Proposed LED mandate could cost California’s indoor marijuana growers millions

Cannabis cultivator OutCo in San Diego County, California, transitioned from HPS lights to LED as part of a sustainability effort. (Photo by K.C. Alfred)

Many California marijuana growers are up in arms over a recent proposal before the state Energy Commission that would require all indoor cultivation operators to use only LED lights by 2023.

If implemented, the proposal could cost cannabis businesses hundreds of millions of dollars, the growers say.

The proposal is part of a lengthy report issued this month by the Codes and Standards Enhancement (CASE) Program. It would force indoor growers to transition away from lower-efficiency grow lights, such as metal halide or high-pressure sodium (HPS), which are favored by some indoor growers over costlier LEDs.

“It’s very important to consider the upfront costs and … how growers will pay for that,” Amber Morris, director of government affairs for NorCal Cannabis, said during a recent webinar organized by the United Cannabis Business Association.

NorCal Cannabis has roughly 70,000 feet of indoor marijuana canopy that it’s spent “millions” on building out, Morris said.

At this point, she said, it’s impossible for NorCal to transition to greenhouses in order to save the money it would cost the company to comply with the proposed requirement.

It would cost NorCal at least $5.6 million to install LED lights for the entire canopy, estimated Bob Gunn, the CEO of Seattle-based energy consulting firm Seinergy.

He also estimated it would cost roughly $255 million for all of California’s indoor growers to change over.

That figure is based on a 2019 statistic in the CASE report that found California has roughly 3.4 million square feet of indoor canopy licensed for cannabis cultivation.

Gunn said LED lights typically cost about $60-$90 more per square foot of canopy than traditional HPS lighting systems. HPS systems use more energy but are cheaper upfront.

Gunn also warned that the financial cost of the CASE proposal would likely kill a lot of LED incentive programs.

Sacramento-based Nimbus Cannabis used such incentive programs to build out its LED grow operation when it relocated to the state capital from the San Francisco Bay Area.

But Joe Cavallero, Nimbus’ vice president of cultivation, warned that the upfront cost of LED lights is only the beginning of the actual conversion cost. Nimbus initially spent $500,000 on LED lights for a small-scale grow.

“We were covered for about 30% of those costs, but … there are a lot more costs than just the lighting,” Cavallero said.

He warned about a likely increase in costs for other needed infrastructure as well as the time it takes to change growing operations so yields don’t decrease.

“I’d say a cultivator needs at least a year or two to dial in their new process, and not all operators can get a state-of-the art facility going to do that,” Cavallero said.

Morris also noted that the CASE report did not take into account environmental requirements that are already mandated for marijuana growers, including compliance with the California Environmental Quality Act (CEQA) at the state and local levels.

Growers are required to begin reporting their environmental impact-mitigation efforts to the state by 2022, she noted, a mandate that wasn’t mentioned in the new report.

“It seems like this new proposal is a second bite at the apple. We not only have to go through CEQA compliance at the state level, we have to go through it locally,” Morris said.

“We are taking environmental impacts into consideration … this, to us, seems a little bit over the top.”

Public comment is being taken on the proposals until July 31. Comments can be submitted via email to [email protected].

Barring a course change, the proposals are expected to be adopted in 2021 and would take effect Jan. 1, 2023.

John Schroyer can be reached at [email protected]

More information on this topic is available here.

21 comments on “Proposed LED mandate could cost California’s indoor marijuana growers millions
  1. Eric on

    This is focused solely on the upfront costs and not at all on the longer term cost benefits to operators and how it can lower production costs and improve monthly financial performance, and doesn’t touch on the environmental benefits of reducing electricity usage. A seemingly biased article from the title all the way through.

    • Moe Alsharif on

      Well if you wanna talk about long term financial and environmental benefets, why aren’t they talking about mandating this to every industry not just cannabis?
      Why don’t they ban led acid batteries, and go for lithium? How about banning Tesla because it uses cadmium, and mandate LifePO instead?
      What about mining crypto?
      Shall I keep going?

