GRAND RAPIDS — After the Grand Rapids City Commission voted last month to fast track recreational cannabis businesses, the U.S. Green Building Council of West Michigan recognized the city could soon see grow operations using massive amounts of energy.
Nearly five years ago, the city joined a national effort in establishing a 2030 District, a public-private partnership that aims to reduce buildings’ energy and water consumption citywide as a tool to address climate change. The city itself also has long-term carbon reduction goals.
But an increasing number of companies looking to establish cannabis growing operations could collide with citywide goals to reduce energy consumption, said Cheri Holman, executive director of the U.S. Green Building Council of West Michigan.
“I immediately reached out to zoning staff at the city and said, ‘Do you have any idea of what this will do to our carbon goals?’” Holman said of the July 7 vote fast-tracking recreational cannabis licenses.
Researchers last year found electricity usage from legal marijuana cultivation across the U.S. could increase more than 160 percent by 2022. Utilities in Michigan and elsewhere have begun to increasingly focus on energy efficiency strategies for cannabis growers.
USGBC worked with the city to include environmental regulations, mostly around lighting, involving cannabis operations. Companies that apply for a cannabis business license in Grand Rapids also must submit a sustainability plan, Holman said. USGBC works with applicants one-on-one to help them meet sustainability and energy requirements.
“As an industry, (cannabis business owners) just naturally have a goal of being sustainable,” Holman said. “They want to do this and do the right thing in general, but it’s just a matter of capital and getting them all the tools and resources that are available to them.”
USGBC has been holding regular webinars to educate the community, civic leaders and those in the cannabis industry on sustainable practices. The No. 1 way cannabis growers can reduce energy use is by switching to LED lights, which — despite misconceptions — doesn’t necessarily decrease crop yield, Holman said.
“We’re learning, and so is the entire country,” Holman said. “In Grand Rapids we’re learning from Denver and Portland and the mistakes and things that happened to them. We did all the research and are trying to get in front of it.”
Along with the education component, lack of access to capital is the other major obstacle for cannabis businesses being more sustainable, Holman said. Cannabis operations require a large investment to begin with, which only increases with sustainability targets, she said.
“It’s always this balancing act with up-front capital, even when there is a return on investment,” Holman said.
The “greener” ways of running a grow facility tend to be more expensive, but have a higher return on investment or a higher quality product output, Holman said. Largely due to federal cannabis laws, some business owners struggle with having enough capital to invest in more high-tech equipment, she said.
“They only have so much cash, so they have to figure out the best way to spend it and how to finance highly technological equipment,” Holman said. “They just might not have enough capital.”
The USGBC and Michigan Saves, a nonprofit organization that helps finance clean energy projects, are working toward a solution on the financing issue in the cannabis industry. Officials are making progress and have identified a couple of potential banks that would work with cannabis companies, Holman said.
Starting in October, the 2030 District will gather community feedback on what policies and incentives might make sense for the city to reach its carbon goals. The city is open to offering cannabis businesses incentives if they adhere to sustainability requirements, which could include tax abatements, Holman said.
“We’re excited to have these businesses in the community and to work with them,” Holman said. “We find them environmentally focused and ready to be great community partners and neighbors.”
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