At­ten­tion, Pot Smok­ers: Weed Is Not Green

En­ergy Grow oper­a­tions con­sume vast amounts of power “Cannabis use could can­cel out” your “low-car­bon foot­print”

Bloomberg Businessweek (Asia) - - Markets/finance - −Jen­nifer Old­ham

At a Den­ver ware­house, grow­ers wear sun­glasses as they check on 150 topheavy flow­er­ing plants. The 4-foot-tall bushes are flour­ish­ing un­der dozens of blaz­ing 1,000-watt bulbs. “All th­ese things con­sume too much power,” says Paul Isen­bergh, a com­mer­cial real es­tate bro­ker and co-owner of the 3,100-square-foot med­i­cal mar­i­juana op­er­a­tion called Sense of Heal­ing. He ges­tures at equip­ment sur­round­ing va­ri­eties with names like Grape Crush. “The air con­di­tion­ing, the light­ing, the fans, the scrub­ber, the hu­mid­i­fier.”

The $3.5 bil­lion U.S. cannabis mar­ket is emerg­ing as one of the na­tion’s most pow­er­hun­gry in­dus­tries, with the 24-hour de­mands of thou­sands of in­door grow­ing sites tax­ing ag­ing elec­tric­ity grids and un­rav­el­ing hard­earned gains in en­ergy con­ser­va­tion. With­out de­sign stan­dards or ef­fi­cient equip­ment, the fa­cil­i­ties in the 23 states where mar­i­juana is le­gal are re­spon­si­ble for green­house gas emis­sions al­most equal to those of ev­ery car, home, and busi­ness in New Hamp­shire. “Con­sumers seek­ing a green life­style are likely un­aware that their cannabis use could can­cel out their oth­er­wise low-car­bon foot­print,” Evan Mills, a se­nior sci­en­tist at Cal­i­for­nia’s Lawrence Berke­ley Na­tional Lab­o­ra­tory, wrote in an e-mail.

Some oper­a­tions have blown out trans­form­ers, re­sult­ing in fires. Oth­ers rely on pol­lu­tion-belch­ing diesel gen­er­a­tors to avoid hook­ing into the elec­tric power grid. And de­mand could in­ten­sify in 2017 if ad­vo­cates suc­ceed in le­gal­iz­ing the drug for recre­ational use in sev­eral states, in­clud­ing Cal­i­for­nia and Ne­vada. State reg­u­la­tors are grap­pling with how to ad­dress the growth, says Penn­syl­va­nia Pub­lic Util­ity Com­mis­sioner Pam Wit­mer. “We are at the edge of this,” Wit­mer says. “We are look­ing all across the coun­try for ex­am­ples and best prac­tices.”

In­door pot-grow­ing oper­a­tions in 2012 racked up at least $6 bil­lion in en­ergy costs, com­pared with $1 bil­lion for U.S. phar­ma­ceu­ti­cal com­pa­nies, Mills found in a study he did in­de­pen­dent of Lawrence Berke­ley. Pub­lished in 2012, be­fore the in­dus­try ex­ploded fol­low­ing le­gal­iza­tion in al­most half the states and the Dis­trict of Columbia, his re­port re­mains the best gauge of power use in the pot in­dus­try.

Some larger fa­cil­i­ties con­sume as much as $1 mil­lion in power a month. In Colorado, more than 1,200 li­censed grow fa­cil­i­ties are re­spon­si­ble for al­most half of to­tal new de­mand for power. In 2014, two years af­ter res­i­dents voted over­whelm­ingly to le­gal­ize the drug for recre­ational use, grow­ing sites con­sumed as much power as 35,000 house­holds. In Cal­i­for­nia, the na­tion’s old­est le­gal med­i­cal pot mar­ket, in­door pro­duc­tion con­sumed 9 per­cent of house­hold power, the amount used in 1 mil­lion homes, Mills found.

At in­door oper­a­tions such as Sense of Heal­ing, the at­mos­phere is cal­i­brated to al­low grow­ers to reap mul­ti­ple har­vests a year. The in­tense heat from the lights re­quires air con­di­tion­ing and fans to keep grow rooms at 75F, a de­hu­mid­i­fier to pre­vent mold, and a car­bon diox­ide in­jec­tion sys­tem. The elec­tric bill for all this: as high as $5,000 a month. That rep­re­sents

as much as 50 per­cent of an op­er­a­tor’s over­head, yet prof­its far out­weigh costs, with a pound of med­i­cal mar­i­juana fetch­ing about $2,500 on the whole­sale mar­ket, Isen­bergh says. His costs to grow it are only $600 a pound.

Some cities where grow­ing oper­a­tions are le­gal have seen power consumption soar even as com­mu­ni­ties nearby made gains in meet­ing con­ser­va­tion goals. The dis­par­ity prompted sev­eral mu­nic­i­pal­i­ties to tax grow­ers who strain the grid. In Ar­cata, Calif., the lo­cal gov­ern­ment is tak­ing in $300,000 a year from an “ex­ces­sive en­ergy use tax” that went into ef­fect in Oc­to­ber 2013. Vot­ers ap­proved the levy in 2012 af­ter po­lice and fire de­part­ments spent as much as 20 per­cent of their time re­spond­ing to calls at grow­ing oper­a­tions.

The city coun­cil placed the mea­sure on the ballot af­ter Pa­cific Gas & Elec­tric found that 10 per­cent, or 663, of Ar­cata’s house­holds were be­ing used for large-scale mar­i­juana cul­ti­va­tion. Many were re­ceiv­ing sub­si­dized elec­tric­ity rates based on low re­ported in­come, Mayor Michael Win­kler says. “In­stead of hav­ing our elec­tric­ity use go­ing down, we had roughly a 30 per­cent in­crease in elec­tric­ity use in five years prior to the tax,” Win­kler says. The tax caused the num­ber of large home-grow oper­a­tions to fall 90 per­cent, he says.

In Boul­der County, Colo., com­mis­sion­ers levied an en­ergy us­age fee on pot fa­cil­i­ties af­ter dis­cov­er­ing that a 5,000-square-foot op­er­a­tion con­sumed 29,000 kilo­watt-hours a month, about five times more than a typ­i­cal com­mer­cial cus­tomer, says Ron Flax, the county’s sus­tain­abil­ity examiner. Such oper­a­tions send about 30,334 pounds of car­bon diox­ide per month to the at­mos­phere, county sta­tis­tics show. The fee will be used in part to pay ad­vis­ers to help grow­ers be­come more ef­fi­cient. It will go into full ef­fect next year. “We were aware there would be an in­crease in the car­bon foot­print be­cause of this in­dus­try,” Flax says. “We are try­ing to get out ahead of it.” The bot­tom line In Colorado, more than 1,200 li­censed in­door pot-grow­ing sites con­sume as much power as 35,000 house­holds.


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