The cannabis industry has exploded across North America in the past five years amidst a new wave of optimism and legalisation, with the combined CBD and recreational cannabis industries set to be worth more than $47.3 billion by 2025 in America alone.
However, the emerging industry has been experiencing a number of teething problems, notably the greenhouse emissions of growing the crop itself.
According to a recent report there was a 45% spike in Denver’s energy consumption in 2016, which was a direct link to the cannabis growing sector.
“The key in this emerging industry is to be asset-light,” says Joseph Maskell, founder of AAXLL.
“With billions spent just on electricity in the US cannabis-growing industry, the companies that will survive the next culling, which is already in process, will be those with low capital outlays, no warehouses, no buildings, no machinery” he went on to say.
It’s also worth noting that much of the USA’s cannabis is produced illegally due to it only being legal in 22 states, which sees annual estimates reach 3-4 percent of the entire country’s energy consumption.
A report by New Frontier Data found that legal and illegal cannabis cultivation combined uses almost three times the amount of electricity as the entire Starbucks Corp, with cannabis consuming 4.1 billion kilowatts per hour (KWh) compared with Starbucks using only 1.7 billion KWh, which is still a huge amount of energy.
The legal cannabis industry uses around 1.1 million megawatts per hour per year, which is sufficient enough to power 92,500 homes.
The report revealed that “such growth has increased the size and complexity of the supply chain and the energy usage rate, and dramatically expanded the industry’s carbon footprint”.
It determined that the driving factor of the huge increase in electricity usage was down to many cultivators making the move from growing cannabis in outdoor fields to instead opting to utilise greenhouses and indoor grow houses, which use more than 18 times the amount of electricity to produce just one gram than outdoor set-ups.
Indoor growing systems can also operate for 24 hours per day, using fans, lights and air conditioning systems which add to the electricity consumption. To ensure the most profitable and high yield harvest of a grower’s cannabis plants, it is optimal to use high intensity lighting systems as well as high-powered air conditioning units in order to shorten the plant’s natural growing cycle.
One of the benefits of utilising indoor cultivation is it demands the least amount of water usage, which is beneficial for states which struggle with droughts and lack of water in some months such as California, but it remains to be the most energy intensive method for growing cannabis.
The lights used in indoor cannabis cultivation are around 70 times more energy intensive than those used in commercial office buildings and even hospital operating rooms. The huge amount of lighting eventually turns into heat which then transforms into humidity when paired with the water released from the plants, which also demands dehumidifying systems.
The enormous influx of electricity consumption risks putting a massive strain on the public utilities, as was the case in 2016 after Oregon legalised recreational cannabis. One of the main energy suppliers, Pacific Power, reported seven blackouts which were later found to be linked to cannabis production.
A study by staff scientist Evan Mills from Lawrence Berkeley National Laboratory found that cannabis production has shifted indoors and legal indoor operations consume around one percent of the total national power consumption. This figure is equal to powering two million average-sized homes in the US.
Mr Mills also concluded after narrowing the findings down that a single joint of cannabis is equal to a 100-watt lightbulb running consistently for 17 hours.
This study was undertaken in 2011, with the cannabis industry having expanded exponentially since then, making the current figures much higher.
A few states have decided to tackle the growing issue of soaring electricity demand from cannabis cultivation by adding extra measures for these businesses.
In Colorado, Boulder County has devised rules in which commercial cannabis growers must offset their electricity use using local renewable energy sources or pay a 2.16 cent charge per kWh, with accrued fees being put forward to the Energy Impact Offset Fund, which is used to educate growers and financing research into more sustainable cultivation equipment such as lighting and ventilation systems.
In 2012, residents in Arcata, California, voted to implement a 45 per cent tax on residential households that spend more than $700 per month on electricity, which is equivalent to the amount of power used by a big chain drug store.
The tax was put in place to tackle the growing number of commercial home growers, sometimes operating illegally, using family homes full of high intensity lights and irrigation systems that raise energy prices in the area and can often lead to fires.
With the industry not looking to slow down, companies need to take into consideration the necessity of reducing their carbon footprint in such an energy-devouring business model.
More efficient lighting may be a small and easy solution, with LED lighting being an option, as well as the use of solar power to harvest electricity organically, which would also benefit business owners in lowering the financial output, thus saving money in the long term despite high initial costs.
To offset the huge amount of water consumption, cannabis growing businesses could look to reduce the water used and wasted by collecting the condensation that gathers within the dehumidifiers in grow houses, which could be filtered and recycled back by watering the plants with it.
Moving back to outdoor operations is a possible solution, with this process being the cheapest and most energy efficient way to cultivate cannabis. However, most businesses care more for speed over sustainability, and many states don’t allow for outdoor growing.
While the industry is in its early stages, many sustainable measures have not been taken due to the lack of clear standards from regulatory bodies, and businesses haven’t felt the pressure to do something about their huge energy usage.
With time, additional rules will likely be put into place and businesses will be held to higher standards, along with respective states looking for solutions on how to lower the ever-growing carbon footprint of the supposedly green industry.