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📰 Is the Only Green Thing about Cannabis the Almighty Dollar? | naked capitalism

By Lambert Strether of Corrente

In my day ("You were lucky!") cannabis (we called it "marijuana," or "dope," and not "pot,", or "weed," although cannabis is a weed) seemed like a small-scale affair. One purchased a baggie and shared it with friends. Rolling a joint was a skill both necessary and shared with others. And the hit was a lot more like beer than spirits; you might lie down, but you wouldn't fall down. And a bong was really advanced technology!

Fast forward to 2021, where cannabis is the #1 cash crop in the United States, valued at $35.8 billion (2006), compared to corn ($23.3 billion), and wheat ($7.5 billion). Then fast foward to 2021:06, vaccination summer. Forbes:

Ben Kovler, the founder and chief executive of Chicago-based Green Thumb Industries, a cannabis company with operations across 12 states, is getting ready to sell more weed than ever this summer.

On Wednesday, Kovler held a ribbon cutting after expanding capacity at GTI's 250,000-square-foot production facility in Oglesby, Illinois, where his company grows -end cannabis flower, produces pre-rolled joints, manufactures THC-infused edibles, and runs a cannabis beverage line. Right before Memorial Day weekend, as Covid-19 restrictions around the country ease and nearly half of Americans are now vaccinated, Kovler says GTI is focused on its goal to produce as much as product as possible to keep up with what will be a summer-long surge of demand.

"The Roaring Twenties is on," says Kovler. "It's unprecedented demand and we're making supply-nothing fancy from us."

Throughout the pandemic, the cannabis industry saw record levels of consumption. Americans bought $17.5 billion worth of marijuana in 2020, a 46% increase from 2019, and annual legal sales will reach $41 billion by 2025, according to Cowen. Yet, now that the economy is opening back up another demand surge is hitting the cannabis industry. "People also want to consume during high-energy good times-it's a tidal wave of demand," says Kovler. "The sun is out, people are seeing friends they haven't seen for a long time coming out of the pandemic. Cannabis is evolving the American experience."

Nice little industry. The only cloud on the horizon is that "evolving the American experience" with cannabis is an ecological disaster, the very reverse of the green that the green leaves of cannabis suggests. From Jason Quinn and Hailey Summers in Nature, "The greenhouse gas emissions of indoor cannabis production in the United States":

In this study we analysed the energy and materials required to grow cannabis indoors and quantified the corresponding greenhouse gas (GHG) emissions using life cycle assessment methodology for a cradle-to-gate system boundary. The analysis was performed across the United States, accounting for geographic variations in meteorological and electrical grid emissions data. The resulting life cycle GHG emissions range, based on location, from 2,283 to 5,184 kg CO2-equivalent per kg of dried flower. The life cycle GHG emissions are largely attributed to electricity production and natural gas consumption from indoor environmental controls, high-intensity grow lights and the supply of carbon dioxide for accelerated plant growth.

(Yes, they actually pump CO2 into the grow houses.) As far as energy consumption goes, from OilPrice.com, "The Cannabis Industry's Dirty Energy Secret" (from 2020, predating the Nature study):

In 2014, the NPCC worked out that it takes 4,000 to 6,000 kilowatt-hours (kWh) of energy to produce a single kilogram of marijuana product. Electricity costs can represent 20% of the total cost of cannabis production.

Back in 2015, it was estimated that a 5,000-square-foot indoor facility in Boulder County consumed ~41,808 kilowatt-hours per month–or nearly 66x the average consumption by a household in the county. More than two percent of the city's electricity usage went to marijuana production.

Evan Mills, a scientist at the Lawrence Berkeley National Laboratory, says that production of legal marijuana in the US consumes 1% of total electricity, or 41.71 billion kilowatt-hours (kWh) of electricity, at a cost of $6 billion per year.

That's enough energy to power 3.8 million homes or the entire State of Georgia. Generating that much electricity spews out 15m tons of greenhouse gas emissions (CO2), or about what three million average cars would produce in a year.

