Taking Steps Toward Sustainability

Forward-thinking companies are pushing the cannabis industry to employ a variety of techniques and technologies to reduce energy consumption, cut down operating expenses and be more environmentally friendly

Co-owner Amy Andrle poses among the plants in L’Eagle’s grow facility, which strives for sustainability in its practices.

When Amy Andrle approached Certifiably Green Denver for a sustainability audit, no other cannabis company had gone through the process.

Andrle, who owns the L’Eagle cannabis shop in Denver with her husband, John, discovered the program while participating in the city’s Cannabis Sustainability Work Group, which is developing a set of best practices for the industry. That group is also part of Certifiably Green Denver and when Andrle learned about the agency’s environmental certification program, she asked if L’Eagle could be evaluated.

“They usually certify retail outlets, restaurants and that sort of thing,” Andrle says. “But we were the first cannabis business and it was really great that they certified our store.”

Sustainability — using environmentally friendly practices, recycling and reducing energy use — may not be the first thing that time-strapped business owners think about as they navigate the complex world of paperwork and regulatory agencies that come with legal cannabis. But for the highly competitive industry, the cost savings can provide a much-needed edge.

Cultivators often spend upwards of 20-25% of their operating budget on power and lighting. While lighting remains a tricky subject for growers, it’s an area that leaves significant room for energy savings, says Tim Hade, co-founder of Scale Energy Solutions, a company developing off-grid power solutions for cannabis companies.

“The first and most important step for companies is to understand how they’re currently using energy,” Hade says. “My advice is to get an energy consultant as soon as possible. In almost every case I’ve seen, you get the best bang for your buck if you do a comprehensive energy plan that incorporates things like solar and natural gas. And the earlier you do it — including before you build out your business — the more you’re likely to save.”

Certification programs for clean cannabis can give products a marketing advantage in stores, where customers are increasingly looking for verification that items are made using safe practices. Adopting the techniques can also pay off in critical acclaim, says Chris Van Hook, director of Clean Green Certified, a California-based certification service that also operates in Washington, Oregon, Nevada and Colorado.

“Clean Green Certified companies in California have won Cannabis Cups here for the past six years,” Van Hook says. “In the Emerald Cup, we’re in the top 5% every year. We’ve also won in Spokane in 2016 and in the Oregon Cultivation Classic in 2016. These guys are winning all the top awards. We’ve proven not only that you can grow cannabis organically, but you can be highly successful doing it.”

Certification programs and evaluations

In Colorado, prior to the L’Eagle certification, Certifiably Green Denver had worked with some cannabis growers and retailers even before the state’s recreational marijuana launch in 2014. But the agency couldn’t certify those businesses without completing an assessment of the industry and the technologies it uses. Part of the reason Certifiably Green Denver created the Cannabis Sustainability Work Group in 2015 was to develop those standards, says Emily Backus, sustainability advisor with Certifiably Green Denver and co-chair of the work group.

L’Eagle was the first dispensary to receive sustainability certification from Certifiably Green Denver.

“Certification is demand-based, and we don’t usually provide that unless asked, since we have a small staff of three people,” Backus says. “We started certifying dispensaries (in 2016) as part of our retail certification program, but that’s just for stores so far. The grow side of the equation is more difficult. The technology they’re using is very different from other types of businesses. And suggestions that we might make like changing out lighting — that’s really, really different.”

L’Eagle implemented several suggestions, including a no-idling policy for cars in front of the shop to cut down on CO2 emissions, adding information to the company’s website about how to get there using alternative transportation, using water filters and replacing break room lighting with LEDs.

“A lot of it was logical, but it was great getting them in there to get everything moving forward,” Amy Andrle says.

John Andrle, who’s more involved with the store’s grow operation, says he received a lot of useful advice from Certifiably Green Denver’s walk-through of his facility, even if the agency can’t certify it yet.

The company replaced 1,000-watt metal halide bulbs in its veg room with 320-watt compact fluorescents.

“It’s not equal math, but we cut our energy costs for lighting by 50-67% doing that,” John says. “And the CFL lights are fantastic.”

