Marijuana Business Magazine January 2019

January 2019 | mjbizdaily.com 79 W hen California marijuana dis- pensary owner Chris Jennings decided to apply for a cultiva- tion license in 2016, he helped organize a meeting for growers to discuss water and other natural resource regulations with several city and county officials. That meeting, attended by about 80 growers, helped. But it provided only a fraction of the information Jennings and other growers in Lake County would need to meet county and state environmental requirements related to: • Water and air quality. • Energy use. • Waste discharge. • Wetlands, rivers, fisheries and plants. • Pesticide use. • Even “cultural resources” such as ancient human artifacts. All were on the list of potential impacts that needed to be assessed and remedied. “We’re talking about every aspect” of the business, said Jennings, owner of Lakeside Herbal Solutions, a medical and recreational marijuana dispensary in the Northern California city of Clearlake. At the time, Jennings was planning a growing and processing operation called South Lake Farms in the same town. Jennings wound up hiring a handful of consultants and spent tens of thou- sands of dollars to produce a 126-page environmental assessment detailing his planned cultivation and processing op- eration to meet state and local require- ments. At press time, he was awaiting final state license approvals but expected to get them soon. Consultants can help a cannabis grower navigate the environmental requirements that local and state gov- ernments increasingly are imposing on cultivators. Going it alone, by contrast, can prove time consuming—and ulti- mately costly if a grower is found to be violating the rules. Moreover, experts agreed, investing in environmental improvements and efficiencies—even beyond those required by law—may mean the difference between success and failure in these days of razor-thin wholesale margins among growers. “Cultivation is becoming a commod- ity, so energy (and other) costs need to decline so growers can make their margins,” Brad Queen, founder of Cube Resources, said at a recent cannabis sustainability conference organized by the Denver health department and presented by the Cannabis Certification Council. Cube Resources is a Colorado company that helps businesses reduce their energy costs by analyzing and optimizing their loads. ENVIRONMENTAL RULES ON THE RISE Nationwide, marijuana regulators are ratcheting up environmental re- quirements, especially in the use and management of energy, water, waste and pesticides. The trend will likely contin- ue because of concerns about climate change and the impact marijuana growers are having on natural resourc- es ranging from water use to pesticide contamination. What makes it especially challenging and financially burdensome for marijua- na operations is that regulations differ from place to place. They also are often revised—and a change in one aspect of an operation can affect another. For example, a regulation in Mas- sachusetts limiting indoor marijuana cultivators to a certain lighting density can affect everything from the size of an HVAC system to the growth and health of the plants themselves. Derek Smith, executive director of the Resource Innovation Institute, said it’s important for cannabis business owners to figure out how they want to confront the growing number of environmental requirements. Smith’s nonprofit research organization, based in Portland, Ore- gon, promotes energy and water conser- vation in the cannabis industry. “Do we want to lead? Or do we want to be regulated because we chose not to raise the bar?” Smith asked during the Denver sustainability symposium. REGULATORS CAN HELP Environmental impacts weren’t exactly high on the to-do lists of government officials when many states legalized med- ical or recreational marijuana. Instead, cannabis regulators were concerned about the black market and public safety, which encouraged mostly indoor oper- ations. In fact, some areas around the country allow only indoor cultivation. “In Colorado, we kind of created our own environmental disaster, forcing everyone (mostly cultivators) indoors,” where much more energy is consumed, Kaitlin Urso, environmental protection specialist at the Colorado Department of Public Health and Environment, told the Denver symposium. Regulators in many jurisdictions want to help MJ businesses figure out how they Cannabis growers face increasing state and local requirements to assess and reduce their environmental footprints—especially in the areas of energy use, water, air quality and waste and pesticide management. The regulatory red tape is sure to mushroom amid worries over climate change and the cannabis industry’s impact on natural resources. Here’s what cultivators can do: • Work with regulators and utilities. Both have an incentive to help cannabis businesses become more efficient and reduce their environ- mental impact. • Shop around for an environmental consultant who can help your busi- ness comply with ever-changing regulations. • Expect greater scrutiny. Some areas, such as in California, are particularly tough when it comes to reviewing and approving proposed projects. • Monitor monthly electricity bills and calculate the benefits and costs of equipment upgrades. Go after low-hanging fruit first.