The cannabis industry has grown from out of the weeds to become an intricate supply chain employing growers, distributors, retailers, and all the industries that support their business. All of these businesses require electricity, especially the growers; in fact, often the electricity expense is the largest on their balance sheet.
Legalized for medical use first by California in 1996 and first, for recreational use by Colorado and Washington in 2012, cannabis is now medically available in 33 states and recreationally available in 11 states, including Michigan. Grid operators in states with medical or recreational cannabis have noticed a direct correlation between the grid’s load and new growing facilities being erected. In fact, 1% of electricity consumption in the United States can now be attributed to cannabis cultivation. In this article, we take a look at why onsite solar is an excellent pairing for cannabis growers and the cannabis industry.
1. Price Protection
The most important reason for growers to consider going solar is price protection. Adding a solar array to a growing operation can provide predictable and reliable energy costs through its usable life, hedging against the risk of increasing electricity costs. Electricity costs can range from $400 – $1000 per pound of product depending on the type of lighting used (e.g. LED versus high-pressure sodium bulbs).
As the industry continues to grow, larger firms will enter the market, putting stress on smaller firms by driving down prices. Larger firms with greater purchasing power and financing options will be able to reduce their electricity expense per unit via economies of scale. If you are a grower you will need to protect the price of your product to remain competitive by keeping expenses low. By investing in solar now, you will keep your electricity prices stable and stay competitive.
If or when cannabis becomes federally legal larger firms will have the option to grow their crop wherever the cheapest electricity is and sell that product in whichever market they choose. When you own your own power you will have a competitive advantage. This is why solar should be part of every cannabis growers’ strategy.
Along with using solar as a price protection strategy in the volatile marijuana industry, there are many secondary benefits that will aid in setting your firm apart as an industry leader. Other benefits include marketing your environmental commitment, increasing your operation’s curb appeal and community acceptance, attracting top talent, and becoming energy independent.
2. Marketing with Solar
Marketing your business with solar can be done in many ways. It may look like advertising “grown with the sun” on your final product, or it may influence the name of your firm or grow location; it also may be valuable to a corporate sustainability report for shareholders. If a solar expense is looked at as a marketing expense it cannot fail, because even if the marketing expense has a low return it will still show a return by the amount it will offset your electric bill.
3. Curb Appeal and Community Acceptance
Marijuana retailers can use their solar panels to increase their foot traffic by showcasing them on the roof or ground of their facility. Younger populations have shown that they are more interested in purchasing from firms aligned with their views, and solar panels are appealing because they directly mitigate the effects of global warming and reduce reliance on fossil fuels – a top concern for younger consumers.
Solar can also be used as a bartering token when approaching new communities to locate grow operations and retail shops. Many communities who are hesitant to welcome a cannabis business into their fold look favorably on businesses that include energy-efficient buildings.
4. Attract Top Talent
Use solar to leverage the hiring of employees who have aligned environmental views. It is no secret that employees who believe and support the business decisions of their employers are more productive, satisfied, and less likely to leave. Furthermore, with a solar system, you can offer your employees perks like electric car charging as an added benefit.
Finally, it is important to recognize what is happening in other, more mature, cannabis markets to predict what will come to growing markets, like Michigan. West Coast communities and utilities are clearly recognizing the impact of the additional strain on the grid caused by indoor cannabis growth. Denver has experienced a 45% load growth to their grid within city limits since their legalization of cannabis, and Pacific Power Utility in Portland traced seven blackouts to cannabis production facilities the year after their legalization.
Because of events like these, marijuana-specific electricity consumption has become subject to additional electricity tariffs. For example, Boulder Colorado now requires commercial growers to pay $2.16 per kWh used to an energy offset fund to be used for renewable and energy efficiency projects within the city. These growers are also required to have renewable energy systems to reduce their load to the grid.
In another example, the city of Arcata, California passed a ballot measure in 2012 that assesses a 45% tax on residences using more than 600% of the baseline level of energy. This measure was enacted largely to keep commercial grows out of residential homes and reduce marijuana-specific electricity consumption’s strain on the grid.
As cannabis markets and industries continue to grow so will the electricity consumption used to power the industry. The time to address your firm’s energy expense is now. Waiting until new regulations are put in place to make the change may be too late. Solar can provide a host of benefits other than electricity expense reduction, contact us today to discuss how you can best leverage solar into your canna-business plan.
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If you or another business is interested in having an undeniable impact on your triple bottom line give us a call for a free consultation to see if solar is right for you! Call (248) 923-3456 or request a Free Online Solar Analysis for Your Business.
Michigan Solar Solutions is a commercial and residential solar installer and electrical contractor that has served the lower peninsula of Michigan since 2007. We have installed thousands of panels and have a happy customer near you, check out what our customers think of us Guild Quality.