In my current world, I built a horizontal tunnel from my home to the nearest demon altar, at a depth of 8 feet above sea level. As it happens, this tunnel passed through a relatively large area of sand and, while making a run down this tunnel last night, I discovered that cacti had grown in it, contrary to my assumption that they would only grow on the surface deserts.
I've checked both wikis and found no information on cactus farming. Are the requirements for growing cacti (altitude, vertical space, and perhaps quantity of sand in the area) currently known? For now, I've dug six blocks down from the main tunnel and paved at the original level, which looks like it should leave a cactus-height space above the new level of the sand surface, but I haven't seen any new cactus growth yet.