Marijuana

Marijuana's Flower Power Is Leading To (National) Energy Headaches

Most utilities charge marijuana businesses the same as their other customers, but make no real effort to work with them in resolving their special needs. In the meantime, our environment pays the price.

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When it comes to creating and implementing marijuana regulations for marijuana businesses, most state regulators focus on satisfying the eight federal enforcement priorities in the 2013 Cole Memo. Their goal is to draft regulations “robust” enough to keep the federal government from intruding on their state’s democratic experiment with marijuana. This has meant energy usage has been mostly ignored.

Until now.

As the cannabis legalization movement picks up across the United States, state and local regulators are increasingly delving into marijuana business energy consumption and, in particular, how to handle the cost and provisioning of utilities to these businesses.

I have previously written about utilities and cannabis in the context of what happens if the Feds literally pull the plug or turn off the spigot for federally regulated utilities and on how a county in Washington State planned to continue providing electricity to marijuana businesses even if the federal government were to cut the power. This post, however, is about how federal laws make it difficult for marijuana businesses to be energy efficient, and in doing so, hurt those businesses, their surrounding communities, and the environment.

Energy consumption by cannabis businesses is becoming a problem in some locales:

[In November] . . . Pacific Power experienced 7 localized outages due to demand overloads attributed to marijuana grow operations. And this week, a Seattle utility warned of a potential 3% load growth in coming months — just from marijuana operations. Earlier this year, [it was] reported that 45% of Denver, Colorado’s load growth was coming from cannabis growing operations. Many utilities, due either to ideological aversion to the industry or fear of running afoul of the federal government, have taken a “don’t ask, don’t tell” approach to handling marijuana-related load growth.

This sort of head in the sand approach is waning as marijuana industry expansion is forcing serious debate over how states and municipalities should allocate electricity, water, and energy to marijuana businesses producing an indisputably energy-intensive crop.

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Indoor grows, no matter their size, can consume large amounts of energy. I am aware of at least one large state-legal indoor grow that reportedly pays around a million dollars a month on its electricity bill. Though you would think utility companies would want to help marijuana businesses be more efficient with their power usage, that generally has not been the case. Part of the reason is because the Bonneville Power Administration (BPA), a federally-owned transmission and generation utility, is normally the platform through which utilities run efficiency and market transformation programs, but federal cannabis prohibition has caused the BPA to stay away from cannabis. Federal drug laws also preclude the BPA from providing financial incentives to make marijuana businesses more energy efficient.

The federal government’s hands-off approach to cannabis energy consumption has led some utilities to charge a premium for the energy they provide to marijuana businesses. Most utilities charge marijuana businesses the same as their other customers, but make no real effort to work with them in resolving their special needs. In the meantime, our environment pays the price.

Hilary Bricken is an attorney at Harris Moure, PLLC in Seattle and she chairs the firm’s Canna Law Group. Her practice consists of representing marijuana businesses of all sizes in multiple states on matters relating to licensing, corporate formation and contracts, commercial litigation, and intellectual property. Named one of the 100 most influential people in the cannabis industry in 2014, Hilary is also lead editor of the Canna Law Blog. You can reach her by email at hilary@harrismoure.com.

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