Hugh Gaasch, VP of Strategy, Orion Partners.ai
In navigating the road of sustainability – all roads lead to energy.
Sustainability is a complex concept with many definitions – I really like the simple one cited by Ira Weinstein of CohnReznick in the our first SCC blog post, “a method of harvesting or using a resource so that the resource is not depleted or permanently damaged”.
A sustainability plan for a cannabis operation should start with planning the potential facility’s site location, the selection of materials, equipment, their sourcing, and include the construction process itself. Once you sort through this, you then have to wade through resource management, the nuances of the cultivation process, product processing, extraction, packaging, transportation, waste management, and even retail operations.
Across all of these areas, energy consumption (including the embedded energy to create and transport raw materials and finished products) is the fundamental core issue to address when creating a sustainability plan and position for customers and investors to see.
Cultivation Energy - the obvious consumer
Cannabis cultivation is an agricultural process where the environmental conditions of light-temperature, humidity, and CO2 levels are tightly controlled to optimize quality and mitigate crop loss. It all comes down to the quality and quantity of light once environmental conditions are optimized and the energy used to grow the crop.
Evan Mills of Lawrence Berkeley National Laboratory 2020 study discussing estimates of U.S. indoor cannabis production identifies that the energy use (of what) was equivalent to the emissions of two million average U.S. homes or three million cars. (1)
It’s clear cannabis cultivation processes are driven by energy - the lighting systems, heating, cooling, dehumidification, air movement, irrigation water, and control systems. Typical average energy end-use breakdowns of indoor cultivations facilities are estimated at ~35% lighting, ~55% heating, cooling, dehumidification, and ventilation. With the remaining portions allocated to water handling, CO2 usage, and miscellaneous operations. (2)
Addressing and optimizing energy consumption in a cannabis business requires a holistic system approach and a fundamental understanding of energy and thermal-fluid engineering. You have to start by establishing a baseline by measuring the existing or planned level of energy consumption in relation to the yield and the space and the value of the product produced.
In addition to the obvious energy consumers
Water is a valuable natural resource, that requires as much attention as electricity use. It can be scarce and requires a considerable amount of energy to acquire, condition, and deliver. Reverse osmosis water treatment, large volumes of discarded condensate from air conditioning & dehumidification processes can have considerable impacts that have to be managed and can create a wastewater burden.
Supplemental CO2 injection for grow facilities has a considerable energy impact even though the plants convert it to oxygen. It’s the production and the transportation of liquid CO2 to the site that add to the energy use profile.
Even simple grow media can include significant amounts of embedded energy content. Rock wool, perlite and other inert grow media, all require large amounts of energy to manufacture and process, and to transport.
Plant ‘supplements’ are everywhere in the cannabis market, pesticides, synthetic nutrients, fungicides, and many of the ‘mystic and cryptic sauces and goos’ are utilized by growers. It is important to recognize that all of these products require significant amounts of energy to produce, package, and transport. Over or unnecessary use, create a significant impact on a sustainability plan .
Extraction processes are not the first thing you think of when putting together a sustainability plan. They utilize a considerable amount of energy – both directly and indirectly. Solvent-based extraction operations typically require pressurized systems, cryogenic level cooling, and sophisticated controlled environments to maintain quality and safety and consistent quality. All of this comes at an energy cost.
These are just some of the nuanced issues involving energy sustainability within the cannabis industry.
As the industry continues to expand and mature, the drive to the lowest cost of production makes it difficult for inefficient operators to compete. Which leads me to the question, are operators’ inefficient infrastructures and processes undermining their profits and potential long-term viability? Every business has to be economically viable to be sustainable.
In order to analyze and execute economically driven sustainability, you must be able to measure all the elements that it takes to make your product, then look at the yield of product per unit of energy per square foot of space. Measure it as grams/kWh/ft2.
Make a business case, including; process improvements, cost reductions, marketing value, and impact on your business culture.
Create data driven initiatives: define goals and objectives, measure and document, identify opportunities within the data, evaluate the value, and manage the process with refinements.
Identify engagement opportunities with your customers, your staff, and the market.
“When you come to a fork in the road – take it”
- Yogi Berra
(2) Mills, E. 2012. “The Carbon Footprint of Indoor Cannabis Production.” Energy Policy 46: 58–67. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.396.4759&rep=rep1&type=pdf