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Energy Use by the Indoor Cannabis Industry:
Inconvenient Truths for Producers, Consumers, and Policymakers
Evan Mills, Ph.D.
and
Scott Zeramby
Forthcoming in The Routledge Handbook of Post-Prohibition Cannabis Research
Dominic Corva and Joshua Meisel (eds.), 2021
1
(Final Version May 28, 2021)
Contents
Cannabis legalization is necessary but not sufficient for addressing energy waste ....................... 3!
The cannabis conundrum: Drug policy is decoupled from environmental policy ......................... 5!
The environmental footprint of cannabis production: Demonization or double standard? ............ 5!
Externalities compound the social and environmental costs of indoor cultivation ...................... 10!
Adverse public-health considerations and waste generation merit more analysis ....................... 10!
Energy efficiency and renewable energy are not enough to mitigate the problem ...................... 11!
Myths and market distortions bolster environmentally detrimental production practices ............ 16!
The current policy environment increases the energy use of cannabis cultivation ...................... 17!
The case of California: A cannabis-climate train wreck driven by ill-informed policymaking .... 19!
A large research vacuum remains .............................................................................................. 20!
Policy solutions ......................................................................................................................... 23!
Conclusions .............................................................................................................................. 25!
References ................................................................................................................................ 26!
1
This chapter expands on a presentation entitled “Policymakers’ Primer on Addressing the Carbon Footprint of Cannabis
Production,” delivered by E. Mills at the Council of State Governments annual meeting in December 2017 (Mills 2017).
2
Executive Summary
Decades spent in the shadows of the black market precluded opportunities to understand
the energy use of indoor cannabis cultivation and compel the industry to keep its
environmental consequences in check. Although the impacts of outdoor cultivation on
ecosystems have received considerable attention, those associated with vastly more
energy-intensive indoor cultivation have rarely been evaluated and integrated into policy-
making, even in the post-prohibition era. Indeed, indoor cannabis cultivators continue to
be passed over by most energy policy instruments developed since the energy crises of
the 1970s. Moreover, some cannabis regulations are inadvertently driving energy use
upwards, while “financial incentives” for energy efficiency offered to indoor growers by
utility companies subsidize and legitimize polluting activities that could be performed
outdoors with virtually no energy use. These anti-competitive, ill-conceived, and poorly
evaluated policy efforts demonstrate that cannabis legalization is necessary but not
sufficient to address environmental issues.
Even at ostensibly high energy efficiencies and use of renewable energy, indoor
cultivation “optimizes the suboptimal” and cannibalizes renewable energy infrastructure
developed for other purposes, which is untenable in a carbon-constrained world. Outdoor
cultivation—which has sufficed for millennia and could meet all U.S. demand with only
0.01% of current farmland—is the most technologically elegant, sustainable, ethical, and
economically viable approach for minimizing the rising energy and environmental burden
of cannabis production.
This chapter pinpoints blind spots in regulation, outlines research and analysis needs,
argues for consumer information and protections against greenwashing and industry
capture of regulatory and green-certification processes, and offers recommendations for
incorporating energy considerations into the broader tapestry of cannabis policy.
Following are some key needs and opportunities in the policy sphere.
• Improve transparency and require energy-use disclosure that informs
environmental policymakers and other stakeholders.
• Create an improved consumer-information environment, including embodied-
carbon product labeling, and raise the environmental literacy of retailers.
• Eliminate outdoor-cultivation bans, subsidies, loopholes and other anti-
competitive market distortions such as prohibitions on interstate transportation that
favor indoor cultivation.
• Design licensing fees with to encourage best practices.
• Develop equitable and science-based product-testing standards to avoid
unnecessary crop destruction.
• Conduct market-relevant, non-proprietary research to fill information gaps.
• Ban indoor cultivation, or, where deemed politically expedient, mandate
exceptionally high efficiencies and maximal use of on-site solar.
3
Cannabis legalization is necessary but not sufficient for
addressing energy waste
Decades spent in the shadows of the black market created few opportunities to understand the
patterns of energy use associated with indoor cannabis cultivation, let alone compel the industry
to manage consumption and thus keep its environmental consequences in check. Cannabis
production, distribution, and sale involve a myriad of energy uses, some of which are direct and
others indirect (Figure 1). Drivers of energy demand and the associated greenhouse-gas
emissions include creating the inputs and energy used during production, processing, managing
waste, downstream retail activities, and transportation. Key decision-makers and stakeholders
include policymakers, planners, producers, investors, industry analysts, and consumers.
Although the impacts of outdoor cultivation on ecosystems have received considerable attention
(and do not primarily involve energy), those associated with far more energy-intensive indoor
cultivation have only rarely been evaluated and integrated into policy-making, even in the post-
prohibition era. Indeed, cannabis cultivators continue to be passed over by almost every energy
policy instrument developed since the first modern energy crisis of half a century ago. Moreover,
there are many instances of post-prohibition cannabis policies that are inadvertently driving
energy use upwards, while the “financial incentives” for energy efficiency being offered to
indoor cultivators by electric utility companies represent a counter-productive subsidy and
legitimization of a polluting activity that could be done much more sustainably outdoors, which
could meet all U.S. demand with only 0.01% of current farmland.
2
The anti-competitive repercussions of ill-conceived policy and scant evaluation of policy
adequacy demonstrate that legalization is necessary but not sufficient to address the associated
environmental issues. These considerations intersect with more prominent cannabis policy issues
such as taxation, public health and safety, interstate commerce, testing and product labeling,
broader agricultural policy, water resources, and solid waste management. Particularly vexing is
that even the most basic analyses are impeded by lack of rigor and lingering uncertainties about
the structure and drivers of energy use and how far energy-efficiency and renewable energy can
realistically go towards mitigating the associated undesirable impacts. Stemming from
fundamental data gaps, even baseline studies often omit key considerations, and unwittingly
suffer from unquantified biases due to problems with data collection and verification.
This chapter pinpoints blind spots in regulation, outlines research and analysis needs, argues for
consumer information and protections against greenwashing and industry capture of regulatory
and green-certification processes, and offers recommendations for incorporating energy
considerations into the broader tapestry of cannabis policy. The balance of evidence suggests that
even at ostensibly high energy efficiencies and intensive use of renewable energy, indoor
cultivation “optimizes the suboptimal” and cannibalizes renewable resources previously
developed for other purposes, which is untenable in a carbon-constrained world. Outdoor
cultivation—which has sufficed for millennia—is the most technologically elegant, sustainable,
ethical, and economically viable approach for minimizing the rising energy and environmental
burden of cannabis production.
2
Based on NFD’s estimate of 34.4 million pounds/year consumption, 1300 pounds/acre-year yield, and agricultural land area in
the US of 312 million acres.
4
Figure 1. Modes of energy use associated with cannabis production, distribution, and sale.
5
The cannabis conundrum: Drug policy is decoupled from
environmental policy
Few public policy issues are as multifaceted as that of cannabis production and consumption.
Quantifying the energy use and carbon footprint associated with producing cannabis and its
derivative products is one of the primary and least explored policy-relevant questions. When
confined to the black market, this sector could not readily access relevant expertise and
information-sharing networks. However, little progress has been made in the wake of
legalization efforts. To our knowledge, no state has initiated a comprehensive approach to the
problem, and federal engagement is non-existent.
Windowless cannabis factory farms constantly battle local weather conditions to maintain stable
round-the-clock temperatures and pump out acres of electric light brighter than the summer sun,
day or night. Such industrialized cannabis cultivation facilities—whether in Fairbanks or
Phoenix—must simulate and maintain artificially cloudless tropical environments while
suppressing disease-causing humidity year-round. Industrially manufactured carbon dioxide (an
added energy-intensive input and greenhouse gas in its own right, increasing carbon footprint on
the order of 5% -- more if and as energy efficiency improves), is often injected to artificially
boost plant growth. Operating the equipment
3
needed to create and maintain these artificial
environments can require as much energy as a similarly sized data center. Indoor cultivators cite
debatable reasons for this practice: security, a more predictable product, buffering from weather
and other crop hazards, maximized cash flow due to year-round production, the need for fewer
employees, legislative restrictions, and the ability to achieve multiple harvests per year.
