These days, pot growers don’t share the tricks of the trade like they used to. A decade or two back, marijuana cultivators would log onto forums and flip through the pages of High Times for tips on how to coax that good-good out of a simple seed. Weed’s illegality formed an underground brotherhood of gardeners, working together to fight the Man and stay small enough to avoid detection. But now that weed businesses are becoming bigger, more legitimate and more competitive, why let your rivals know how you do what you do – or even what you are doing at all?
This was the conundrum facing longtime marijuana grower Jesse Peters, co-founder of Oregon’s Eco Firma Farms, on stage at an event this February. Peters – who started the company with his wife, Kate Guptill, in 2011 – is known in Oregon’s cannabis community for making his cultivation facility as energy and cost efficient as possible, but no one knew exactly how much money he was saving. So someone asked him: how much does he spend per pound of pot produced?
“I had to think about it like, do I want to say this out loud with this room full of people?” Peters recalls. He worried that once dispensary owners understood his profit margins, they would freak out about how much he was charging them. He also worried that he was deluded, and $497.50 was actually way more than everyone else was spending. “But then I was like, you know, fuck it, so I spit that number out,” he says. “And when I did, I saw everybody in the front row’s face drop, and about six people started laughing and shaking their heads.”
Peters was spending less than half of other legal indoor farmers.
Based on the barrage of texts he later received, Peters realized that he was spending less than half of other legal indoor farmers. As all those Oregon cultivators went back to their offices and started plotting about how to get their production costs as low as Peters’, they soon figured out that almost all of those savings had stemmed from one simple change: using LED lights. And now that everyone knows Peters is crushing them on production costs, they, too, want to know more about LEDs. With green rushers flooding the market, trying to get rich on legal weed, wholesale cannabis prices are crashing, and more and more farmers are trying to figure out how to produce more for less. But LED lights come with some upfront expenses that take a few years to overcome, and a lot of old-school cultivators are skeptical about using them. So even though Peters was concerned about revealing too much to his competitors, copying his methods might not be as easy as it seemed.
The event Peters spoke at was organized by a group working to help cannabis entrepreneurs learn how to grow more efficiently: the blandly named but increasingly influential Resource Innovation Institute (RII). Founded two years ago, the non-profit RII aims to provide marijuana growers with the resources necessary to do what they do with the least possible impact on both the planet and their wallets. Much of that can be accomplished just by getting cultivators to contribute data anonymously and discover what techniques are helping their peers get ahead. But with most growers focused on their own bottom lines, the group faces several challenges.
RII founder and executive director Derek Smith used to run an enormous stimulus project for the city of Portland, retrofitting homes for energy efficiency. But when he saw what was unfolding in the legal weed industry, he felt motivated to get involved.
“I’ve never seen a bigger opportunity to have a positive impact on climate change as I have with this industry,” Smith says. “How often does an industry just come along and its entire infrastructure gets established at the same time?”
The goal, essentially, was to create “LEED for weed” – a set of standards and guidelines that cut through the jealous guarding of best practices, allowing all cultivators access to the information that can help them save money and reduce emissions. One of the RII’s founding members even came from the U.S. Green Building Council, which developed the standards used for LEED certification.
Historically, most of the folks who grow pot haven’t done so in a way that is environmentally friendly. The best estimates show that cannabis cultivation currently takes up a whopping 1 percent of the total electricity used in the entire United States. Criminals looking to make a quick buck have soiled public lands and watersheds with toxic pesticides. And weed warehouses can have up to eight times the energy impact of other commercial buildings.
For a long time, pot cultivators, like most people running businesses, cared more about costs than about climate change. But with the latest generation of LED technology, the smart environmental decision is also the smart financial decision, in the long term. As the U.S. Department of Energy has shown, using LEDs in indoor agriculture can save farmers up to 40 percent in energy spending. Tack on the additional, related cost-cutting – like the decreased amount of power used on HVAC and the ability to stack layers of plants – and you’re looking at savings up to 55 percent.
