Colorado is MakingCannabisthe EvenIndustryGreener

By Ray Manzari

Colorado is leading the national charge to make the rapidly growing cannabis industry more energy efficient.

In Colorado alone, the cannabis cultivation industry comprised 2% of the state’s total energy consumption according to a 2018 report. And since then, the industry has only grown. Electricity, according to the same report, took up a third of cultivators’ operating budgets.

In February, the Colorado Energy Office (CEO) announced a program to help cannabis cultivators cut greenhouse gas emissions and energy costs. The Cannabis Resource Optimization Program (CROP) opened its first round of applications on February 15. CROP, which is funded by the 2022 “Air Quality Improvement Investments” bill, will provide free technical assistance and access to financing for cannabis cultivators in Colorado.

This program is the first of its kind and hopes to set an example for other states to regulate their cannabis cultivation’s energy efficiency.

"Colorado was the first state to legalize cannabis and now will be the first state to help licensed cultivation operators make their operation more energy efficient,” says Governor Jared Polis. “Providing innovative ways for cannabis cultivation operators to improve energy efficiency will save business owners money and reduce energy use in the industry.”

Through this program, cannabis cultivators will have technical specialists conduct facility audits and analysis of historic electricity, gas, water, and other resource usage to identify impactful efficiency improvements such as installing LED fixtures or upgrading HVAC systems. Cultivation operation owners will then work with the Colorado Clean Energy Fund to secure low-interest financing for these improvements.

Since cannabis is still illegal under federal law, the relationship between banks and the cannabis industry has always been tenuous. This is why most Colorado dispensaries either take cash only, or have credit card readers that operate like ATMs. Because of this tenuous relationship, cannabis cultivation businesses have not been able to secure bank loans to make energy efficiency improvements.

“Cannabis is a legitimate business in Colorado and 20 other states across the country, yet cannabis businesses are completely shut-out of the financing opportunities that are available in other industries,” says CEO Sustainable Cannabis Program Manager Elizabeth Lee. “The state recognizes that cannabis cultivation uses a substantial amount of energy and created the CROP program to provide unprecedented access to low-interest loans for improvements that ease this financial burden on Colorado businesses.”

Colorado lawmakers set aside $1.5 million for CROP in a bill passed last year, as part of a larger effort to reduce air pollution. In 2020, the state launched an experimental initiative to repurpose carbon emitted during the alcohol production process in cannabis cultivation. The program sought to capture carbon emissions from beer brewing and repurpose it to stimulate cannabis growth.

Cannabis cultivation business owners in Colorado will find the program application on the CROP webpage. This first round of applications will be open to cultivators who are seeking technical assistance and do not already have access to assistance through their utility providers.