4
As with most other environmental issues, those associated with cannabis get “shaded out” by
other seemingly more pressing concerns faced by policymakers (in this case taxation, zoning,
child safety, etc.). Together with the highly technical and complicated nature of how energy is
used in the industry and how to quantify energy efficiency, few policymakers are even equipped
to engage effectively. As a case-in-point, the IRS has been thwarted in pursuing tax-fraud cases
since it cannot readily correlate reported sales volumes with utility bills.
The environmental footprint of cannabis production:
Demonization or double standard?
Energy-intensive indoor cultivation has been conducted within the black market for decades. The
original shift to the practice was, in part, a product of prohibition enforcement efforts that pushed
growers indoors to avoid detection (Silvaggio in this volume). As will be outlined below,
legalization does not intrinsically address the energy issues, and can even compound them by
3
The primary energy users are heating and cooling, dehumidification, and lighting. With conventional lighting, most of the input energy results
in heat generation which needs to be immediately removed by air conditioning. Other miscellaneous energy loads can include irrigation pu mps,
water pre-heaters or coolers, air disinfection systems, motors to operate light-deprivation curtains, and crop dryers. Transportation (during and
after production) and post-cultivation product manufacturing further contributes to energy use and carbon footprint.
4
This latter argument is not material, as outdoor growers using light-deprivation methods also achieve multiple harvests per year. Moreover,
reducing labor intensity is contrary to the job-creation objectives of most policy makers.
6
encouraging the rapid scale-up of indoor facilities and otherwise altering patterns of energy use
in unexpected ways.
Some industry advocates have complained that cannabis is singled out for scrutiny, while other
sectors are left to their devices or otherwise pollute more. This argument is spurious (Mills
2016), as cannabis is in actuality one of the vanishingly few segments of the economy that has
been largely overlooked in energy and environmental policy. Moreover, as is well established in
the climate change mitigation field, there is no “silver-bullet” solution and a multitude of energy
uses must be simultaneously addressed in order to meet society’s important emissions-reduction
targets. It is a false choice to argue that one energy use should be addressed in lieu of another.
There is no single cause of climate change, and thus no single solution. Meanwhile, the cannabis
sector is arguably decades behind the rest of the economy when it comes to energy efficiency. In
any case, adequate technical fixes are unlikely to be available if the demand for extraordinary
levels of artificial illumination persists.
A key starting point for establishing a context for good decision-making is quantifying the level
of energy use and associated greenhouse-gas emissions, and how that compares to other
activities. Until less than a decade ago, no peer-reviewed public-domain assessment of cannabis
energy use had been published. Early work on this question included a national scoping estimate
of the issue based on the largely pre-recreational-legalization policy environment, where
virtually all large-scale cultivation was conducted outdoors and indoor cultivation was
predominantly windowless (Mills 2012). That said, small indoor operations were (and still are)
numerous and generally not designed with energy efficiency considerations in mind.
Based on best-available information at the time, a “bottom-up” model was created based on
interviews with practitioners, equipment retailers, and published guidelines for growers (e.g.,
Rosenthal 2010) (Mills 2012). The boundary conditions (inputs and activities resulting in energy
use and greenhouse-gas emissions) represented only a subset of those depicted in Figure 1. The
per-facility results compared favorably to measured data available for indoor growing operations
and the aggregate energy demand estimates compared well with those subsequently made by
others, including the long-range planning authorities for the Northwest power system (Northwest
Power and Conservation Council 2016).
From a national vantage point, Mills (2012) found that indoor cannabis consumed 20 billion
kilowatt-hours of electricity annually as of a decade ago, with additional amounts from direct
fuel use, together corresponding to 15 million metric tonnes of CO2 released into the atmosphere
each year.
5
This in turn corresponded to an expenditure of $6 billion per year on energy,
nationally, which amounted to 9% of California household electricity use, 3% of total statewide
electricity use (all sectors), and 1% of electricity use nationally. Other independent estimates
have found similar economy-level results. For example, indoor cultivation is estimated to require
0.6% of statewide electricity use (all sectors) in Colorado and 4% in the city of Denver (Hood
2018).
6
Washington State also reports that indoor cultivation is responsible for one percent of the
state’s overall electricity consumption (Jourabchi 2014), a number that has probably risen in the
intervening years. As early as 2004, it was reported that indoor cannabis cultivation was
5
This analysis represented the typical small- to mid-scale indoor cultivation practices of the time and associated energy tariffs.
6
The City of Denver reports that 45% of its total growth in electricity demand stems from cannabis (Walton 2015).
7
responsible for 1% of electricity use in British Columbia (Easton 2004) which was long before
the recreational legalization decision in Canada. Others have estimated cannabis energy use
constitutes 3% of electricity demand in parts of Washington and 0.5 to 1% in Colorado
(Remillard and Collins 2017).
For context, the aforementioned national estimate was equivalent to the emissions of 1.7 million
average U.S. homes or three million cars, and was more than four-times the aggregate U.S.
pharmaceutical industry energy expenditure.
7
While part of this difference arises from the lower
energy prices paid by industrial users compared to residentially-based cannabis producers of the
time, it is noteworthy that the average primary energy intensity of pharmaceutical facilities
(approximately 3,600 kBTU/sf-y) (Capparella 2013) is well below that of indoor cannabis
cultivation facilities at around 5,500 kBTU/sf-y.
8
An additional key finding was that the “energy intensity” (energy use per unit of floor area) in
indoor cultivation facilities was vastly higher than in other common building types (Figure 2).
Figure 2. Cannabis energy intensity from Mills (2012). Reference data from U.S. Energy Information
Administration. Homes (https://www.eia.gov/consumption/residential/). Commercial Buildings
(https://www.eia.gov/consumption/commercial/)
From a regional vantage point, energy use can also be put in context by estimating how it
contributes to per-person carbon emissions in economies where cannabis production is
significant. While cannabis has been referred to as the largest cash crop in the U.S. in dollars
(Gettman 2006), it is particularly significant in California. The implied per-person carbon
footprint for the small populations in many of the cannabis-producing areas is far above the
7
Note that the original study (Mills 2012) put this at six-times, but the value noted here is adjusted for approximately 25% of
pharmaceuticals being consumed by Americans that are produced off-shore (Altstedter 2017).
8
This cautiously assumes that the source of pharmaceutical industry energy is reporting in “site” energy units, i.e., not including
the losses due to the inefficiencies of electricity production in power plants. The source’s estimate of 1,210 kBTU/ sf-year
translates to approximately 3,600 kBTU/sf-year when adjusting for this conversion factor.
8
averages in a state otherwise known for its energy efficiency—closer to that of the most carbon-
intensive “coal” states.
From a consumer vantage point, the energy use for growing one 1-gram “joint” creates 10
pounds of carbon dioxide pollution, equivalent to running ten 10-watt LED light bulbs (or one
100-watt incandescent bulb) for 76 hours (Mills 2012). That’s as much as driving 22 miles in a
44-mpg Prius. Embedded in each average indoor-grown plant is the energy equivalent of 70
gallons of oil. A small “grow house” with ten grow lights consumes approximately as much
electricity as ten average U.S. homes.
All told, the CO2 emissions of the average cannabis user ranges from 16% of their total
household carbon footprint in Rhode Island (the state with the nation’s lowest consumption rate)
where cannabis availability is highly limited to 59% in Colorado (the nation’s highest
consumption rate) where it is pervasive. Put differently, the per-capita emissions are equivalent
to that from powering two high-efficiency refrigerators in Rhode Island and nine in Colorado.
