California Cannabis Energy Mandates Burden Growers With New Costs
Instead of using proven methods to incentivize the use of efficient technologies, the California Energy Commission (CEC) is proposing something different that will impact indoor growers.
The CEC’s new energy mandates will require expensive horticulture lights. These are the most expensive lights on the market today.
While the CEC intends to raise the efficiency standards for indoor and greenhouse agriculture facilities by 75% with this new requirement, this isn’t the best way to make a positive change in this industry.
Instead, there should be financial incentives or loans to assist businesses as they transition to the pricier lights. And, of course, the change should not happen overnight. A transition period of at least three to five years will give growers time to implement the innovative tech without forcing the expensive burden on them all at once.
The regulations as-is will put a tremendous financial strain on California’s indoor agriculture industry. Looking at the affected square footage that the CEC’s draft proposal has reported, the estimated cost for the lighting could cost growers as much as $255 million.
While all indoor agriculture will feel the effects of this mandate, the majority of the burden will be placed on California’s legal cannabis industry. This industry is heavily reliant on indoor growing, and with the struggles already associated with legal growing in California, this could be an opportunity for the black market to expand.
As the cost of regulated cannabis drives the prices higher, the black market can keep its prices low. This can either force small growers out of the cannabis industry or push them towards selling illegally.
The proposed updates to California Title 24 would demand indoor horticulture lights with an efficiency rating of 2.1 umol/j by January 2023. If instated, indoor growers will need to replace all of the lights in their facilities with highly efficient LED lights.
The most efficient LED lights on the market don’t come cheap; compliant fixtures cost at least five times as much as the fixtures most facilities currently use.
Will this affect your indoor cannabis grow facility? How much could this mandate cost you to keep your California grow operation compliant?