've got a very special guest, Scott Campbell, president of METER. Scott, thanks for taking the time — how are you doing today? Crop Cycle Monitoring: Doing great, thanks for having me. Excited to dive in. Bryan Fields: Kellen, how are you doing? Kellen Finney: I'm doing really well. Really excited to talk to Scott, really excited to nerd out on some data and science around the industry. How are you doing today, Bryan? Bryan Fields: I'm excited, and yes, Scotty is from the West Coast, Kellen — you don't need to ask, we can get right to it. Appreciate Jordan Zager for making that introduction, and Washington doing its thing from a science standpoint. So Scott, for our listeners that aren't familiar, can you give some background about yourself and how someone with a Wharton MBA got into the cannabis industry? Crop Cycle Monitoring: Yeah, thanks. For me it's kind of a long road. I grew up in this little college town where our business is — Pullman, Washington. My dad was a professor at the university and had an idea for a scientific instrument he wanted to sell to his colleagues. About 40 years ago, in the early '80s, he started a company that eventually became METER, the company we have today. The business grew over time, mostly focused on two areas: ag research and quality control, mostly for food processing. I left Pullman, got a business degree at Wharton, worked at some other companies, and eventually made my way back to Pullman and started running the family business. About seven years ago, we started looking around, and instead of just being a company that made test-and-measure equipment, we saw changes in the market — it's not just about the measurement anymore, it's about how you use that measurement with IoT, distributed networks, AI, and machine learning. That's the future, and if we didn't get involved we'd get left behind and commoditized as a sensor company. In looking for applications for that data, that was exactly when the cannabis industry was in a massive growth period. It's a little ironic — I come from a huge family, I'm number six of nine kids, a big Mormon family — not the background you'd assume would get into cannabis. But around that time I had a mountain biking accident and broke my back, and had a lot of chronic pain from that. In reading the literature I started using THC and cannabis to deal with that pain, and it took me a long time to recover — nerves grow back slowly. It completely changed my perspective on the plant's potential and what it could mean for society. The other fascinating thing was that when we brought our science expertise to the cannabis industry, growers and producers just soaked it up — so much more interested in learning and improving than other ag industries we'd worked in. We said, this is different, we have to develop products for this. That's how we built the AROYA business. We launched the product in December 2019, and we now have about 600 facilities using AROYA for crop cycle monitoring and crop cycle improvement. Bryan Fields: I appreciate you breaking that down. It's great hearing from someone who has personal experience with cannabis and then moves into the industry professionally. So, sensors are already common in food and beverage and ag tech — what's the current state of sensors specifically in cannabis, and how does your team's role differ between those industries? Crop Cycle Monitoring: Cannabis is totally fascinating and unique. If you look at the plant, it's like trying to grow apples with no skin on them — very delicate, but in some ways very resilient and in some ways temperamental. What makes it unique is that it's valuable enough that you can spend money increasing yields and collecting data, and that increase hits your bottom line more immediately than it would with soybeans or even specialty crops like apples. That makes cannabis a great target for sensor data. But to your question, only about 10 percent of indoor cannabis cultivation facilities have what we call a crop cycle monitoring system — meaning they're gathering substrate data, hydroponic substrate sensors in coco or rockwool testing pore water EC, water content, and temperature; climate sensors testing relative humidity, temperature, CO2 concentration, and light intensity; and then writing all that data back to the cultivar record along with yield. A lot of facilities have data flowing, but it's trapped in the control system where it can't be used for analytics, or trapped in the seed-to-sale system, which has no cultivation data in it — that's as good as throwing it away. Facilities that actually deploy sensors and tie all the data to the cultivar record are still only around 10 percent, which is high compared to other industries, but still leaves a lot of people missing out on the efficiencies you can get from crop cycle monitoring. Bryan Fields: Were these custom sensors your team had to develop specifically for cannabis, or did you take bare-bones sensors from other industries and apply them here? Crop Cycle Monitoring: More the latter. Temperature, CO2, and relative humidity are pretty standard, and most people have reasonable sensors for climate. Light is a bit more specialized — we work with Apogee Instruments on that. But the substrate sensor is what really made us different, and that came out of work we did with a company in Holland called Grodan, the largest rockwool substrate company in the world. In 2010–2011 we started working with them on a substrate sensor that would more accurately measure pore water EC, because Dutch greenhouses are the most productive in the world. We cut our teeth making these substrate sensors for Grodan — they sold them, we didn't