9
From a producer’s vantage point, the cost of energy use varies widely depending on energy
prices, efficiency, growing techniques, and strain choice (Arnold 2011), while the business
significance of the cost depends on the prevailing wholesale price of the finished product. Circa
2012, the average energy expenditure for indoor cultivation equated to approximately one-
quarter to one-half of the wholesale price. As energy prices rise and wholesale prices drop (post-
legalization) this ratio will become increasingly unfavorable and could even become a factor in
the solvency of some producers. Indoor producers have a far more energy-sensitive business
model than outdoor producers or those in other industries, and may find themselves in a boom-
and-bust scenario given the magnitude of energy expenses.
Widespread cultivation in large-scale greenhouses is a relatively recent development. An
analysis of industrial-scale greenhouses found that they, too, are highly energy intensive (Mills
2018), especially if poorly designed and operated. While these “hyper greenhouses” use less
energy than windowless facilities per unit floor area, they still require prodigious amounts of
lighting, cooling, heating, and dehumidification in most climates. As evidence of the issue,
cannabis greenhouses are one reason cited for the need to update high-voltage electricity
transmission lines in Canada (CBC 2019a). Data published by NFD (2018) found greenhouses in
the U.S. to use half the electricity of windowless facilities on a per-square-foot basis, yet, due to
their lower yields, they actually required only 25% less energy per unit weight of the finished
product.
10
An important caveat is that the values reported in that study do not include natural gas,
which is a common heating fuel for greenhouses while heating in windowless facilities is often
provided with electricity. An assessment in Canada found that greenhouses used only about one-
third less energy than windowless facilities (Posterity Group 2019). The data thus suggest that
these greenhouses are anything but “green”, as their energy use per unit floor area still tends to
be greater than that of virtually any other commercial building type.
9
Per-capita cannabis consumption from MJ Business Daily (https://mjbizdaily.com/chart-of-the-week-average-annual-mmj-
purchases-by-state-vary-widely/ ). State-specific household emissions from U.S. Department of Energy, Energy Information
Administration. Assuming cultivation carbon footprint per Mills (2012).
10
Average reported values were 0.79 grams of dried flower yield per kWh for indoor facilities and 1.07 grams/kWh for
greenhouses. Values elsewhere in the NFD report suggest the greenhouses were even less favorable.
9
A more recent attempt to estimate national energy consumption demonstrated many of the
challenges of such analysis (NFD 2018). Of note, the energy used for outdoor as well as
greenhouse operations was usefully contrasted with that of windowless indoor facilities, and that
of legal and black-market production estimated separately. The report admirably brought forward
more measured data on specific facilities than previously available in the public domain,
although the sample was small (only two dozen sites with energy and yield data), self-selected,
and self-reported. Almost one third of the sites used LED lights for energy savings, likely far
higher than the proportion of sites adopting this technology in the overall marketplace. The
analytical scope had narrower boundary conditions (excluding energy sources other than
electricity within the facility as well as transportation energy, and cultivation in perhaps more
energy-intensive non-industrial settings such as homes and other informal “small-scale”
facilities), did not include off-grid operations often reliant on diesel generators, and was based on
a non-randomized sample weighted towards milder climates in the United States. The energy
intensity of black-market operations was presumably equated with that of legal operations,
embodying an assumption of equivalent efficiencies not verified with actual data. Meaningful
direct comparisons to the Mills (2012) study are thus not possible given the narrower boundary
conditions and non-representativeness of the sample. The study indicated that some energy-
intensity metrics may be improving with the passage of time, as would be expected, although
more definitive surveys are sorely needed. Of particular note, the NFD study found roughly a
factor of ten variation in key energy intensity metrics (electricity per square foot and per unit of
flower yield), indicating enormous non-standardization of existing practices and a
correspondingly large potential for energy savings irrespective of historical trends. It is not yet
known whether the carbon intensity of today’s legal production facilities is lower or higher than
that of earlier operations, but the recent work of Summers et al., (2021) suggests not.
* * *
There is increasing recognition of the need to manage energy use in cannabis cultivation. While
it is encouraging to observe a variety of organizations developing environmental product labeling
for cannabis, the methodologies often lack transparency and there is little or no direct recognition
of excellence or penalties for underachievement. Organizational factors create real or perceived
conflicts of interest (financial dependence on the industry and users of the product being
evaluated, lack of an independent watchdog, and a chronic tension between profit or market
share and rigor among certifiers which can result in the dilution of standards). It has been
reported that growers will “shop” for certifications that put their product in the best light
(Bennett 2019).
Despite nascent certification and labeling systems, consumers are largely unaware of the energy
and environmental impacts of indoor cultivation. It is notable that the “ethical purchasing”
movement (consumers seeking to vote with their dollar, e.g., to promote sustainable products)
has barely appeared in the cannabis marketplace and, perhaps fearing stigmatization,
environmental organizations have conspicuously sidestepped the issue (Bennett 2019).
Moreover, cannabis dispensaries have been found to be unreliable sources of information on
environmental issues associated with the products they sell and existing sustainability
certifications for cannabis are underdeveloped, vulnerable, and lack credibility (Bennett 2017;
Bennett 2020, in this volume). Consumers thus operate in an information environment that
impedes good purchase decisions.
10
Externalities compound the social and environmental costs
of indoor cultivation
In addition to the policy community’s need to better understand facility-scale energy use,
cannabis operations have various externalities (side effects not reflected in the prices of goods
sold) that are not often considered or quantified.
These include moisture damage to buildings, nighttime light pollution, power plant emissions
and other environmental impacts, power theft, and power outages and other constraints on the
broader grid caused by unchecked electrical load growth. As an example of this latter issue, the
city of Portland Oregon associated seven power outages over a period of five months with indoor
cannabis operations (Pacific Power 2015) and Portland General Electric traced 85% of its
residential transformer problems to indoor cannabis growing (Borrud 2015).
In 2010, British Columbia reported that power theft by two thirds of cannabis producers was
costing the utility $100 million per year (BC Hydro 2016). At that time cannabis was legal only
for medical purposes, and most offending facilities were serving the black market.
Unpermitted or uninspected electrical wiring has been the source of a disproportionate number of
fires in some localities, and the building stock has been damaged by mold and other
consequences of raising humidity in buildings not intended for agricultural operations (Fire
Chiefs Association of British Columbia 2008; Mills 2012). Massive fires have occurred even in
legal facilities (Reuters 2015).
Cultivating cannabis in areas based on hydro power is often touted as an environmentally benign
alternative to carbon-based power. However, attention has recently been given to the likely
linkages between hydroelectric power production, reduced salmon populations, and starvation
issues facing salmon-eating killer whales (orcas) in the Pacific Northwest (Mapes 2018;
University of Massachusetts 2017). Hydroelectric power also results in substantially more water
evaporation than other forms of electricity production.
Adverse public-health considerations and waste generation
merit more analysis
Another form of externality—public health impacts related to energy-intensive cultivation
practices—also merits close analysis. Cannabis has been widely demonstrated to offer medical
benefits under the appropriate circumstances. However, the countervailing health-related
dimensions of indoor cultivation—for workers and the general public—have not received much
attention, although it is treated elsewhere (Schenker and Langer in this volume).
Indoor environmental conditions can be an issue for workers and consumers. For example, while
mold is a common risk to product viability for indoor and outdoor cultivators alike, indoor
environments can be particularly prone to mold growth that can destroy an entire crop. The risk
is especially high during power outages or equipment failures when ventilation and
11
dehumidification processes are interrupted. Researchers have noted the potential health risks to
workers of the high levels of VOCs (terpenes) emitted from cannabis plants (Plautz 2019). In
another example, doubling or quadrupling of current background carbon-dioxide levels (up to
1500 ppm, to force growth) was once believed to be safe for humans but has subsequently been
found to result in CO2 levels found to significantly reduce nine distinct measures of cognitive
and decision-making functioning (Fisk et al., 2013; Allen et al., 2015). Combustion products,
such as carbon monoxide, from unvented on-site CO2 production can also pose health hazards.
