With new regulations that could further support the booming cannabis industry, plus even more states loosening regulations in the 2020 election cycle, cannabis is ready to explode. However, it’s still the inescapable price of production that could make or break just how profitable companies will be.
Energy is absolutely critical for a crop that’s extremely reliant on light and perfect growing conditions to meet demand. And that demand is high; cannabis was worth roughly $10 billion in 2019. That number is expected to rise consistently over the next few years, and it could come with a sizeable carbon footprint. The best data we have dates back to 2017, when the United States produced 16.4 million pounds of cannabis. That produced a staggering 1.8 million tons of carbon into the atmosphere. By 2020, the industry is putting out roughly 2.4 million tons of carbon, and that’s something that may see more taxes and penalties in the years ahead.
That inefficiency has a big impact on the bottom line, too. Electrical demand is a large component of day-to-day expenses for most growers. Behind labor, it’s the biggest operating cost for growers. Much of that is due to the plant’s sensitive need for light. Marijuana often requires stretches of twelve hours of lighting at a time, plus the right humidity and water to grow.
On average, indoor growers spend 262 kilowatts per hour per square foot. One gram of flowering plant can produce a pound of carbon emissions and cost roughly 24 cents to produce, strictly in energy expenses. Outdoor growers see numbers half of indoor, but it’s still a big dent in the company budget.
That big footprint can have an impact on the communities growers live and work in. To fight an oversized draw on the grid, some municipalities are putting caps on the number of electricity growers can use, typically around 36 kWh per square foot. Cities in Massachusetts, Illinois, and part of Canada already have this type of legislation on the books, and as the industry grows into new regions and states, those same rules may find traction at the state or even federal level to create an even playing field and protect the environment.
At present, just 6% of the electricity used in cannabis production can be traced to sustainable energy sources like wind and solar. The vast majority use coal and natural gas, especially in North America. Individual growers are looking at ways to include renewable technologies, more efficient lighting fixtures, and energy storage to lower costs and increase margins as they grow.
If you’re ready to take a closer look at how you can improve your energy environment and save the planet in the process, we’re one of the most experienced companies in improving efficiency for cannabis growers. Learn more and contact us today!