Of course, outdoor and greenhouse growing is far cheaper and more energy efficient than indoor growing – with the sun clocking in at the ultimate price of free – but in many states, growing outside year-round is basically impossible. Other places, like Colorado, have enacted laws that make growing marijuana outdoors incredibly difficult, forcing most cultivators indoors. And because cannabis remains federally illegal and cannot be grown in one state’s warm weather and then shipped to another to be sold, far more pot warehouses are popping up than is truly necessary to meet the national demand for cannabis.
Which means that a whole lot of money, and a whole lot of energy, is currently being wasted on growing weed. The same quality and amount of cannabis could easily be produced for less money, with less of an impact on the environment. And for many producers, the difference between staying with the same old techniques and going energy efficient could end up being the survival of their business. After all, if Peters is spending less than half of what his rivals are spending to grow the same amount of pot, he has much greater chance of succeeding in the long term.
So not only are the indoor growers using LEDs helping to slow the eventuality of climate change, but three to five years from now, they might be the only indoor growers left standing.
“If you’re not figuring out how to be energy efficient as an indoor cannabis operator, your time in the competitive spotlight will likely be short-lived,” Smith says.
A whole lot of money, and a whole lot of energy, is currently being wasted on growing weed.
Lipton, CEO of leading online cultivation supply shop Growers House, says that in the past three years sales of LED grow lights on his site have increased sevenfold. Those that switch over are suddenly able to spend less money on cooling, as Peters did, as well as less on water and nutrients. And by giving farmers the option of safely stacking multiple layers of plants in a single warehouse, LEDs allow growers to make far more money than they could with HIDs in the same amount of space.
But many cultivators remain put off by the upfront cost of LEDs, which is generally more than that of other lights. Most utilities now offer rebates to offset those costs, but it can still take a few years for the investment in LEDs to pay off, especially taking into account any potential losses as a farmer figures out a new system for cooling, dehumidifying and feeding the plants.
“The hardest thing with growing is if you step out of your comfort zone and don’t have a war chest to make mistakes with,” Peters says.
And in some places, like Michigan, cultivation is regulated by plant count – not square footage. This means that growers are trying to produce the largest possible plants, not the most efficiently grown plants.
But perhaps the biggest reason why many indoor marijuana farms refuse to make the switch to growing with LEDs is a sort of intentional short-sightedness. A lot of the people growing legal weed right now want to get in, make a lot of money, and then get out. If you don’t plan on growing pot for more than two or three years, the economics of LEDs don’t quite make sense.
This can be frustrating for folks like Smith, as he and RII try to bring together growers, utility companies and lawmakers to find energy efficient strategies that benefit everyone. And in the end, many of the cannabis businesses that are getting started right now will likely fail. According to calculations done by cannabis industry expert Rob Hunt, the biggest market in the country, California, seems to have licensed the cultivation of about five to six times more pot than the market can consume.
So what will happen to all of these giant cannabis warehouse grows once all the green rushers cash out and overproduction kills off much of the industry?
Smith hopes that if any LED-enhanced facilities currently growing marijuana fail, they might ultimately be used to grow something far more quotidian: food.
In the produce world, growing indoors with vertical stacking and LED lights is well on its way to becoming a very big deal. Companies that do what’s known as “controlled environment agriculture” have investors like Jeff Bezos and Elon Musk’s brother, Kimbal.
“Everything we are doing to make cannabis more efficient can be transferred to the oncoming investments in controlled environment agriculture,” Smith says.
For now, Smith is focused on helping as many cultivators as possible become more energy efficient, which often means encouraging them to use LEDs. The RII plans to use the data it’s gathered to create a guidance document explaining the best ways to grow with LED lights, set to come out early this summer. And in some places, the push for LEDs is really working. In Massachusetts, for example, the recently developed cannabis regulations make it nearly impossible to grow any other way.
But if you get a weed growing license out east, just don’t expect someone like Peters to hop on the phone and tell you exactly how Eco Firma Farms does it.
“I want you to use LEDs,” Peters says. “I want you to realize you can do this, but I’m not going to invite you to the farm to read all our temperatures.”