    • Keef on

      Biased towards indoor cultivation. Here’s a novel idea….based on the availability of free sunlight versus using hydrocarbon generated electricity for the same use, indoor cultivation should also pay a luxury tax for using a finite resource for a productive activity that could be accomplished with readily available and free resources…SUNLIGHT!!. What a concept. Like Christopher Columbus discovering an already well inhabited America for the Euro-Centric mindset, millennials will one day “discover” that sunlight does produce quality cannabis. Does the extreme differential in base resource consumption add up to a better product and does it justify the extra cost not only simply in power consumption but in its consumption of the finite resource against the future of that resource becoming more scarce. The longer term cost benefit of outdoor production is incalculable against the consumptive madness that has massive fortresses and gargantuan power drops just to grow the SOMA for the masses. I grow outdoors.

      • GreenGuyforGood on

        Growing cannabis or any other crop outdoors takes a much greater amount of water and energy in the form of machinery as everything is spaced out more. Growing indoors can save on water by up to 300% as methods such as hydroponics can be utilized to recirculate water, not to mention water reclamation devices can be used to gather evaporated water in indoor environments. Growing these crops outside is not always ideal, especially in a state where water rights are already so contentious and where the cost of land is constantly on the rise. Actually give the CEH document a read, it is very well thought out and covers all indoor growing facilities such as Stacked Farms, Warehouses and Greenhouses and is not solely focused on the Cannabis industry. It is important to remember that cultivators will not have to purchase LED lights if they do not change or upgrade their grow facility. It is all in the CEH document. Title 24 compliance has always been applied to retrofits and new building and not to existing sites. This article is stoking fear for reasons that seem to stem from a bit of ignorance.

    • Muadhnait on

      Yes, the article does seem to tip on the whining side of the scale, especially given the enormous profits generated by the industry. Stunningly, there’s no mention of solar power, either, which would mitigate costs to supply power greatly over time, the ecological benefits well documented to be a lesser of evils.

  2. vandamage on

    they pay for themselves in large scale growing in 3 ways:

    1 you don’t have to replace the bulbs every 6 months
    2 the cost of operation is easily 30-40% less
    3 they produce less heat requiring less air conditioning

    • EctoSlymer on

      That’s so not true. As a seasoned grower who has a whole lot of experience growing with both LED, as well as HID lighting, I call B.S. The efficiency of growing under high-efficiency full-spectrum LEDs is not much greater at all than that under HID. Double ended high pressure sodium, as well as ceramic metal halide fixtures, produce very near to as much photosynthetic light per watt, as the very best LED options available, at a drastically lower upfront cost. The amount of photosynthetic light and generated per watt, directly translates to how much heat is generated in a grow space. LED’s are not a panacea, and people who think they are, don’t know the first thing about the actual figures of how much PAR is achieved over a given footprint with different types of light, and how much heat those different lighting options offput. People routinely claim LED’s do not generate heat, or that they generate drastically less heat, and both those claims are made by very very ignorant people, or somebody trying to sell you something.

      • Pharmstheproblem on

        Outstanding reply, not to mention that led are running at about the same energy use as sodium or hid, the heat is fanned out the top but is almost the same! Been there done that and now back to double ended sodium on movers, meaning less energy and wattage per sq ft…..

  3. Stoneybeast on

    This article does an amazing job at exposing how good California is at taxing an industry into nonexistence. It is moves like this that make it impossible to compete with a thriving black market.

  4. Kraig B Richard on

    Cooler and longer lasting. Changeable wavelengths. Less stress on fragile electrical grid. Cheaper in the long run. Costliness promotes outdoor growing with carbon sequestration factors. Decreasing nuclear, coal, and natural gas-fired production is a planet booster! Save the planet? Easy to forget about in a pandemic. Elsewise displays that greed of what has us so close to tipping. The Beautiful Plant can do a lot for our world.

    • EctoSlymer on

      Take a look at my comments above. The claim that LED is any kind of dramatic reduction in electric consumption to produce the same amount of photosynthetically active light spectrum, is poppycock by either very ignorant people, or someone trying to sell you something. LED is NOT any kind of drastic improvement over HID or double ended lighting, as far as how much PAR it puts on a given footprint. Heat generation measured in BTU per watt is a constant number, and does not fluctuate between LED and HID lighting. You can achieve just as high of a PAR rating on a given footprint with a good ceramic metal halide bulb and a good reflector, as you can with the best-in-class LED options available. I call nonsense.

