Cultivation power price tag could reach $11 billion nationwide

One of the most painful – and expensive – parts of cultivating marijuana commercially can be the price of electricity to power grow lamps, especially for those with indoor warehouse operations. According to a four-year-old research paper, the industry at that point was already using $6 billion a year in power, and new numbers suggest that figure could jump to $11 billion, the High Country News reported.

That’s causing ongoing concern for power companies, so much so that an entire panel was dedicated to the topic at the annual meeting of the National Association of Regulatory Utility Commissioners in Austin, Texas, on Nov. 11. That’s where the $11 billion figure came from, according to High Country News.

A report on the session included statistics from Xcel Energy in Colorado, which estimated that the marijuana industry in the state already uses almost 1% of retail electricity in its service area, enough to power 35,000 homes. In 2011, the same number was true nationwide, and even higher in California, where cannabis growers at the time were using 3% of the state’s electricity. And stolen power for illegal grows can top $100 million nationwide.

Last month, two Oregon utilities, Pacific Power and Portland General Electric blamed marijuana growers for taking the state’s grid over capacity and blowing-out equipment.

What this all adds up to for commercial growers will likely be a trend towards either outdoor cultivation, the use of greenhouses, or other energy-saving measures, simply for the sake of long-term business stability.

11 comments on “Cultivation power price tag could reach $11 billion nationwide
  1. Russell Huxhold on

    If the growers added hemp to their fields, they could extract the oils for ethanol and burn the dried flowers for power. They’d basically be off the grid saving millions.

    Reply
  2. Don C on

    Yes, adding hemp production to cultivation would be very beneficial and could result in less of a carbon imprint for operations. However, public policy prevents this from being a realistic opportunity. More and more states are adopting a decriminalization, legal, or hybrid program (DC), but hemp production is typically not a component of implemented programs. Growers cannot be “Earth-conscious” when public policy prevents accessibility and R&D. If there were fewer restrictions and less red tape to cut through, cultivating cannabis would be more sustainable, and ultimately, a safer product.

    Reply
    • Seth Tyrssen on

      Of course they can. There are at least half a dozen ways. Setting up a diesel motor to run on French-fry grease and connected to a bank of forklift batteries will work. Theoretically, so will some form of wind power. When “public policy” translates into CORPORATE GREED, we need to do an end-run around those guys. They’re pretending to be whining about how overworked they, and their systems, are; but they’ll be delighted to charge you for power, and rake in still more cash.

      Reply
  3. Hastings RH on

    Growing indoors is stupid. The product is crap. It’s terrible for the environment. Most people that grow indoors are stealing power because product prices are too low to support a profitable enterprise. I know this from my 40+years in the industry. The vultures and thieves at SoCal Edison charge 39 cents a kilowatt hour. Just running ac is without growing is 800-1700 a month. It much worse than you think but I’ll save that for another day

    Reply
  4. Brett Roper on

    Not sure how an industry could spend more on power annually that the retail value of the product generated nationally on an annual basis? ArcView noted in 2013 it was a $1.5B marketplace, more recently media reports suggest a $3B marketplace for 2015 … so even if we double this value how did we get to $6B as the burden for power which would be something akin to the total value of the marketplace here in the US; legal, black, grey, or green? Indoor cultivation is known as a safe consistent method noting there are no wrong ways to cultivate cannabis; some just preferred methods over others depending upon your perspective. Additionally, there are risks with all types of cultivation methods regardless of the environment chosen so lets all agree that over time, best practioners will prevail. BTW … according to the EIA 2014 power bills nationally totaled just over $330B and my home state of Colorado had a 2014 bill of approximately $5.4B. Still not sure that the Cannabis Industry as a whole accounts for 2% of our annual usage though but my math could be off I guess?

    Reply
    • Gary K on

      I believe the $11B energy consumption reference goes beyond just legal growing, which also I believe the ArcView is considering as ‘legal’ market value.

      Reply
      • Brett Roper on

        The $11B is a projected future value; the $6B is suggested to be the current value which even if you multiply the legal marketplace of $3B+ (projected this year) times 10 you are looking at $30B of which costs of $6B seem a bit out of kilter … was my point noting most indoor grows I am familiar with spend less that 8% of their top line on energy. Using 2014 numbers the US energy market was $330B, of which about 62% was related to commercial and industrial consumption (EIA 2014 YE numbers) so that would make it (not knowing how consumption is classified just under 3% of our annual energy bill nationally (not including residential which may still hold a good bit of that value) … still seems a bit out of kilter to me but …

        Reply
  5. Ron Robinson on

    Indoor growing is carried over from moving undergound to elude the law. As we come back out into the sunlight it will become less and less profitable and many heavily invested growers in denial will die a slow death.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *