The Industry’s Energy Problem

As legalization proliferates across the United States, the cannabis industry’s rapid growth is forcing a reckoning with its environmental impact and how to reduce the resource consumption and waste that accompany commercial operations and products. Of particular concern to environmentalists and industry veterans is how to better manage the energy use required by cultivation facilities. According to some experts, the industry already accounts for more than 1 percent of all U.S. electricity consumption, and that percentage continues to rise as the industry expands.

The challenge of energy overconsumption is very real and can be attributed, at least partially, to the disjointed nature of the U.S. industry, where federal law prohibits interstate commerce. This means the plant must be grown not only in hospitable climates, but also in areas with unfavorable growing conditions. As a result, indoor cultivation has become the norm. Currently, 80 percent of cannabis from legal U.S. markets is cultivated indoors using sophisticated lighting and environmental controls designed to maximize the plant’s yield. These systems can consume up to 2,000 watts of electricity per square meter, about forty times the energy needed to grow leafy greens like lettuce indoors.

There is no question the current level of energy consumption is unsustainable. As evidence, look at California’s recent announcement that the state is offering cultivators rebates of 100 percent or more when they switch to energy-efficient light-emitting diodes (LEDs). The rebates are part of an emergency measure called the Market Access Program, which was signed by Governor Gavin Newsom to reduce stress on California’s electrical grid. According to state officials, a reduction in energy consumption is necessary to contain rolling blackouts that could cripple the state’s economy. This urgent request for “grid relief” is a glimpse into the future of the entire country if industry practices do not change.

For cultivators, reducing consumption has become an economic necessity as much as an environmental need. Energy costs continue to increase, and expanding competition, cost compression, and shrinking margins are hammering businesses. Operators must consider any and every advantage to save money, increase productivity, and grow stronger plants while reducing energy use. Fortunately, technological advancements in lighting provide a relatively fast and efficient way to meet many of these urgent goals.

Today, the pace of LED lighting innovation is driving the modernization of cannabis cultivation, addressing critical energy-reduction needs while refining the growing process to enable more control and better outcomes. But as beneficial and important as upgrading and modernizing lighting may be, various perceived barriers still keep some cultivators from making the transition.

Some cultivators hesitate to adopt LEDs due to a general lack of knowledge about lighting technology and lack of awareness about the benefits of advanced systems. However, the urgent call to action from California’s Market Access Program is helping bring attention to the issue. As energy consumption creates grid concerns outside California, other states also may sound the alarm about potential grid failures. In fact, most states today offer financial incentives in the form of rebates for transitioning away from higher-energy-use technologies. Many cultivators are woefully unaware of the rebate options available to them, much less how to take advantage of them.

Many cultivators are keenly aware of their energy use and the need to modernize their facilities, but the initial investment required to make the transition (as well as a lack of familiarity with the technology) can feel overwhelming. However, with proper planning, businesses that can absorb the upfront costs are rewarded quickly with rebates from the state, which can cover most or even all of the equipment outlay. Once the lighting is installed, long-term savings and productivity benefits kick in quickly, making the initial investment a distant memory. Unlike in years past, more financing options are available, some of which are even available directly through lighting manufacturers. In addition, some LED providers will help cultivators find financing and even help with rebate applications where applicable.

A growing, healthy, and responsible industry must make energy reduction a top priority if businesses are to thrive. There is no question continued overconsumption of energy by cultivators must become a thing of the past. Businesses across the U.S. eventually will find the changes necessary to avoid extinction at the hands of forward-looking competitors.

In an industry evolving past its homespun roots to become a force in the U.S. economy, modernization is inevitable—and complacency is not an option.

Mike MacKinnon is chief executive officer at Spectrum King LED, which has been crafting LED lighting for cannabis since 2015. He possesses more than twenty-five years of executive leadership experience focused on commercializing innovative and disruptive technologies, guiding commercial strategy, and leading impactful sales and business development teams at multinational organizations.