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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