sell directly. It wasn't until eight or nine years later that we adapted that exact same sensor for cannabis. The interesting thing is that pore water EC — the thing we're best at measuring — happens to be the parameter cannabis responds to most, in terms of osmotic stress at different growth phases. So the thing we happened to be good at measuring lines up perfectly with the most valuable cash crop in the world responding really well to it. Bryan Fields: That's a nice pairing you found — I'm sure once you saw the data you looked at each other like, we've got something here. Crop Cycle Monitoring: Exactly. Funny thing is, it goes back 40 years, even to the 1960s when my dad was writing his dissertation on plant water stress in native soils. The difference is that outdoors, native soils stress roots through matrix stress. When you grow indoors in hydroponic substrates, you stress roots through osmotic stress — the concentration of salts that build up in the root zone as plants take up water and leave salts behind. Plants are like humans: some stress is good, too much is bad. That early research my dad did over 50 years ago ended up being useful in cannabis. Bryan Fields: That's one of my favorite parts of these conversations — realizing technology not yet applied in cannabis already exists proven in outside industries. So going back to that 10 percent adoption figure — what do you think is the biggest hindrance to operators adopting technology like this? Crop Cycle Monitoring: I think it relates to the general resistance in agriculture to using data to improve operations — we've seen this across industry after industry. Can you name a software-only ag tech company that's been hugely successful? I can't. Some have raised a lot of funding, like Semios, and some old-school companies like John Deere have big ag tech operations, but agriculture in general is hugely skeptical of new technology. Compared to that, a 10 percent penetration rate in cannabis over four years is actually pretty good — there's still huge room to grow, but I'm optimistic because the people using it are getting real value. Our biggest competitor isn't another company, it's non-consumption. A good analogy: not everyone counts calories. What you weigh is just the laws of thermodynamics — calories in versus calories burned — and plenty of fit, healthy people never count anything. Similarly, plenty of growers succeed without any crop cycle monitoring. You don't have to have this to grow plants. But if you don't have a plan for getting better, the people who do will out-compete you. The complacency comes from growers thinking, 'I don't want anyone telling me how to grow plants — I'm a master grower.' And that may well be true. The key is: how do you stay a master grower? A master grower is always learning. So the inertia we have to overcome isn't 'we're here to tell you how to do your job' — it's 'we're here to give you technology that takes your performance to the next level.' Bryan Fields: These sensors aren't simple — there's a lot of math and complexity behind the data, and then you still have to figure out what to do with it. Was AROYA, the software platform, built specifically to help with adoption, or did that evolve from your early exposure to the industry? Crop Cycle Monitoring: Great question. A lot of the early product and user-experience work was done by Steve Garrity, who ran our startup business, along with an outside consultant. They landed on a target customer we called 'the divided grower' — someone with too much going on in their day and not enough resources to understand how to improve yield and quality. That's who we targeted with the first iteration of the product: give them a way to see and consume the data in a way that made sense so they could improve. They were already constantly experimenting — different nutrients, different cultivars, walking the garden and eyeballing plants — but they didn't have visibility into the actual numbers happening in the root zone. It's like giving them X-ray vision to correlate root-zone conditions with everything else they were observing. There was one more tweak: we started talking about 'crop steering' — do you know how to steer your crop, and do you know what's actually happening in the root zone when you do? Most people weren't doing that intentionally, especially in early flower. So the initial goal wasn't even tracking yield — that came later with integrations like Metrc — it was making the invisible visible. Bryan Fields: I want to elaborate on that master grower point — that experience can't be taught or replicated. The tools you're building unlock the next level instead of replacing intuition or guesswork, which is often treated as artisanal in this industry. And honestly, these tools may help everyone else even more than the master grower, because the industry is moving faster than experience levels can keep up, and tools like this help teams scale without needing to clone the master grower ten times. Crop Cycle Monitoring: You made two really important points there — replication/scaling, and art versus science. On the art-versus-science point, I love the analogy of the Impressionist painters. Before oil paint came in a metal tube you could take outdoors, painters were confined to studios. Once that technology existed, painters like Monet went outside, were inspired by nature, and changed the course of art history. It took master artists to adapt once the technology made it possible. We're just the suppliers of the technology — the artists are the growers working with new cultivars, testing them, and getting them to consumers. On scalability — having a garage grow or a