Time for the cannabis industry to build a sustainable model

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Satellite image of smoke from Western wildfires.

Satellite image of smoke from Western wildfires.

Image of Derek Smith(Editor’s note: This story is part of a recurring series of commentaries from professionals connected to the cannabis industry. Derek Smith is executive director of the Resource Innovation Institute in Portland, Oregon.)

As just one example of the ongoing threats cannabis growers experience in our changing climate, wildfires raged through Northern California in 2017.

Multiple cannabis farms lost everything just before harvest, a few months before the regulated adult-use sales first launched in California.

Those spared flames on their properties contended with how smoke and particulate matter affected quality.

Turns out, in this era of climate change, this scenario was a bellwether – and not just for the largest cannabis cultivation market in the world.

No one spared

Since then, wildfire season has become a common term in the key U.S. cultivation markets of the American West in California, Oregon, Washington state and Colorado.

As you read this, chances are that cultivation operations somewhere on the planet face immediate threat from wildfires.

Hurricanes are ripping over land and impacting multiple states and their infrastructure, knocking out power supplies and creating unprecedented economic damage.

Business leaders need reliable industry data and in-depth analysis to make smart investments and informed decisions in these uncertain economic times.

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Stay ahead of the curve and avoid costly missteps in the rapidly evolving cannabis industry.

Droughts, floods and water-quality issues are impacting – and will continue to impact – rural, suburban and urban communities in many cannabis production areas.

No cultivators anywhere in the world, regardless of method of production, will be spared from the need to stay flexible in their operations or to maximize the resources available in their location.

There is no rationale for any agricultural sector to delay taking smart action.

‘New normal’

It is no exaggeration to say that instability is the new normal facing humanity.

The question is, what will the new normal of behavior be for industry decision-makers?

Will it be viewed through a lens of opportunity, or one of kicking the can down the road?

There is an indication that the pressure to report environmental, social and corporate governance (ESG) performance is driving executives to better understand and define their baseline environmental position.

This is leading to an enhanced interest in energy and water benchmarking, as measured by the increased usage of platforms such as the Resource Innovation Institute’s PowerScore.

Increased benchmarking by individual operators leads to a larger aggregate dataset, enabling PowerScore to provide producers with confidential rankings that compare their performance to similar producers on a range of environmental issues, from carbon emissions to waste.

Measure to manage

As the saying goes, what gets measured gets managed.

Using industry-standard key performance indicators (KPIs), companies can set targets and strategies to improve both their environmental and operational performance.

With energy and water being top expenses to most cultivation operations, monitoring the two creates a feedback mechanism for critically improved financial performance – and risk reduction.

Emerging strategies include strategic energy management and strategic water management.

We’re reaching the point where using energy can have a significantly lower carbon footprint than in the past, depending on the electricity grid and other energy sources used to feed a production system.

We’re also understanding how to effectively deploy technical opportunities such as reusing water and technological solutions that drive greater productivity per use of resource consumed.

Data-driven decisions

As we move forward into the unstable future, the business solutions that emerge will be data-driven, local and dynamic.

They will be specific to climate zones and watersheds and will need to react to and withstand fluctuations in supply.

In the near term, producers and their trade associations and vendors will partner with science-based organizations to unlock solutions for commercial scale.

Governments will find it in their interest to help their producers be more efficient because a streamlined cost structure will be the only way those producers can compete on the global stage and bring tax proceeds back to local communities.

Utilities and other resource suppliers will want to serve their customers effectively to stabilize capacity and revenue to withstand the shocks to their systems.

Data will unlock strategy, drive policy and justify incentive-based support.

The question now is whether we can achieve results at the pace necessary for a sustainable future for the industry and humanity.

Derek Smith can be reached at derek@resourceinnovation.org.

The previous installment of this series is available here.

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