Concerns have been raised about the effect of large concentrations of plants in urban areas
adversely impacting air quality through their emissions of volatile organic compounds (VOCs),
which catalyze other air pollutants. A recent investigation determined that 600 cultivation
facilities within the city of Denver Colorado could double the prevailing levels of VOCs, while
air pollution in that city already periodically violates federal limits (Wang et al., 2019).
More broadly, energy production itself has well-known health consequences, and of course is the
primary source of human-generated greenhouse gases which bring their own health impacts.
Mills (2012) estimated national greenhouse-gas emissions of 15 metric tons of CO2 each year
from indoor cannabis cultivation across the United States. Outdoor practices can also result in
greenhouse-gas emissions from land-use change and chemical fertilizers.
Hazardous wastes associated with indoor cultivation are also understudied. The “high-intensity
discharge” lamps used for most cultivation contain significant amounts of mercury (~40
mg/lamp). The extent of recycling/recovery of this mercury is unknown, and broken lamps
introduce mercury into the growing facility in an uncontrolled fashion. More costly LED lights
do not contain mercury. However, recycling programs for LED fixtures are not yet in place.
Indoor practices involving hydroponics (or even traditional irrigation) yield contaminated
wastewater that may be introduced into or circumvent wastewater systems. Moreover, non-
degrading growing media, such as mineral wool that is saturated with nutrient-laden water, is
typically sent to landfill after each harvest. We estimate that an operation with 100,000 square
feet of canopy requires 14,000 to 34,000 cubic feet of mineral wool per cycle, which would
result in the generation of approximately to 85,000 to 200,000 cubic feet of solid waste to landfill
over a year with six growing cycles. For perspective, this results in waste generation of 5- to 11-
times the weight of the processed flowers.
11
Recycling of agricultural mineral wool is not
currently available in the U.S. Indoor operations also tend not to re-use soils after each growth
cycle, which is yet another large source of solid waste.
Energy efficiency and renewable energy are not enough to
mitigate the problem
A key challenge intrinsic to the indoor cultivation process, and compounded by seemingly
unrelated local ordinances or needs, is that these facilities tend to embody a number of
counterproductive design and operational features that make energy use even higher than need
11
See assumptions below in the discussion of mineral wool embodied energy.
12
be. For example, CO2 injection requires facilities to be sealed and all air recirculated, which, in
turn, boosts energy use significantly. Another example is the sometimes-mandated use of tall
opaque walls in front of greenhouses in the name of security which can also block useful sunlight
and thus require added electric lighting energy input. Location of these facilities in or near
population centers requires high-resistance air filtration to control odor, which, in-turn requires
increased ventilation energy to counteract the backpressure caused by the dense filter media.
Heat is often run at the same time as air conditioning in an effort to control humidity that can
otherwise lead to mold growth. Lastly, local light-pollution ordinances may require that light-
deprivation covers be drawn over greenhouses at night (light may be on during that time, e.g.,
when the days are short or to capitalize on cheaper power rates), which can trap heat and thus
require additional cooling energy. Lastly are a host of energy-using technologies to remove mold
with UV, treat polluted water, recapture and purify waste water, etc., that are ironically used to
improve the “sustainability” of indoor cultivation.
Despite these challenges, the industry has begun to look for efficiencies, likely driven more by
the squeeze between falling wholesale prices and rising energy costs than by environmental
concerns (Pols 2017). Aside from efficiencies (e.g., energy used per given weight of finished
product), it is critical to maintain focus on trends in aggregate demand, especially for a growing
industry. For example, Colorado reports a startling year-over-year increase of 23% in overall
production (Hood 2018) and that electricity use increased by 36% annually between 2012 and
2016 (Denver Public Health and Environment 2018). Energy efficiencies cannot improve rapidly
enough to offset such growth, and the preceding numbers suggest that energy intensity has
actually been increasing. The energy forecasting authority in the Pacific Northwest projects an
82% increase in energy demand despite improving energy efficiency (Jourabchi 2014). A large-
scale energy savings study for the province of Ontario, Canada, found a maximum technical
potential of only 16% energy savings for indoor facilities and 21% for greenhouses (without
accounting for limited uptake rates or cost-effectiveness) (Posterity Group 2019).
Sleek images of energy-saving LED lights and greenhouses look “green” on the surface, but the
devil is in the details. These lighting systems are still quite energy intensive.
12
One experiment
found that 780 Watts of LED were needed to replace 1000-1100 watts of traditional lighting
(Massoud 2014) in order to maintain yields. Peer-reviewed research dating from the time these
alternative lighting sources began being manufactured suggested that cannabis grown under
LEDs may actually take longer to mature and have lower yield and/or potency (Pocock 2015),
thus saving little if any energy on a per-weight basis (Nelson and Bugbee 2014). LED
performance in these applications appears to be improving, although even more recent studies
obtained mixed results (Leichliter et al., 2018). However, product attributes (flower appearance)
may be adversely affected by LEDs, which is a palpable market risk for producers. The up-front
cost of LED lighting is also vastly higher than conventional lighting, the recovery of which
requires a long time-horizon for the facility developer. Although the vast majority of indoor
cultivation facility space has been constructed since LED fixtures have been available in the
market, adoption rates are probably in the low single-digit percentage range. The aforementioned
in-depth analysis for Canada found that the technical potential energy savings for LED lighting
(without regard for cost-effectiveness or limited adoption rates) was only 7% of entire facility-
12
One advantage of less-efficient high-intensity discharge lamps is that the heat-producing ballasts can be placed outside the
conditioned space, reducing air-conditioning needs. LED ballasts are integral to the fixture and cannot be remotely located.
13
level energy use (Posterity Group 2019). These barriers notwithstanding, it is certainly possible
to construct cultivation facilities with far higher energy efficiencies than is done at present.
Indications of these opportunities as applied to the facility envelope and daylighting are provided
a decade ago by Kinney et al. (2012).
That said, there is naïve optimism and hubris that cultivators need only “go solar” meet
remaining energy needs after efficiencies have been captured. The feasibility of this has not been
demonstrated at scale, probably because the required solar array would need to be many times
larger than the roof of the facility, and of course could not be on the roof at all if a traditional
greenhouse design is used. Even in areas with excellent solar availability, only about 5% of a
facility’s electricity needs could be generated on the roof (Mills 2018). One noted large-scale
facility aiming to be as sustainable as possible achieved a solar contribution of about 30%
(Daniels 2019), which presumably required using a very large area of land beyond the building
footprint. A ‘state-of-the-art’ facility in Canada is projecting to offset only 8% to 10% of its
electricity use by covering its entire roof (CBC 2019b), emitting approximately 9,000 tons of
CO2 per year instead of 10,000 tons without the solar. Among the nation’s largest proposed
facilities, with 2.4 million square feet of enclosed “cannabis industrial park”, would only provide
4% of the needed electricity from its rooftops, despite being in an optimal solar resource area on
the California-Arizona border. Meeting the full electricity demand would require approximately
1,400 acres of photovoltaic panel area.
13
An 80-megawatt dedicated natural-gas powerplant is
instead proposed to provide energy (Kidder Mathews 2019). Such a generator would need to
produce 1.23 TWh-y, enough to power 90,000 average U.S. all-electric homes (Figure 3).
Figure 3. Hypothetical solar PV area requirements for proposed cannabis industrial park.
13
Array area range represents the annual electricity intensity (kWh/square foot) estimated by Mills (2012), similar to that
measured in nearby Nevada (NFD 2018). Solar output per unit area estimated by Sage Energy using Helioscope software.
14
While it can be argued that cannabis industry could be powered with centralized renewable
energy, the amounts required are prodigious and for practical purposes (e.g., land-use
constraints) rarely achievable.