The company still uses high-pressure sodium lighting for its flower room, but making changes in the veg room was a great suggestion for his business, John says.

“The CFL lights were a game-changer, not just for the bill, but they’re also very nice to work under,” he says. “The light’s not as harsh, and if anything, the plants actually grow faster.”

Energy Trust of Oregon is another agency that has been performing energy assessments and rebates for the cannabis industry. The group has worked with Oregon medical cannabis companies since 2013, but business ramped up significantly with the state’s launch of recreational cannabis in mid-2016.

From 2013 to 2015, the agency provided financial incentives for 12 medical cannabis companies to upgrade their power and lighting that saved about 800,000 kilowatt-hours of energy. From late 2015 to the present, the agency has provided incentives to 15 recreational production facilities, with a total savings of 1 million kilowatt hours, says Sam Walker, the agency’s senior industrial program manager.

“One of the beautiful things about Energy Trust of Oregon is we provide services regardless of customer type,” Walker says. “We work with customers to save energy, lower costs, improve their bottom line and to be more competitive. And interest from the cannabis industry is growing, as are our marketing and outreach efforts.”

In 2017, the agency expects to save more than 4 million kilowatt hours by working with the cannabis industry, Walker says.

Solar panels are an easy way to reduce power costs in any building or to get energy to far-flung operations.

Sustainable power technologies

Beyond savings on lighting, some companies are also looking at off-grid power systems using a combination of solar, natural gas and a battery for storage.

With the market growing rapidly, Hade left a corporate energy job to focus on power solutions for the cannabis industry, founding Scale Energy Solutions in mid-2016.

“About a year and a half ago a cultivator in Washington called and asked me about technology for his cultivation,” Hade says. “It piqued my interest and he sent me some data and info. I got really into cannabis very quickly, because the energy consumption in the industry is off the charts.”

Scale Energy Solutions conducts energy assessments for customers and is also building a custom generator that uses a mix of solar, natural gas and a lithium ion battery.

Hade compares the cannabis industry’s power problems to one that telecom data centers faced in the late 1990s and early 2000s. At the start, there were lots of them, with lots of energy waste — and it was the ones that took a serious look at their power usage that survived, he says.

“Data centers that got good at using less energy had less costs overall, and they were able to compete and stick around,” Hade says. “The others didn’t. I think that will be the same in the cannabis industry.”

It’s less expensive for companies to create power onsite, instead of getting it from the power grid where power bleeds off the lines over time, Hade adds. And with solar, after the equipment costs, you get a portion of your energy for free.

Using water filters helped L’Eagle get certified for sustainability.

“Generators can make your energy build cheaper, make you environmentally more sustainable and make your facility more resilient,” Hade says. “You can’t, as a cultivator, lose power for any amount of time. That’s a concern with the power grid, but not with a generator.”

Power will likely become more of an issue for business, as well, when Massachusetts and Maine launch their recreational cannabis industries. Power is relatively cheap and reliable in Colorado, Washington and Oregon. But on the East Coast, and to some extent in California, those rates are much higher, Hade says. By most measurements, Alaska has the most expensive electricity in the nation.

“Once this process plays out in those states, I think power technologies will be more on the forefront of growers’ brains,” he says. “When you combine solar, natural gas and lithium ion battery storage, all these technologies together we believe can go into cultivation facilities and make them cheaper and more efficient.”

Chico Solar Works is another company capitalizing on the need for sustainable energy sources in California. What began as a roofing company transitioned into solar about seven years ago after customers started asking for it, says Kristine King, head of sales.

“Right now, a lot of growers are starting to think about solar power and do their own research,” King says.

Off-grid solar has also become popular with black market growers because the U.S. Drug Enforcement Administration can’t track power use from a power company bill. But with legalization, saving money and resources is a larger focus.

“Those growers weren’t necessarily about sustainability, but about ‘how can I fly under the radar?’” she says. “But in the few months that I’ve been here, there’s more demand from legal industry. People are thinking a lot more about sustainability.”

The company’s solar systems and batteries cost between $45,000 and $100,000, but after the initial investment, there are no recurring costs, King says.