      • Lon Grove on

        Wow. Step out of 2017. Huge efficiency gains have been made in just the last few years. Par value is measured in micromoles. Very high end 1000w HPS peaks at around 1.2 umols/watt. The best double ended CMH peak at 1.4 umols/w. First gen full spectrum led from 2017 (the cobs) ranged from 1.6 to 2.0 umols/w so no they weren’t that much better unless you bought the highest end. Testing was also poor in that time frame so many wouldn’t know which product was best.
        The second gen full spectrum led wave begins in late 2018 when Samsung enters the market with their grower focused 301b led diodes and the first “Quantum” style boards are released. This drops costs and increases efficiency dramatically in the low end. I personally bought a 100w Spider Farmer brand light to replace a standard 250 watt HPS setup. It rocks 4square feet and has 1.96 umols/w efficiency while costing only $149. That was cheaper than my 250 HPS setup that was lucky if it was pushing .7 umols/w efficiency.
        Third gen full spectrum fixtures began releasing shortly after the first of the year here in 2020. Most of these consist of long rows of led boards using Samsung 301 b or h diodes run at lower power consumption to achieve peak efficiency. Many of these lights can push 2.4 umols/w efficiency with the highest measured light i have seen tested pulling a fantastic 2.52 umols/w rating. That’s more than double the output per watt of the very highest end 1000w single bulb HPS fixtures and getting close to doubling double ended CMH.
        LED will pay for itself rapidly. Stop spouting years out of date information.

  5. ZootAllures9777 on

    If an indoor grower works with their landlord (even better, if they are the landlord), there are very low cost financing options in California and many other States to help pay for energy efficient LED lighting upgrades over time (20+ years). Look up Commercial PACE financing.

  6. Moe Alsharif on

    I would never use anything but LED at the time being to light up anything, but seriously do law makers in California have to be so difficult?
    Why don’t they mandate led on everything not just cannabis farms?
    Why is this state always mandate happy and overwhelming regulated!
    What happened to freedom?
    What if newer technology that is a lot more efficient than led pops up?
    What if some people are experimenting with different strains with different lighting technologies?
    Are you gonna jail or fine people for doing the right thing!

  7. Chris on

    No sympathy for these growers who should have transitioned to energy-efficient LEDs at the earliest opportunity, and I’m pro-pot.

  8. chuck on

    The way things are playing out in California it seem’s big Corporate Marijuana will be the only one to afford the ever changing gauntlet of laws. It would not surprise me if Big Marijuana start’s to push to revoke the home growing option for recreational users in order to curtail the black market . I signed up for legal weed in California so every one could enjoy this amazing plant not so the rich could control this amazing plant .

  9. Surrealisto on

    If these greedheads had thought ahead before jumping feet first into things, they might have realized a real “green” growing operation is signaled by at least 2 things- 1) outdoor cultivation in full sunlight uses less energy, which is, in comparison, free, to their machine-head folly, and 2) cannabis grown outdoors is a much more natural means providing product to customers, free of any number of chemical additives or artificiality. Indoor growers are in it purely for “yield = profits”- the entire struggle to legalize cannabis was not for their benefit, but for the millions of Americans who use it as their means of connection to nature. It IS just a plant- and everyone, including the planet, is better served by just allowing it to grow freely and naturally.

  10. Ben Marko on

    This is largely the business’ fault. They rushed in during the boom and implemented grand plans and started producing great bud under power-hungry HID lights. In a state that is well-known for being environmentally progressive. They could have invested in LEDs and just started out smaller, had time to expand and would have been ready for this.

  11. Conor Johnston on

    This article is very misleading. You suggest every grower would endure the cost to transition. The proposal is NOT a retrofit requirement. Growers would be required to upgrade when they expand or change their facility.

    “The proposed submeasures apply to new construction, additions to facilities with CEH operations, alterations that change the occupancy classification of a building (for example, a warehouse converted to a CEH facility), and alterations that involve installing new dehumidification systems in CEH facilities.”


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