few flower rooms with 40 lights isn't the same as running an 80,000-square-foot indoor facility. Growing 5,000 cannabis plants isn't ten times harder than growing 500 — it's a hundred times harder — and most people have no plan for that kind of scaling. Bryan Fields: It's hard to grasp. My favorite question to ask operators is: what happens if the person managing nutrients and water gets sick for a day? You'll come back and wonder what happened. That delicacy, combined with leveling the playing field, requires a careful balance between ego and experience, understanding the tool isn't there to replace the grower but to unlock their ability. Crop Cycle Monitoring: Right, and it's tricky because cannabis, in a lot of ways, teaches people the wrong lessons. It's actually quite drought tolerant and resilient — it's also very photogenic, which is part of why it's so big on Instagram. A lot of people got into cultivation, plants didn't die because cannabis rarely dies outright, they got some harvest, and at $2,500 a pound wholesale in California a few years back, they thought they were geniuses. At that price they probably were doing fine — but that's not the future of cannabis, as everyone knows given where prices are today. The plant teaches people the wrong lessons about how well they're actually doing. Kellen Finney: So walk us through what it's like when you first deploy AROYA with a new grower. Do you roll out the full portfolio of sensors at once, or phase it in? Crop Cycle Monitoring: Let's use a hypothetical 20,000-square-foot facility — mid-sized, not massive, not tiny. These are Bluetooth-enabled wireless sensors deployed across the facility for all the parameters I mentioned. For a facility that size, you're probably looking at around $80,000 to $90,000 for the equipment as a one-time cost, plus a subscription for data storage, analytics, and the cloud platform of maybe $1,500 a month. As for deployment, sensors come pre-provisioned, and you use a mobile app to assign each substrate sensor to an irrigation zone and room, and each climate station to a room. For a 20,000-square-foot facility, that might take six or seven hours — in one day you can have everything deployed and data flowing. Then we tell the master grower: don't change anything yet. We need to establish a baseline for how you currently grow. After a full flower cycle establishes that baseline, our crop consultants meet with the grower — as often as they want — and suggest testing one change at a time, like adjusting irrigation early in flower, and measuring the impact. Over the course of a year, the lowest yield increase we've seen from this process is five percent, but we've seen some facilities increase yields 50, 60, 80, even 100 percent through ongoing monitoring and iteration. Jordan Zager's team at Dewey just finished their first batch with us and dialed in their parameters — they're more research-focused on genetics, but even they saw a huge jump in yield at the same or improved quality. Bryan Fields: Is it hard for businesses to spend that $90,000 plus $1,500 a month and then not make any changes for an entire grow cycle, when this industry often wants immediate results? How do you get past that? Crop Cycle Monitoring: You're right, some customers push back and just want to get started making changes right away, and that's fine with us too. But it's better to get a baseline and take a measured approach, because we're looking for continuous improvement — marginal gains that aggregate over time. The great thing about crop cycle improvement software is that once you implement a change that has a positive effect, you keep that gain forever because it's written into the recipe in the system. People are impatient, but we walk them through building on successes rather than chasing a sugar high that isn't sustainable. Five percent may not sound like much, but U.S. corn yield data going back to the 1800s shows yields are eight to ten times higher than right before World War II — cannabis will follow the same trajectory, just faster, because of the technology and software available today. Kellen Finney: When you're talking to operators, do you view your customer and your user differently — say, the CFO making the financial decision versus the master grower actually using the system day to day? Crop Cycle Monitoring: Yes, and that's probably the biggest divide in the entire industry — the gap between production, the VP of cultivation, and the CFO. They're miles apart. The CFO tends to treat cultivation like a black box they can't control and just accepts whatever yield comes out, while cultivation tends to treat finance as the piggy bank always trying to cut their budget. That's not productive. What we want is for CFOs to understand cultivation, because that's what drives earnings. Take AYR Wellness — we have a lot of AYR sites on AROYA and love those guys. I watched the conversation you had with David Goubert, and he came in focused on three things: inventory being too high, gross margin erosion from unnecessary retail price cuts, and expenses being too high. The single biggest lever any plant-touching cannabis producer has for increasing profitability is getting yields up — regardless of whether the market can absorb the extra volume, though it matters more if it can. A lot of CFOs don't appreciate that, especially at companies doing mixed-light greenhouse growing, which is even more of a black box because you're relying on natural light. Cannabis loves light — roughly one percent more light typically means about one percent more yield. This past winter in California was extremely overcast, so mixed-light growers saw productivity