“Recognizing just how much energy legal cannabis cultivation requires, legislatures are implementing rules and regulations to manage (or even limit) how much energy cultivators can use to prevent strain on the local grid networks.”
The cannabis industry is, to say the very least, energy intensive. Cultivation, specifically indoor cultivation, requires significant energy for horticultural lighting, dehumidification, ventilation, and heating and cooling (HVAC), each using a great deal of power. As far back as 2016, grow room electricity used for commercial cannabis production was estimated at 1% of all electricity used in the USA and is quickly growing.
According to an article published in 2021 by the State House News Service, indoor cannabis grow centers are responsible for 10% of industrial electricity consumption in Massachusetts. Cannabis cultivators face a complex landscape that involves differing state regulations and compliance requirements, local electric and gas utility obstacles, a variety of energy efficiency and sustainability sourcing options to vet, and a wide spectrum of unit costs for electric and gas supply (if in a deregulated state).
While much of the blueprints for energy efficiency and sustainability initiatives have been drawn, very little focus has been given to how best to navigate the cost and purchases of your electric and natural gas. Making sound decisions about your energy purchases can be one of the most difficult parts of running a grow. But if done well, it can have a very positive impact on the bottom line.
As the cannabis industry continues to expand, the energy industry is preparing for the intense demands of cannabis cultivation. To maximize profits and minimize impact on the environment and the energy grid, growers also need to prepare and be proactive in their efforts.
While indoor cultivators are the most energy intensive, all grow operations that consume large amounts of electric or natural gas should be mindful of understanding how they use energy and how they buy energy. Regulations for grow operations and utilities differ by geographic location, and different energy sources, pricing structure, and contract language further complicate the picture for growers. A comprehensive energy management strategy can both enhance sustainability AND secure financial success for the cannabis cultivator.
Cannabis cultivators who are focused on meeting regulations and capturing market share may overlook the financial value of a managed energy procurement strategy. Energy is expensive—but many growers are missing opportunities to save when only focused on how they USE energy and not on how they BUY energy.
With a basic understanding of building systems and an evaluation of the energy consumed by a cultivator a sound procurement strategy can be created. And once a baseline for energy consumption can be created and monitored, measures of ongoing efficiency and sustainability efforts can be more accurately tracked and monetized. These may include measures such as on-site co-generation, renewable technology such as solar, wind turbines, fuel cells, geothermal and biomass, deploying enhancements of energy-efficient technology/controls and participating in a demand response program.
Every facility has unique requirements that are influenced by the specific product and growing techniques thus creating a managed energy strategy unique to the individual grow operator. Embracing energy planning as an integral part of business operations will help growers achieve expansion and stability in a quickly growing marketplace.