Power blackouts from the main grid are also a big concern for her customers. One customer in rural California lost $10,000 worth of product when his power dropped, which made him decide to switch to solar, she says.

“When these guys are running big rooms with 20 to 30 lights and they lose power, that screws everything up,” King says. “We just had a big storm in California and that happened. It can end up costing them a lot in lost product or medicine. But if they’re off the grid, that doesn’t happen and they don’t lose power.”

L’Eagle was the first dispensary to receive sustainability certification from Certifiably Green Denver.

Clean cannabis

Besides L’Eagle and the Denver Cannabis Sustainability Work Group, Amy Andrle is also a member of the Organic Cannabis Association, which established its own third-party certification program aimed at “clean cannabis.”

The program’s definition of clean cannabis is a bit different from other services; it requires that after the first three weeks of growth, cannabis plants cannot be treated with any pesticides, fungicides or other products.

“We define clean cannabis as having comprehensive integrated pest management,” Andrle says of the practice L’Eagle follows. “We also have a long cure of 90 days for clean cannabis product.”

The certification confirms that the retail-ready product has zero residual pesticides when it gets to the market, though pesticides can be used in the first three weeks.

On the other hand, the Clean Green Certification program uses different criteria. It was created to mimic federal organic standards, since the name “organic” can’t be used in the cannabis industry because marijuana is still considered an illegal substance federally, Van Hook says.

“All the organic cannabis you see in the marketplace — those people are throwing their hands in the air and saying we know nothing about the USDA Organic labeling law,” Van Hook says. “That’s illegal. And people ask why the USDA has never enforced it. The USDA says it’s never been tasked with that, which, in other words, means there’s no funding for it.”

Van Hook, who has a law degree and a more traditional agriculture background, saw the need for a certification system specifically for cannabis back in 2008, when he was doing organic certifications for the agriculture industry.

He launched Clean Green to have the same qualifications as USDA Organic standards without using the name “organic.”

“We don’t make up answers,” Van Hook says. “We work within existing agriculture and food processing regulations for the state and the federal government. We’re merely bringing those regulations into the cannabis industry.”

In general, Clean Green Certification means that cannabis was grown in a manner that is sustainable, using natural fertilizer and pest control methods. It does allow for some pesticide use, but nothing synthetic.

That makes it a bit complex when looking at the pesticides different states allow, Van Hook says.

“Some of the states have allowed compounds that are not on the USDA program, so we don’t allow them, but the states do,” Van Hook says. “There are also some things allowed in the USDA organic program that are not allowed in the states. So we’ll be playing a matching game in 2017 to try to help our customers navigate that.”

Sustainable standards have become a key selling point for Temple Extracts, which makes cannabis oils and extracts. The company created its own standards and has built a network of farmers that employ those standards — including a ban on pesticides, synthetic fertilizers and other contaminants.

The team at L’Eagle switched to compact fluorescent lights in its vegetation rooms in order to save money and resources.

The company uses a 17-step proprietary process for CO2 extraction that doesn’t involve the use of hydrocarbons and includes a purification and clarification process designed to preserves terpenes.

“Our farming practices use a variety of sustainable and organic horticultural practices,” says David St. Clair, one of the company’s founders. “We believe that sustainability will play an increasingly large role in the cannabis industry, especially as patients and consumers become aware of the unregulated use of, and contamination by, toxic pesticides.”

That said, certification services remain a bit piecemeal across the country, but St. Clair thinks that may change as the industry continues to grow rapidly across the country.

“Today’s cannabis industry has some similarities with the early days of organics,” St. Clair says. “Before the USDA’s Organic regulations, there were a patchwork of independent certification organizations, each with their own standards. Although the organic movement is still relatively small in the cannabis sector, we believe that organic will become much more broadly adopted.”

And that’s actually another reason for companies to get on board with certification now — those regulations are likely coming, Van Hook says.

“If a company is Clean Green Certified and the USDA decides to allow cannabis to be Organic certified, then that company will already meet those standards — if not a bit stricter standards,” Van Hook says. “That means they can switch over right away.”

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