drop, and CFOs, without a model connecting light intensity to expected yield, just saw cash flow and profitability suffer without understanding why. When implemented well, this system lets cultivation build a plan for improving yields that's solid enough to get built into pro forma income statements, because they're confident they'll hit the numbers — which is still a rare scenario in this industry. Bryan Fields: I wish we could just play that whole answer back — that divide between the CFO and the master grower is such a common challenge, especially when the instinct becomes 'just do more, faster,' which doesn't necessarily improve efficiency and can end up burning money instead of maximizing it. Kellen Finney: There's also a structural disconnect — the master grower is essentially running the agricultural side of the business, while the CFO is looking at it like a consumer packaged goods business, since that's where the cash comes from. Switching gears — is there any area you're involved in around post-harvest processing, getting the plant from the field into a jar looking and testing the way consumers expect? Crop Cycle Monitoring: Yes — one interesting overlap in our business is that we also make a water activity meter. Water activity measures the energy status of water in a sample by putting it in a closed chamber and measuring the equilibrium relative humidity — it doesn't matter how much sample you use, the reading stays the same. For reference, if a cannabis bud has a water activity of 0.6 or below, nothing can ever grow on it — no mold, yeast, or bacteria — and that's true across all cultivars and foods. Instead of doing the old snap-twig test after drying a batch, growers put a sample in an analytical device and scientifically verify it's safe with a primary method before it goes into the package. There are three benefits: first, safety — verified freedom from mold and yeast growth. Second, consistency — growing, drying, and curing the same way every time gives consumers the consistent experience that's so often missing. Third, and hugely important, is that almost all cannabis today is over-dried. If you set a consistent water activity spec — 0.6, 0.55, whatever's right for the cultivar — and eliminate over-dried batches, your dry-weight yield can go up one to two percent. For a 20,000-square-foot facility pulling roughly $300,000 per harvest across nine rooms weekly, that's about $18 million a year in revenue, and one to two percent in post-harvest improvement is another $180,000 to $300,000 in salable product — huge operating margin points. Bryan Fields: Do you find it more effective in sales conversations to frame that as lost revenue, to get it to register with operators? Crop Cycle Monitoring: Yes — it's literally water going out the chimney stack, dollar bills flowing off into space. That image tends to land. Bryan Fields: People sometimes assume this technology is only for big MSOs with massive facilities. How small of a grow could still benefit? Crop Cycle Monitoring: In many ways it's easier for a small grower to implement, because the cost is tiny. If you've got a couple of rooms, eight tables, maybe 20 lights, the whole system might cost around $4,000 with maybe $50 a month in subscription fees. Small growers were actually our core customer when we launched — the big operators wouldn't give us the time of day at first, since they didn't know anyone else using the system. We built our way up from there. We only sell to licensed producers, not unlicensed growers, but any licensed grower, regardless of size, can benefit, and we started out with the small guys. Bryan Fields: Are there lessons from broader ag tech that you think will eventually make their way into cannabis? Crop Cycle Monitoring: I think AI and machine learning will eventually come into this industry from others, though it's widely misunderstood right now — we're still at the level of basic modeling, and anyone claiming a fully AI-enabled system today is mostly blowing smoke; it doesn't really exist yet in this industry. One thing I do think is true: because cannabis is the world's biggest cash crop — global estimates around $300 billion including black market, with white market around $30 to $40 billion — and it uses relatively little land compared to that value, a lot of technologies will get proven first in cannabis and eventually become affordable enough to move into other controlled-environment horticulture crops like tomatoes, cucumbers, and peppers. There's a lot happening in the Gulf States, Holland, and Israel around controlled-environment ag, but it's not as intensive as cannabis because a tomato plant isn't worth $250 like a cannabis plant can be. Bryan Fields: What do you think a pound of cannabis costs ten years from now? Crop Cycle Monitoring: A lot of people think it stays the same. I don't, especially with federal legalization, because big ag hasn't entered this space yet. I'm not talking about MSOs, which are more retail-focused — I mean companies like the Wonderful Company, Driscoll's, or Windset Farms, huge under-the-radar operators with massive resources who stay out of cannabis because it's not federally legal. When big ag enters, that's when there's a sea change. There will always be a craft and indoor-growing segment because you need control to nail a consistent chemovar and chemical profile. My number for indoor, ten years out, is around $300 a pound — never $30, because the electricity and nutrient input costs alone make that impossible indoors. Bryan Fields: After speaking with Graham Farrar at Glass House Brands, I can only imagine what they'll do to price given the size of their greenhouse