As a case in point, although California’s Coachella Valley is one of the largest wind-energy
production areas in that state, cannabis production there (assuming business-as-usual energy
efficiencies) will soon eclipse the entire output of all 40 wind-power projects located in the area
(Figure 4).
Our “bottom-up” estimate is that projects already in operation in the Coachella Valley region
consume 13% as much as wind energy in the region produces, although other estimates (Daniels
2019) suggest cannabis facilities in the “west side” of Coachella Valley consume 235 megawatts,
which is fully 35% the rated capacity of all wind projects in the area, and far more on an energy
basis. Full build-out of existing cannabis facility entitlements would consume far more: 11-times
as much electricity as can be produced by all existing wind systems in the area, and more than all
the wind power generated across California. It has taken decades and the dedication of vast land
areas to build up this level of wind-generation capacity. From a broader public-policy vantage
point, there is an acute shortage of investment in renewable energy infrastructure to offset even
existing carbon emissions, let alone emissions growth from new energy-intensive development.
This comparison is a poignant illustration of the broader problematic tension between advances
in renewable energy supply and unbridled growth in energy demand.
15
Figure 4. California’s Coachella Valley is the site of 10% of the State’s wind energy production. Cannabis
cultivation facilities already in operation in five cities within the Coachella Valley require the equivalent of 13% of
the entire electricity production of the 40 wind energy projects (2,229 turbines) located throughout the valley. This
will grow to more than 70% of the area’s total wind energy output upon completion of projects proposed or under
development. Full build-out per existing entitlements will consume eleven-times as much power, significantly
exceeding the 14 TWh/year generated by wind power in all of California. Photos: (a). Wind turbines from
ecoflight.com, with permission. (b). Satellite view from Hoen et al. (2018), public domain. (c). Cultivation facility
photo by the authors. (d). Rendering of Venlo-type glasshouse by Sunniva (under construction), with permission.
14
14
Calculation notes: Estimated cultivated area development status in five Coachella Valley cities based on Simmons (2019), with
350,000 square feet of “canopy” as of April 2019, 19.4 million square feet proposed or under development, and 30 million square
a. 2,229 wind turbines in Coachella Valley, CA
b. 663 megawatts of wind power across 40 projects
d. Indoor cannabis facility, Cathedral City, CA
Coachella cannabis energy:
in development or proposed (10.4 TWh/y)
Coachella wind energy in 2019:
(1.5 TWh/y)
Coachella
cannabis
energy: 2019
(0.2 TWh/y)
California wind energy in 2018
(14.2 TWh/y)
Coachella cannabis energy:
build-out with entitlements (16.1 TWh/y)
c. Large-scale indoor cannabis cultivation
e. Relative scale of electricity supply and demand
16
Myths and market distortions bolster environmentally
detrimental production practices
Among the fundamental preconditions for “perfect functioning” of markets is a vibrant
information environment for all actors. Unfortunately, energy-relevant information in the
cannabis industry is incomplete and often incorrect. One long-standing “myth” is that indoor-
cultivated cannabis is superior to its outdoor counterpart. This is a commonly held view in the
popular culture, and dispensaries are notorious for “bottom-shelfing” outdoor-grown products as
inferior and otherwise favoring and steering customers towards indoor-grown products. Industry
experts have argued to the contrary (San Francisco Bay Guardian 2011) and medical cannabis
produced by the U.S. government is cultivated almost exclusively outdoors.
15
Economic signals can also distort markets. Energy utilities earn billions of dollars per year from
cannabis cultivators. While utilities play a key role in improving energy efficiency in the
economy at large (assuming that policymakers ensure that investing in new energy supply is not
more profitable than investing in efficient use), utilities benefit far less from outdoor cannabis
cultivation and have not been observed to encourage it.
In some areas, indoor cultivators receive the historically low, subsidized electricity prices
enjoyed by traditional outdoor farmers (PG&E 2017). Many agricultural customers also receive
industrial rates,
16
which are lower than those paid by occupants of other types of buildings
(warehouses, data centers, offices, etc.). Subsidies of this sort to indoor growers make them more
competitive against outdoor growers while artificially suppressing the profitability of making
energy efficiency improvements or investment in renewable energy supply.
Conversely, in order to discourage indoor cultivation, some well-intended policymakers have
sought to impose extreme electricity surcharges (The Arcata Eye 2012). In practice, however, the
expected effect could be to merely trigger relocation. This may “solve” the locality’s problem,
but does not address global energy concerns and can even push cultivators off-grid and onto even
more polluting diesel generators for power.
In other contexts, good public policy has often included financial incentives for energy efficiency
(rebates, tax credits, etc.). However, in this context, far greater energy savings can be obtained
by shifting to outdoor cultivation. A perspective must be maintained that even super-efficient
indoor facilities are highly energy intensive when compared to other building types (imagine the
values in Figure 2 being reduced by, say, 75%). Outdoor producers are disadvantaged when their
well-funded indoor competitors are subsidized with efficiency incentives such as rebates that are,
in turn, paid by consumers through utility tariff “adders” (the traditional way of financing utility
feet entitled. Energy intensity is that calculated by Mills (2012). Note that while NFD (2018) cites lower average electricity
intensity for some states, their value for the adjacent desert state (Nevada) in their sample is virtually identical to that used here
for a California desert location. Wind energy generating capacity values are from Hoen et al (2018) and associated energy
production from California Energy Commission (2019a): average wind energy production rates for 26 projects (475 MW) in the
area (2.23 GWh/MW) are applied to the total installed 663 MW for the area to estimate total electricity production.
15
See https://pharmacy.olemiss.edu/marijuana/
16
See https://www.eia.gov/todayinenergy/detail.php?id=16231
17
rebate programs). Such incentives arguably disrupt market forces that could otherwise lead to
optimally reduced energy use.
Investor roles in indoor operations also have an impact. Enormous cash infusions following
initial public offerings of stock can disincentivize efficiency, particularly if investors are
unaware of best practices or unequipped to evaluate the adequacy of cultivation practices. Losses
arising from inefficiency of energy use (or other inputs) can be camouflaged by lack of
transparency, investor ignorance of energy engineering, and the readiness of investors
compensate for shortfalls. An example of this is Canopy Growth Corporation, who, despite
shrinking gross margins and being unable to post a profit from their primarily indoor-cultivation-
based business was still able to attract a $4 billion investment from Constellation Brands (Alpert
2019). Compounding these problems, cultivation-facility investors tend not to have the time
horizons needed to amortize energy efficiency or renewable energy investments. More broadly,
“green investment” funds must think twice before including carbon-intensive cannabis stocks.
The current policy environment increases the energy use of
cannabis cultivation
Prohibition was previously blamed for the environmental impacts of cannabis cultivation, but the
reality is far more complicated (Vitiello 2016). Indeed, owing to the lack of coordination
between cannabis policy and environmental policy, decisions are inadvertently being made in the
post-prohibition era that are compounding the energy problem.
That said, there are ample reasons to pursue regulation. For example, historically, some black-
market growers have been rumored to leverage the fact of their undocumented income to take
advantage of low-income electricity tariffs. This not only created an unintended cross-subsidy
from other ratepayers, but the low rates also reduced their incentive to invest in energy efficiency
or shift cultivation outdoors.
Local control of cannabis market regulation (e.g., at the city or county level) can lead to perverse
outcomes that distort broader market conditions. For example, as noted above, the Coachella
Valley in southern California has become a major hub of production due to the absence of caps
on facility size, local efforts to promote the industry, and a generally permissive regulatory
environment. Conversely, local ordinances set a very large minimum size for facilities at five
acres (over 200,000 square feet) (Maschke 2018). As a result, very large-scale indoor cultivation
is taking place in this extremely hot region, requiring far more air conditioning than in climates
more naturally suited for cultivation. An engineer working in the area is quoted as estimating that
cannabis cultivation facilities use about 25-times as much energy as a “standard industrial”
development (Daniels 2019).
