top of page
  • LinkedIn
  • Facebook
  • Compass Blog
  • Writer's pictureKaytlin Knudson

Location, Energy, and Water - CEA Facility Development part 1 (Controlled Environment Agriculture)

Deciding where to develop a CEA Facility comes down to three things: location, energy and water. You should take these 3 things into account when selecting a site.

Before you can start searching for a site, you need to make some key decisions. These could drastically affect the site that you would select, so it’s important to understand these requirements upfront.

  • Crops to be grown - Bedding plants, potted plants, vegetables, perennials, herbs, etc.

  • Growing period - year-round or seasonal.

  • Growing media - soil, soilless mix, nutrient solution, compost, etc.

  • Growing system - floor, benches, ebb and flood, vertical grow, NFT, bucket, etc.

  • Annual production - How much growing space is needed?

  • Marketing system - wholesale, retail or both.

  • Investment capital available - $.

When you’re ready to select your site, one of the first questions you should ask, is “where should it be?”. There are more factors than you might imagine that should go into answering this question.

The common real estate saying “Location, Location, Location” should be “Location, Energy, Water” for CEA. Let’s get into why we would add Energy and Water to your criteria, and what else you should look for when selecting a site.


Like any real estate development project, the market is key in defining your facility location. Who are your customers, and how are you selling to them? What is your distribution radius from that potential location? How is the labor market?

Besides the market and population, the local regulations and policies are critical, particularly for cannabis projects. The obvious question of whether cannabis is legal needs to be drilled down into details for the location – Are there limits to the amounts of cannabis facilities in the area? Are there limitations on adjacency to certain areas/ buildings? What are the application and licensing fees? Are vertical integrations allowed?

Be sure to check other legal aspects of the site – zoning, certification, entitlements, taxes, etc. There may be positive legal aspects, such as incentives. Are there energy incentives that can be captured? New business incentives? Sustainability or organic growing?

Next, take a look at the environment and climate of the site. What are the snow loads and seismic loads? How well will your plants grow? What level of climate control will you need? Will your facility require extra structural support?

Finally, the land itself should be checked. The topography and soil type can have a large impact on the cost of preparing the land for development. The ideal plot will have a flat topography with a 1-2% slope for drainage. Be aware, just because the site looks flat doesn’t mean there isn’t anything underground.

Location Checklist – CEA Facility Site Selection


Energy is often in the top 4 highest costs of building and operating a new CEA facility. This is a commonly underestimated part of your facility development in terms of both budgeting and site selection. When looking at a site, it is critical to ensure that there is enough power capacity for your facility’s energy load. This requires that you, first, know what your peak energy load is, and second, know what the utilizable capacity of the potential location is.

Estimating your facility’s energy load is tricky and depends on many project variables, such as the local climate, growing systems, and level of automation. However, it is critical - if you underestimate your facility’s energy load or select a site with insufficient capacity, you will need to find a way to bring more power to your site or compromise on your facility or location. Energy infrastructure is very expensive, can take years to develop, and is often not a simple process. This can be a major impact to your project if not properly researched.

The local utility providers can be valuable partners during the site selection process. Reach out to them as early as possible, they can provide information on the energy situation of potential sites. Beyond energy, they often have knowledge of the local market, distribution lines, city economic development, and more.

Energy Checklist – CEA Facility Site Selection


Water is the second lifeblood of your CEA facility. Plants need water to grow, and every facility generates wastewater. This makes both the acquisition and dumping of water hot topics in your site selection. Like energy, you should understand your facility’s peak water demand, and the site’s water utilization capacity. The same goes for wastewater. You should also check all site resources, such as well water and retention ponds. These can be utilized to reduce the load pulled or pushed into the local water systems. Make sure you check the water rights for any water you intend to use on or adjacent to your site.

Beyond the capacity of the water systems, you also need to check the water quality. This is something that is near and dear to the grower’s heart, so make sure you know what their requirements are. If the water will need to be treated going in and/or out of your facility, you will have extra project costs and complexities, so it’s important to understand this upfront.

Don’t forget about water requirements that are not related to your plants – such as fire water. Large CEA facilities can require an unexpected amount of fire protection, which has high water capacity and water flow rate requirements.

Water Checklist – CEA Facility Site Selection

Everything Else

Before you close the deal on your site, there are a few more things to look at.

Miscellaneous Checklist – CEA Facility Site Selection

Recent Posts

See All


bottom of page