In fact, the figure could be much higher than 1%. In Massachusetts, from Cannabis Business Times:

Indoor cannabis cultivation facilities in Massachusetts are consuming about 10% of all industrial electricity consumption in the state, according to an estimate from the Northeast Sustainable Cannabis Project.

In Colorado, from CBS Denver:

According to a report from the Denver Department of Public Health and Environment, electricity use from cannabis cultivation and other products grew from 1 percent to 4 percent of Denver's total electricity consumption between 2013 and 2018.

The authors of the Nature article break down the energy issues[1] in The Conversation:

Indoor cannabis production is a major source of greenhouse gas emissions, and the environmental effects vary significantly depending on where it is being grown, according to our new study.

The lights used to grow weed indoors use a lot of electricity, but facilities require a lot of energy to maintain a comfortable environment for the plants. That means air conditioners or heaters to maintain proper temperatures. Producers also pump carbon dioxide inside to increase plant growth. This accounts for 11% to 25% of facilities' greenhouse gas emissions.

But the biggest energy use comes from the need to constantly bring fresh air into growing facilities. All of this outside air needs to be treated so that it is the correct temperature and humidity. This is a very energy-intensive process since the air exchange rate is typically so high.

And here is a handy diagram that breaks down how indoor cannabis growing uses all that energy, from a brilliant infographic at High Country News[2]:

(If you picture a brewery or a craft-beer[3] operation, the difference in energy consumption is easy to see.)

But, I hear you say, cannabis is a weed ("ditch weed," in the United States). How on earth did we come to grow it inside high energy warehouses?[4] One superficially straightforward answer is yield. From a Dutch seed catalog:

All things being equal, growing indoors is 500/80 = 6.25 times the yield of growing outdoors. That pays for a lot of electricity.

However, matters aren't quite so simple. Policy played a role to play in driving cannabis cultivation indoors, in at least four areas: Illegality, Federalism, state regulation, and lack of price protection.

1) Illegality. For most of the life of the industry, cannabis growth and use has been illegal. (Parenthetically, most of the pioneers of the industry are still in prison. It's shameful that the industry isn't campaigning to have them freed, and their records cleared.) It's easier to conceal a cannabis "grow" indoors than outdoors, whether from prying neighbors or law enforcement. So all the practical skills needed for cultivating marijuana have been skewed indoors from the beginning, including seed selection.

2) Federalism. Slate explains:

Currently, because marijuana is not legal at the federal level, cannabis growers are not allowed to ship their products over state lines…. [C]annabis sold in any state where it's legal must be grown in-state. Because not every state boasts the year-round warm climate that cannabis thrives in, the vast majority of cannabis is grown indoors in large facilities.

HCN provides a county map of energy consumption for cannabis growth. Wintry Penobscot County:

Sunny Los Angeles County:

Because cannabis is not legal at the Federal level, it's inherently impossible to grow marijuana in the least energy-consuming states. There is no equivalent to "the Corn belt" for cannabis.

3) State regulation. Slate again explains:

[M]any jurisdictions structure regulations in ways that favor indoor cultivation, such as setting license fees by the size of the growing area (yields are higher per square foot indoors) or by requiring that cultivation be co-located with (typically urban) retail sales. Others forbid outdoor cultivation altogether, including all of Illinois, where one can find massive indoor grow facilities plunked onto beautiful farmland. Massachusetts has only recently begun to allow it, the first trials meeting with success despite the northern climate.

(Massachusetts, however, isn't trying hard enough[5].)

4) Lack of price protection. From a local Texas paper, the Victoria Advocate:

When hemp was first legally grown in Texas in 2019, he said, hemp sold for about $4 per percentage point of CBD. It is now selling at about 25 cents, in the range of about 10 to 30 cents per percentage point of CBD.

Dollars per percentage point of CBD is one of the common measures of hemp in Texas because unlike many agricultural products, a common, federally set commodity or futures contract system has not been established.