Perversely, there are many reports of localities banning outdoor cultivation as part of their
legalization process, examples of which include Nevada County, California (Riquelmy 2016)
and the entire state of Illinois (Thill 2019). Regulations also require all production to occur
indoors in Canada (CBC 2019b). These measures are presumably taken with security in mind.
18
Yet, if giant internationally sanctioned opium poppy plantations for pain-management drugs can
be secured outdoors (Bradsher 2014), surely cannabis farms can do so as well.
License fees are typically assessed on a per-square-foot basis and some localities stipulate equal
limits to the allowable cultivation area for indoor and outdoor cultivation, thus strongly biasing
choices towards high-density, energy intensive indoor operations where more crops can be
produced each year.
Local officials and others have cited the odors arising from outdoor cultivation as a significant
problem, and suggest the activity be restricted to indoor facilities (Johnson 2019). This of course
also entails the implementation of high-resistance air filters for odor control which, as noted
above, increase ventilation energy needs. This concern may be unfounded, as massive VOCs
measured in the Denver regional air basin have been traced to indoor grow operations (Wang et
al., 2019).
Providing an example of the aggregate effect of these market distortions, an estimated 80% of
licensed cannabis production in California is conducted indoors (McVey and Cowee 2018). Once
indoor cultivation is endorsed (or mandated), it becomes incumbent on policymakers to ensure
that the resultant energy use is not excessive. Virtually all building types and the equipment in
them are subject to energy codes and standards in the United States, yet comprehensive ones
appropriate for cannabis cultivation facilities have not been promulgated and the supporting
research essential for standards analysis has not been conducted. Massachusetts is among the
early states to grapple with this. The state has determined that a single (massive) indoor
cultivation facility could result in an increase in lighting demand equal to the energy saved over
many years by the state’s effort to convert over 130,000 streetlights from conventional high-
intensity lamps to LEDs.
17
However, the state’s efforts at setting energy standards have been
clumsy, e.g., seeking to specify wattage limits on individual light fixtures, which could easily
result in operators installing more fixtures than would otherwise be the case (Davis 2019a).
In another example of unintended energy consequences, mandatory product testing--which is
certainly a potentially appropriate policy intervention—can uncover long-standing practices that
yield unacceptable contamination levels in the final product. Tainted cannabis products must be
destroyed, thus entailing all associated energy to be reallocated to materials that pass testing. The
safety thresholds stipulated by the regulations are not necessarily based on scientific study, and
nor are they consistent with standards for other consumer products. For example, there are no
standards or testing for heavy metals in tobacco, despite it being known to contain them, yet
testing is done at the parts-per-billion level for cannabis. Researchers have described the lack of
studies on the health risks of heavy metals in tobacco (Caruso et al., 2014).
Some previously black-market cultivators have found the new permitting processes under
legalization to be onerous and so time-consuming that they cannot transition their businesses to
the regulated market. This already appears to be having the effect of driving some legal
producers back to the black market, and thus away from access to policy inducements for
environmentally improved practices. As of April 16, 2019, roughly 3,000 temporary cultivation
17
Cannabis Energy Overview and Recommendations, MA Department of Energy Resources Energy and Environmental Affairs,
2/23/18, slide 6.
19
permits had expired and the California Department of Food and Agriculture (CDFA) had issued
only 62 annual licenses and 564 provisional permits. Reports indicated that less cannabis was
sold (legally) in the year after recreational laws went into effect than before. As an indicator of
the size of the black market, the most recent official estimates of California’s cannabis
production, a report published in 2018 by the California Department of Food and Agriculture,
showed the state producing as much as 15.5 million pounds of cannabis and consuming just 2.5
million pounds (ERA Economics 2017). The balance is presumably illegal export to areas where
prevailing retail prices are higher.
Even where states legalize cannabis cultivation, localities that thwart implementation further
reinforce black-market activity. For example, there are many counties in California where a
public majority voted to legalize cannabis yet local government has banned most if not all
cannabis-related business activities. According to Schroyer and McVey (2019) only 161 of
California’s 482 municipalities and 24 of the 58 counties allow commercial cannabis businesses.
Illinois—the most carbon-intensive cannabis producer in the U.S. (Summers et al., 2021) has
banned outdoor cultivation statewide.
A key example of the consequences of a resurgent black market are that off-grid cultivation
using diesel generators results in an even higher “carbon footprint” (carbon per unit of electricity
produced and consumed) than the electric grids in many areas -- e.g. 2.5-times higher in the case
of California (Mills 2012).
Relevant to indoor and outdoor cultivation alike, cannabis regulatory practices also
counterproductively influence transportation energy use. In the California regime, for example
the product is typically transported at least four times between the point of cultivation and the
point of consumption. Regulations require farmers to transport their product to processors, who
then transport to distributors, who then transport to dispensaries. Retail consumers then transport
the final product from the dispensary. Shipments of only 25 to 40 pounds between farmer and
processor are not atypical. The amounts transported become progressively smaller along the
supply chain, which multiplies the amount of embodied transport energy per unit weight.
Transport energy notwithstanding, one fundamental policy barrier to reducing energy use is
restrictions on interstate commerce. A comparison of electricity use per unit yield in seven states
found a variation of 3.4-fold and that for greenhouse-gas emissions of 26-fold, and this did not
include the full range of climate severity or power plant emissions factors seen across the whole
country (NFD 2018). Were the nation’s supply of cannabis grown in climatically benign
locations, energy use would be vastly reduced as would pressures to grow indoors.
The case of California: A cannabis-climate train wreck
driven by ill-informed policymaking
California is a beacon of progressive environmental thought and has long been an engine for
innovative environmental technologies and policies. State legislators have passed some of the
most far-reaching climate change policies and targets in the world, notably the California Global
20
Warming Solutions Act of 2006 (SB-32), designed to reduce statewide greenhouse-gas emissions
to a level 40% below 1990 levels by the year 2030.
18
Yet, the regulatory structure established for the cannabis industry now works at cross-purposes to
these overriding goals (Mills 2019). Seemingly prior to any rigorous analysis of energy impacts,
the state inexplicably dictated that indoor cultivation was integral to the broader goal of
legalization, creating a preordained legal “purpose” that seemingly cannot be questioned by
subsequent environmental considerations. This binding purpose led to the explicit rejection of
“environmentally superior” outdoor cultivation alternatives identified in the official
Environmental Impact Report (EIR), despite a recognized lack of data that precluded more than
cursory quantitative environmental impact analysis (California Department of Food and
Agriculture 2017) and conclusions in other official reports that environmental impacts would be
“negligible” (Bureau of Cannabis Control 2017).
The EIR takes several leaps of faith to conclude that the legalization program will be
“beneficial” towards attaining the State’s greenhouse-gas emission reduction goals. They achieve
this feat by assuming, remarkably, that overall cannabis production levels would not rise
materially following legalization, while the legal fraction of production will increase from
approximately 5% to 10% of statewide totals (the rest remaining in the black market) and that
this increment will automagically conform with the state’s SB-32 emissions-reduction target thus
rendering aggregate emissions slightly lower than without legalization.
The net effect of these analytical contortions—juxtaposed with the market and policy failures
outlined earlier in this chapter, particularly the forcing of indoor cultivation in many local
jurisdictions—is that California has thus far failed to grasp a rapidly closing window of
opportunity to manage energy use and greenhouse-gas emissions from the cannabis industry.
Few localities have made efforts to manage energy use and emissions (California Department of
Food and Agriculture 2017). A highly limited building energy standards-setting process is slowly
being explored, but the earliest date for possible implementation will be 2022 – a full 25 years
after the state’s initial legalization of cannabis for medical use (California Energy Commission
2019b).
