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Report Reveals High Energy Costs of Cannabis Industry

Report Reveals High Energy Costs of Cannabis Industry

As cannabis legalization continues, the agricultural needs of cannabis are becoming more apparent.

A new report from the data firm New Frontier studies the long-term implications of energy consumption due to the cultivation of cannabis.

“Marijuana is the most energy-intensive agricultural commodity that we produce, and that’s largely because of the very high energy costs associated with its cultivation and production indoors,”

said John Kagia, director of industry analytics for New Frontier, to the Washington Post.

“We wanted to focus on this issue of energy use in the marijuana industry because we think it is one that is going to have very significant long-term implications.”

The new report suggests that the marijuana industry consumed one percent of the nation’s electricity.

Growing marijuana on an industrial scale requires massive amounts of electricity to control light, heat, humidity and HVAC conditions in indoor growing operations. While there are climates in the United States that can support marijuana growth, local and state laws often restrict outdoor growing operations. “There are some environments, by regulation or because of the environmental conditions, you would not be able to,” said Kaiga. While outdoor conditions might seem ideal, pest control becomes a significant issue, and has already caused product recalls due to the presence of pesticides.

To conserve energy, experts have been recommending legislation and incentives for growers to use clean energy, like solar energy and LED lighting.

“To date, they have still not been able to surpass the cost performance threshold offered by existing lights, but we are getting there, and we think this innovation that is happening around the lighting sector is one of the ways that this industry will be able to decouple itself from this extremely high energy use,”

said Kaiga.

In the meantime, Colorado and other states are taxing growers for excessive energy use. Even with the added costs, growers are still able to make a profit. However, that could change as more states legalize marijuana. “Currently, energy accounts for approximately half of the wholesale prices of marijuana, and as those prices fall, the share of energy and the total production cost will continue to increase,” said Kaiga. If falling prices are not an incentive for growers to change their methods, marketing cannabis products made with clean energy could entice consumers who are environmentally conscious, as it has in other industries.

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Cannabis Cultivation Leading to New Agriculture Technology

Cannabis Cultivation Leading to New Agriculture Technology

The race is on for startups and big businesses everywhere to develop energy-efficient and technologically advanced cannabis greenhouses. The marijuana industry is taking the world by storm now that more countries are loosening their restrictions and laws on the use and sale of medical and recreational marijuana.

There is a huge market for technology in the industry, and more and more businesses and startups are taking notice. Troy Dayton, CEO of The ArcView Group, the legal marijuana industry’s hub for investment, data and progress, explained:

“Cannabis is spurring on an ag-tech revolution.”

Dayton continued:

“This is a boom born entirely out of ending repressive laws. The market is already there, it’s just moving from the shadows into the light. That’s why you’re seeing this incredible growth and why so many people see it as a once-in-a-lifetime [business] opportunity.”

There is a huge demand for cannabis, and growers who rely on traditional growing methods are not able to increase their output to meet that demand. Better processes need to be developed.

Currently, most of the scientific and technological developments have been centered on interior cooling and lighting systems. This equipment accounts for a large portion of a marijuana grower’s cultivation expenses, so more innovation is needed to help growers ramp up their production with the use of state-of-the-art water irrigation systems and solar lights. New software is also required so that growers can run different scenarios without wasting time or product to determine optimal growing conditions.

As the world continues to become more accepting of the use of cannabis, more mainstream companies are taking note and jumping on the bandwagon. Swedish lighting manufacturing giant Heliospectra AB is shifting its focus to the marijuana industry because not only is there a high-profit potential, but there is also the opportunity to increase production and reputation without as much competition.

Many other companies like Hawthorne Gardening Co., a subsidiary of Scotts Miracle-Gro Co., are following suit. They want to be in a position to operate in a space where there is more cash, more demand for research and development, and where there are larger budgets for innovation. Although the focus is on the cannabis industry, all farmers could be able to benefit from the development of energy-efficient growing equipment and technology.

Dan Sutton, managing director of Tantalus Labs, said,

“Let’s assume everything that’s ever been done in cannabis cultivation is wrong. We have to build from the ground up, we have this broad realm of science that no one has been able to previously explore.”

Tantalus is currently building a 120,000-square-foot greenhouse in British Columbia, the design of which someday may be used to grow other plant types, such as tree seedlings that could be used for reforestation.

With the steady increase of growers in the cannabis industry, the landscape of the playing field is changing. Now is the opportune time for companies to get in the game if they want to become major players in this market.

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