Going Green: Cannabis and the Cost of Energy Consumption in North America
According to the Cannabis Energy Report released by New Frontier Data last October, the production of legal cannabis is projected to consume 162 percent more energy by 2022.
“Based on the 16.4 million pounds of cannabis cultivated in 2017, the resulting electricity-based carbon emissions associated with that level of production was 1.8 million tons,” the report continued.
By this same time next year, the cannabis industry will be producing 2.6 million tons of CO2 emissions. But with a market worth almost $10 billion last year, the increased demand for cannabis is not going anywhere. Rather, it will be met with a demand for cleaner, more efficient energy resources. Especially in North America, where indoor and outdoor cannabis cultivation could contribute upwards of 1.2 million pounds of carbon emissions.
The cost of cannabis cultivation in North America
The cannabis industry is growing at such a substantial rate that cultivation is quickly becoming the most energy-intensive aspect of the business. The cost of energy is second only to labor costs, forcing many companies with indoor grow operations to seek alternatives for lighting and cooling while still protecting the plant’s sensitive nature.
Marijuana is an extremely light-sensitive plant. It requires different levels of heat and intensity at different stages of growing. For example, at the cloning stage cannabis can need up to 24 hours of light, and while flowering it needs at least 12 hours. These long hours mean lighting is considered to be the biggest consumer of energy in the cannabis industry.
Indoor growers can end up using an average of 262 kilowatts per hour per square foot to power their facilities. This produces one pound of carbon emissions per each gram of harvested flower and can cost growers up to 24 cents per gram. Compare this to outdoor growers who use only 2 kilowatts per hour, costing them only one cent per gram harvested.
These numbers do not mean outdoor growers are in the clear when it comes to energy consumption. According to the report, different design decisions in any facility can unintentionally increase energy consumption by half.
Consider Aurora Cannabis’ Sun facility in Medicine Hat, Alberta. Retrofitted with a low-carbon footprint design, it sits on 1.2 million square feet, making it fifty percent larger than its neighboring Sky facility. Aurora Sun sees more than 2500 hours of sunshine per year, but despite the outdoor acreage, low carbon emissions, and access to solar energy alternatives, Aurora still signed a memorandum with the City of Medicine Hat that included a 10-year energy supply agreement.
Why? Because the high-energy needs of cannabis can put a strain on local resources.
The energy load of one cannabis cultivator is comparable to that of a data or a medical center, which can skyrocket local energy demands. And Alberta is not the only market putting a cap on local energy consumption. In Massachusetts, the Cannabis Control Commission capped the amount of energy to 36 watts per square foot, a fraction of the indoor average New Frontier Data found.
Caps like these can cost growers and investors thousands of dollars in state-of-the-art LED lighting or other cleaner power alternatives. What’s more, there is very little research available that explores the effects these alternatives can have on crop yields. This puts many cultivators in a tight spot when they are looking for cleaner and more cost-effective resources.
The case for clean energy in cannabis
Based on the energy use comparison between indoor and outdoor cultivation facilities, solar power would seem like an obvious choice for cleaner energy. Instead, more than half of cannabis’ energy consumption comes from petroleum, coal, or natural gas. Only eleven percent of cannabis cultivation uses renewable energy, and only six percent of that is solar.
The fault in the case for solar power is one of scale. Many modern solar panels can only convert about twenty percent of the light they receive into usable energy. They are nowhere near capable enough to power a grow facility the size of Aurora Sun. The most cultivators could hope for would be a ten percent cut in their power bills if they switched to mixed-light grow techniques, which may not be a very big incentive to switch.
This does not mean clean energy is impossible. Home growers and investors alike are still looking for green energy alternatives. As the cannabis industry grows, so does the demand for best practices, and reducing the carbon footprint is considered at the top of that list for many cannabis companies.
For example, Liht (CSE:LIHT) (OTCQX:LIHTF) announced last month that they received their third organic certification, ensuring that the company adheres to “environmentally clean and sustainable methods”.
FSD Pharma Inc. (CSE:HUGE) (OTC:FSDDF) also announced in February that they would be investing in alternative energy resources. The company signed a non-binding letter of intent with Solarvest BioEnergy, who will be conducting research with their unique algal expression technology. This technology uses algae with a natural ability to photosynthesize to reproduce proteins or, in this case, cannabinoids, which could reduce the energy consumption lighting currently costs the industry.
Whether it is solar power or sunlight alternatives, the demand for cleaner energy will be matched by the cannabis industry itself. As it stands today, our planet only has twelve years to change the direction of our energy consumption if we wish to avoid a climatic catastrophe. If cannabis can be at the forefront of those changes, it can set a precedent for other commercial industries.