A large research vacuum remains
Although it has been many years since the energy issues of cannabis cultivation were first
identified (Mills 2012), very little subsequent research has been conducted and thus
policymaking proceeds in an information vacuum. Contributing to this problem, the cannabis
industry and energy suppliers are not always forthcoming with information about current
practices, and are selective about what they do release. Early work pointed out the need for open-
source energy benchmarking using measured data (Mills 2012). Some studies have come
forward with information of this sort, often with small samples limited to a certain region or type
of cultivation (e.g., County of Boulder 2018) while other efforts are pooling and standardize the
information, although based on self-selected participants and limited public access to the
18
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160SB32
21
proprietary data.
19
Also needed are improved estimates of market-scale drivers (numbers and
types of cultivation facilities, consumption trends, etc.) Much more data (and modeling) are
needed to get a strong handle on trends in national energy use associated with indoor cannabis
production, and to understand the potential for improved energy efficiency and greenhouse-gas
reductions. More broadly, measured data alone does not help improve efficiency unless it
compels the adoption of improved practices and technologies.
Among the critical policy-relevant questions remaining unanswered:
Are newer large industrial-scale facilities more or less energy efficient than traditionally
smaller indoor cultivation practices?
No definitive data have been presented in answer to this question. On the one hand, more
efficient heating and cooling systems can be expected, but on the other hand higher
ceilings and wider lanes for vehicles and equipment result in far greater volumes of air
being space-conditioned. Pressure for maximum yields, which includes six or more crops
per year, may also entail greater aggregate energy inputs but less per final unit weight.
How much energy is used in manufacturing extracts and other derivative products?
These processes can be energy intensive, involving equipment that creates high pressures
and temperatures, post-processing, etc. In some cases, raw materials are frozen and stored
prior to extraction, using added energy. Post-harvest freezing becomes more likely when
there is oversupply or inertia in bringing fresh product to market due to over-production
or policy obstacles.
What is the added water burden of indoor cultivation with respect to electricity production and
wastewater treatment?
Conventional wisdom is that less direct irrigation water is needed for indoor cultivation,
thanks to reduced evaporation, and irrigation efficiencies may be improving with
industrialized processes. However—and of particular relevance to the many drought-
stricken parts of the country—the massive amounts of water steadily evaporated from
dams and cooling towers while producing the electricity destined for indoor cultivation
facilities vastly exceeds the direct irrigation water needed to grow outdoors. Based on a
rule-of-thumb of one gallon of water per plant per day and the water intensity of average
U.S. electricity production at the electricity intensities of Mills (2012) and seven liters of
cooling water per kilowatt-hour (per Torcellini et al., 2003), indoor cultivation indirectly
consumes about 18-times as much water (~1300 gallons per plant) as the amount used for
direct irrigation. Amounts will vary locally depending on practices and electric
generation mix in the grid. Ironically, the most water-intensive mode of electricity
production is otherwise environmentally lower-impact hydroelectric power. Meanwhile,
the greenhouse-gas emissions associated with the electricity used to power indoor grows
are fueling future droughts. The demands on wastewater treatment plants (and their
energy use) must also be considered.
19
See https://powerscore.resourceinnovation.org
22
How much energy and emissions are embodied in inputs, equipment, and facilities used for
cultivation?
The energy use in making soils (or single-use growing media), soil amendments, and
pesticides for cannabis production has not been quantified. Nor has that for constructing
facilities and the mechanical equipment that goes into them. Soils or other growing media
are typically discarded after each indoor growing cycle, making this an ongoing stream of
solid waste and embodied energy. As an illustration, we estimate that the mineral wool
often used as a growing media in hydroponic indoor cannabis-cultivation operations
increases the overall carbon footprint of the final cannabis product by approximately 5%
to 11%, depending on cultivation practices (and likely more given that it is manufactured
in areas with substantially higher electricity-related greenhouse-gas emissions than those
assumed here).
20
In another example, peat that is mined as a soil amendment destroys an
important stable carbon sink in the environment. Meanwhile, agricultural activities of all
kinds consume about a billion pounds of plastic, a petrochemical product, annually in the
United States alone (Grossman 2015).
How much energy is embodied in producing cannabis products that never reach market?
The cannabis industry has been engaging in overproduction. Recent reports from Canada
indicate extraordinary levels of overproduction, with only 4% of cannabis produced there
reaching the market (McBride 2019). Technical problems during cultivation cycles
(temperature excursions and mold outbreaks) can result in total crop losses, and, for black
market actors, interdiction also results in product not reaching the market. Product failing
quality testing must be destroyed. The additional energy consumption associated with
these factors has yet to be estimated but could be very significant.
How much transportation energy is involved, and how can that be minimized?
The smaller the quantity of cannabis transported the greater the per-unit transportation
emissions. In the original 2012 study (Mills 2012), transportation energy amounted to
about 15% of the total carbon footprint. Vertically integrated operations (with co-located
production, processing, and retail) may well reduce transportation energy requirements.
What is the ongoing role of black-market cultivation, which escapes measurement?
There is a tendency to assume that with legalization “all” production shifts to a new
footing. In practice black-market cultivation has remained dominant, and may well have a
distinctly different energy and carbon profile than industrialized operations. Misdirected
policy measures appear to be enlarging the black-market share of total production, which
escapes regulation altogether. In California, for example, permitting has resulted in large
amounts of paperwork and long periods of suspended operations. Fees in that state for a
20
Per Mills (2012), the grid-based electricity related emissions of CO2 are 8.1 kg CO2 per square foot for each indoor cannabis
growth cycle. Per Bribian et al., (2010), the lifecycle emissions of mineral wool are 1.511 kg CO2 per kilogram for average
European conditions. This emissions factor depends heavily on electricity generation mix. A value of 2.736 was determined by
Aivazidou (2013) for conditions in Greece (where the electric system is heavily dependent on lignite coal). Much U.S.
manufacturing occurs in Mississippi and West Virginia, where electricity-related CO2 emissions are much higher than U.S.
averages, which, in turn, are substantially higher than European-average emissions upon which Bribian et al’s analysis is based.
Mineral wool usage calculations are based on specific weight of 1.8 kg per cubic foot of mineral wool (per Grodan
manufacturer’s specs) and a range of material use in cultivation of 0.14 to 0.34 cubic feet (0.26 to 0.61kg) per square foot of
growing area per growing cycle. This yields 0.38 to 0.92 kgCO2/sf-cycle, or 5 to 11% of the energy-related emissions. This
analysis generously assumes that yields are two pounds per light per cycle in industrial grow operations.
23
“medium” indoor facility (10,001-22,000 square feet) can be $80,000 per year, which can
discourage participation in the regulated market (Bodwitch et al., 2019). NFD (2018)
estimates that black-market operations are still responsible for three-quarters of the
energy used to produce cannabis nationally. Non-uniform policy among the states is a
significant driver of the black market, and also fosters illegal transportation to states
without legalization.
Policy solutions
Previously, policymakers’ focus on the environmental impact of cannabis has been centered on
outdoor cultivation, and even those efforts have been deemed highly inadequate by some
observers (Carah et al., 2015). The past California Lieutenant Governor’s 2015 report on the
topic doesn’t once mention energy considerations (Blue Ribbon Commission on Marijuana
Policy 2015).
Solutions to the problems of indoor cultivation must begin with earnest policymaker
engagement. Sadly, as leading promulgators of energy R&D and policy at the national level, the
U.S. Department of Energy and the U.S. Environmental Protection Agency, federal entities with
decades of jurisdiction and impactful work on energy efficiency through all segments of the
economy, remain silent on the topic. Due to absence of legalization at the federal level, these
agencies even back away from research on issues that could have significant public health and
welfare implications (Plautz 2019). Moreover, vanishingly few policymakers at the state level,
even in states with varying degrees of legalization, have embraced the issue. Notable exceptions
are Massachusetts and Illinois, which have taken initial steps in the form of energy-related
building codes, although the quality of the outcomes is uncertain.