Futures contracts for commodities are one of the main price protections, Benavidez said, to protect against price volatility. While the commoditization of agricultural products directly impacts the harvested plants, it also helps to protect against drastic or unexpected changes to the price of products produced by those plants.

It makes sense to grow marijuana indoors in a controlled environment because that minimizes risk, since cannabis growers don't have the protections against risk that other farmers have.

Clearly, from a greenhouse gases standpoint, all these policies need to be changed to foster outdoor cultivation, starting with legalization at the Federal level[6]. From News4Jax, referring to the Nature study:

While farming cannabis indoors burns through electricity, shifting crops outdoors would help shrink the carbon footprint by 96%, researchers found. Using a greenhouse would cut emissions nearly in half.

Here is a sketch of what an outdoor cannabis growing utopia would look like to me. Besides Federal legalization, including price protection for growers:

(Somebody smarter than me could figure out a tax regime to force the indoor growers to pay for their externalities, plus a comfortable margin for error. This utopian proposal also eliminate many of the dystopian aspects of "evolving the American experience" with legal cannabis, including corporate marketing, public relations, seed patents, Vegas, and Uber delivery.)

Better living through hand-waving, I know. I think the main issue is seeds, which are currently optimized for indoor growth. (I am guessing they are also optimized for strength, so people like Ben Kovler can put the smallest possible dose in every can of energy drink or whatever.) But I don't accept the idea that "ditch weed" gives an inherently lesser high than indoor weed, because all the genetic work has been focused on indoor conditions. But Michael Pollan's Botany of Desire shows us that plants are reaching out to us - engineering our desires, if you will - just as much as we reach out to them, consuming and enjoying. So, intuitively, I am confident that excellent outdoor varietals can be bred and grown, adapted to particular regions (like wine, cannabis should really have the terroir no warehouse can give.) Herb gives a[n, er] potted history of breeding:

Today, there are nearly 800 known varieties of cannabis that have been bred to perfection, in spite of prohibition. But what makes a strain unique? And why are there so many varieties? Here's everything you need to know about cannabis breeding.

The prohibition of cannabis contributed to this confusion in part because many illegal grow ops were driven underground. Here, cultivators began to mix strains to create hybrids, and the gene pool became murkier. With few opportunities to test illegal strains in a lab, the genetic origins of the plants were largely identified by tracing which parent strains were mixed to create the offspring. Most breeders focused on THC content as a major selling point and selectively bred strains to produce the highest levels of THC and inadvertently bred other traits out of the plants.

Decades of underground cultivation mean that much of what we know about cannabis breeding comes from those who have risked their freedom to perfect the art of growing. As a result, we are only beginning to understand the techniques behind creating new strains or breeding old ones. But with legalization spreading quickly across the US and the world, that art is becoming an exact science that could soon give us some of the world's most powerful and iconic new strains.

I see no reason why this process will not work for outdoor strains, just as well as for indoor.

From President Biden:

There's no time to waste when it comes to the existential threat of climate change. That's why I've set a bold new goal of cutting U.S. greenhouse gas emissions at least in half by 2030.

- President Biden (@POTUS) April 23, 2021

If we think that the threat of climate change really is existential, then we need to act like that. One excellent way to start would be to eliminate as many indoor cannabis grows as we can, as rapidly as possible, in favor of outdoor growth.

NOTE

[1] Water is also an environmental concern.

[2] "High" as in literal altitude. For pity's sake.

[3] If the environment is your second priority after recreational intoxication, stick with alchohol or caffeine. The authors present this chart:

[4] There is an article to be written on large "box" buildings, dropped as if from the sky across America. They include, besides malls, grow houses, warehouses, and data centers. There are probably others.

[5] From WBZ News:

[The Northeast Sustainable Cannabis Project] says the state's pesticide laws for cannabis farming are part of the problem. Lewis said he talked to many pot farmers who would like to grow their plants outside - and therefore use less energy. The farmers said they can't protect their plants from bugs and diseases without organic pesticides, which the state doesn't allow for marijuana growing.

What on earth was the state Legislature thinking?

 
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