operation. Have you seen their facility? Crop Cycle Monitoring: Yes, I've been there — it's spectacular. They have about a million and a half square feet under production with capacity to scale to five million, and their platform is straight-up Dutch greenhouse production, so they have tremendous potential. That said, as of today they don't do substrate sensing on their plants. If you take an operation producing over five million square feet and improve output by even one percent, that's a massive impact on profitability. Glass House is public, and they're headed in the right direction — I respect what they're doing. But scale alone doesn't answer the question of whether you have a plan for crop cycle improvement. If you're getting 23.4 grams per square foot in a greenhouse without supplemental light, that's a great yield — but how do you get it to 25, then 27? Corn yields have kept climbing three percent a year, roughly linearly, for 80 years since the agricultural revolution started. Cannabis will do the same, and every company, even ones as advanced as Glass House, needs a plan for that. Kellen Finney: On your product roadmap, are there other substrates or measurements you're looking to incorporate — maybe cannabinoids directly from the plant? Crop Cycle Monitoring: I've talked to people in the industry about on-site cannabinoid testing, and it's hard to get traction because they still have to send samples to a lab regardless for compliance, so they're incurring that cost anyway — the question becomes whether they're patient enough to wait for lab results or want to build an entire in-house test lab. I'm skeptical that's the near-term opportunity. What I find more interesting is an ion-specific electrode that could measure concentrations of the roughly 15 individual minerals in fertigation water — not just an aggregate EC reading, but each individual macro- and micronutrient like molybdenum or boron, in situ in the substrate. That would be a game changer, but it's a really hard problem — the Dutch have been trying to solve this for 20 years, and sensors tend to work for a day or two before fouling occurs and readings drift. On cannabinoids specifically, the thing we're actually working on is machine vision — we bought a small company last year called Farm Vision, and we're developing the capability to use something like a LiDAR sensor on an iPhone to scan plants daily and measure biomass accumulation, plant height, leaf area index, and potentially bud count and bud sizing for harvest prediction. We think the sensor should be something everyone already has in their pocket, not something installed on every ceiling. Nothing's launched yet, but if you see a new product category from us in the next year, it's likely to be machine vision. Bryan Fields: What about expanding into post-cultivation, specifically extraction — any interest in bringing sensors into that space? Crop Cycle Monitoring: A little bit — Kellen, I think you actually have deep expertise in that area. Kellen Finney: We do, yes — we have expertise in process analytical technology, applying spectroscopy-based technology to measure that kind of thing in-line. Crop Cycle Monitoring: For extraction specifically we don't do anything right now. The closest analog we have is some inline, continuous process sensor technology we use in the food industry, but it's not a current focus. It's more a case where you'd tell me what you're looking for and I can check whether any of our core technologies overlap. Kellen Finney: For us it's always about sensors, data, and improving decision-making — coming from outside industries where these QA/QC tools are already established, and recognizing how much that helps the industry and the end customer, since a consistent, safe product every time drives higher margins for everyone. Crop Cycle Monitoring: And I know we're running out of time, but here's one more stat that might surprise people. Our food science group tested how cannabinoids and terpenes degrade over time, and it's crystal clear in the research: about half of the terpenes in packaged cannabis flower are gone within eight weeks, even in a fully sealed package, due to oxidative degradation. Terpenes are a critical part of the consumer experience — they interact with cannabinoids and body chemistry to shape the psychoactive effect — and half of them can be gone, with most people, and no state regulations, even accounting for it. Things like this are part of the industry growing up: understanding this data and figuring out how to address it. That's what we're focused on — science, sensors, and software, and getting accurate data right at the point where the sensor touches the substrate or the sample. Bryan Fields: That's the perfect way to end it. Scott, for people who want to learn more or implement sensors in their cultivation, where can they find you? Crop Cycle Monitoring: Just go to AROYA — A-R-O-Y-A dot io. Tons of information on the site, virtual seminars every week, and something called Office Hours, where our crop consultants take live questions — you can find all the past Office Hours episodes on YouTube by searching 'Office Hours AROYA.' There's also great information about our social impact work — we did a project called FreedomGrams with the Last Prisoner Project that won an award last year, and a collaboration with Cookies and Cookies University training new growers on the science behind cannabis cultivation. I'd encourage anyone interested to check that out. Bryan Fields: Awesome, we'll link it all up in the show notes. Thanks for taking the time, this was a lot of fun. Kellen Finney: Thank you, Scott. Crop Cycle Monitoring: Yeah, bye.