Following are some key needs and opportunities in the policy sphere.
Gather and publish more representative and useful energy data. A start has been made on
collecting measured data for actual facilities, but it is far from being representative of the market
or having the resolution necessary to evaluate specific regions, cultivation practices, or facility
types. It is essential to have third-party quality control and to ensure that these data are unbiased.
An acute challenge here is that energy data in this industry—as for any energy-intensive
industry—is regarded as highly proprietary. Producers as well as utilities are reluctant to disclose
information. Lessons may be taken from the IT sector, in which there is now ample transparency
of energy use in data centers and other high-tech facilities, despite prior concerns about the
sensitivity of this information. In any case, raw data on energy use doesn’t in and of itself
identify rates of adoption of efficient technologies, best practices, or help facilities know how to
improve. Action-oriented benchmarking can achieve these latter objectives (Mills 2015).
Improve transparency and require energy-use disclosure. Mandatory public disclosure of
total energy use as well as efficiency metrics for many types of non-residential buildings is
becoming widespread nationally,
21
but the cannabis industry has thus far been passed over by
these initiatives. Disclosure of this information could fill information voids that currently impede
21
See https://database.aceee.org/state/building-energy-disclosure
24
sound decision-making on the part of investors, energy companies, local authorities, cultivators,
and consumers. More transparency regarding the role of energy expenses in business cost
structures can help identify inefficiencies that create energy waste, as well as help to develop
best practices. Permitted cultivators are typically required to report plant counts, the number of
cropping cycles and the total amount harvested from each crop. Requiring cultivators to report
the facility type and equipment deployed during each cropping cycle along with the aggregate
energy used as well as energy per unit crop finished weight could provide additional valuable
data for policy analysts.
Create an improved consumer information environment, including product labeling. Policy
attention should be focused on consumer education and credible product labeling to enable more
informed consumer choice and guard against the greenwashing that is today prevalent. Prior to
distribution, producers are generally required to submit their products for testing and to make
some of that information available to consumers through product labels. It would be a benefit to
consumers to also have information regarding the methods used to produce the products and the
associated carbon footprint. Dispensaries have a key role to play in this process and budtenders
can help encourage decarbonization by educating customers and promoting products that are
produced using the most environmentally benign methods.
Eliminate anti-competitive market distortions favoring indoor cultivation. Subsidies to
indoor cultivators (grants, tax credits, energy rebates, etc.) mask price signals that would
otherwise help markets function correctly. Awarding preferential electricity tariffs or cash
incentives for new equipment disadvantages outdoor growers who have a vastly lower carbon
footprint. Subsidies of all forms should be eliminated when they result in added energy use.
Alternatively, it has been proposed that instead of utilities providing financial incentives to
“efficient” indoor growers, that they incentivize outdoor cultivators, which achieves the greatest
energy savings (Davis 2019b).
Allocate a portion of licensing fees to help address externalities. Licensing fees for indoor
operations are often higher than those for outdoor operations. This “signal” could be further
improved by incorporating some fee-proportionality to energy intensity, with an appropriate
portion of resulting fees reinvested in improving energy efficiency. Note that there is a
tremendous loophole in the current California license fee structure: greenhouses regardless of
how many supplemental lights they incorporate, are virtually exempt from indoor cultivation
fees, yet, as noted above, their energy use is substantial.
Develop science-based product-testing standards to avoid unnecessary crop destruction. To
minimize unnecessary destruction of energy-intensive finished products, more effort is needed to
ensure that required residue levels are realistic and in line with other consumer products such as
tobacco and alcohol. Rather than requiring immediate destruction of products, quarantined
products should be remediated where possible. Methods such as advanced distillation and micro-
filtration have been used to remove pesticides, heavy metals, mold, and other contaminants.
Conduct market-relevant open-source research and development. Public-sector R&D has a
long and successful track record of compensating for market failures where private industry does
not independently pursue technological pathways that are in the broader public interest (Mills
25
1995). Where there is lack of political will to mandate that all production be conducted outdoors,
R&D can inform strenuous interventions to address the damage of any compromise position.
These include better engineering and design tools for designers, labeling of energy using
componentry, and mandatory efficiency standards. Other promising avenues include plant
genetics to minimize energy (and water) requirements, development of large-scale energy
benchmarking and disclosure initiatives, impartial technology assessments, and peer-reviewed
best-practice guidelines.
* * *
Where policymakers insist on subsidizing indoor growers – to the anticompetitive disadvantage
of outdoor growers – the thresholds for eligibility should be uncompromising. Arguably, only
“Net Zero” facilities, i.e., those that generate all their energy on-site with zero-carbon methods
(typically solar photovoltaic cells) should be allowed. Hundreds of net-zero non-residential
buildings have been constructed around the country (NBI 2018), but there is no evidence that this
has yet been accomplished for cannabis production.
Conclusions
Cannabis policy and environmental policy must be harmonized. Until then, some of the nation’s
hardest-earned progress towards climate change solutions is at risk as regulators continue to
ignore this industry’s mushrooming carbon footprint. Thanks to this inattention, producers have
enjoyed a climate-change double standard (and lack of support) while being passed over by a
host of policies and programs successfully improving energy efficiency and deploying renewable
energy into virtually every other segment of the economy.
Those citing climate pollution as a reason not to legalize cannabis are missing the point:
legalization is necessary—but not sufficient—for addressing the problem. Yet, if done poorly,
legalization can make the problem far worse. Indeed, history may judge today’s cannabis
policymakers as betraying the public trust by enabling an industry with such a large carbon
footprint.
Many are eager to see an industry more forthcoming about its carbon footprint and one that
signals more hands-on interest in managing it and raising consumer awareness. A key factor in
this process is individual consumer choice and expectations, which sends signals back to the
market that ultimately help shape production choices and processes.
The continuation of indoor cultivation does not appear to be defensible on energy and
environmental grounds. It may be argued that energy use can be reduced with large investments
in energy efficiency or offset with renewable energy generation. However, this is an optimization
of a suboptimal activity. These resources could be used more productively in other arenas where
essentially zero-energy methods (i.e., outdoor cultivation, which has met humankind’s needs for
five millennia) are not available. Meanwhile, zero-net-energy indoor cannabis production
facilities have not been demonstrated, presumably because of the enormous area (and cost) of the
required solar arrays. Even with zero-net-energy indoor practices, other issues such as mercury
in lighting, embodied energy in buildings and equipment, water use, and solid waste production
remain concerns.
26
Proficiency in accomplishing the unnecessary will not yield true sustainability. Myopic
optimization of an activity that does not have to be conducted in the first place is not a legitimate
response to the very real risks society faces from climate change. The ethical integrity of indoor
cultivation—even at the greatest imaginable "stretch" levels of energy efficiency and renewable
propulsion—is in question. This is a pressing issue for producers, policymakers, and consumers
alike.
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Author Biographies
Evan Mills, Ph.D. is a California-based energy and climate-change analyst and principal at
Energy Associates, under the auspice of which this work was done. He is a retired Senior
Scientist from the U.S. Department of Energy’s Lawrence Berkeley National Laboratory
(currently a research affiliate), a research affiliate with U.C. Berkeley’s Energy and Resources
Group, and a member of the United Nations Intergovernmental Panel on Climate Change. He
authored the definitive and widely cited peer-reviewed analysis of energy use associated with
indoor cannabis cultivation in 2012. More information at evan-mills.com. Email:
evanmills1@gmail.com
Scott Zeramby is a subject-matter expert who owns and operates several businesses that
primarily serve the cannabis industry. In his work as a cannabis industry consultant, he
collaborated in the design of a 91,000 ft² state-of-the-art cannabis production facility in
Carbondale, Illinois. He has presented to both national and international audiences on a number
of cannabis-related subjects including: cultivation processes, public policy, economics and
energy use.
