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Colorado Officials Launch New Program To Fund Marijuana Industry Energy Efficiency



Walking the downtown streets of a state where marijuana is legal, you might see litter from the commercial cannabis industry: castaway baggies and joint tubes that contribute to the growing global crisis of plastic waste. What’s less visible is the industry’s demand for resources like water and energy, an appetite that state governments are now trying to curb.

In Colorado, cannabis cultivation comprised 2 percent of the state’s total energy use, according to a 2018 report from the Colorado Energy Office (CEO). In the years since, the industry has only grown.

Electricity is pricey for growers too, the report found, eating up roughly a third of cultivators’ operating budgets.

Next week, Colorado officials will begin accepting applications from state-licensed marijuana cultivators for a new program aimed at reducing the industry’s energy footprint. The effort will provide low-income financing and technical assistance to growers, focusing on ways to promote more efficient use of electricity, gas, water and other resources. The assistance includes a facility audit and historic analysis of resource use, as well as identifying possible improvements.

“Colorado was the first state to legalize cannabis and now will be the first state to help licensed cultivation operators make their operation more energy efficient,” Gov. Jared Polis (D) said in a press release on Thursday. “Providing innovative ways for cannabis cultivation operators to improve energy efficiency will save business owners money and reduce energy use in the industry.”

After identifying possible improvements, the release says, businesses will then work with the Colorado Clean Energy Fund, the state’s green bank, “to secure low-interest loans to implement these improvements.” The bank was formed in 2018 and funded by state lawmakers in 2021.

Applications for the Cannabis Resource Optimization Program, or CROP, will open next week, on Wednesday, February 15, following an 11:30 a.m. Zoom meeting that will provide more information about program details and how to apply.

CROP’s focus on energy reflects that the licensed marijuana industry uses much more of Colorado’s electricity than it does the state’s water. While cultivation accounted for about 2 percent of energy generated in the state, CEO’s 2019 report found that the industry made up less than half a percent of the state’s annual water consumption.

As more commercial sectors confront the need for efficiency and sustainability in the face of worsening climate and environmental conditions, access to funding to make improvements is especially important for cannabis companies, said Elizabeth Lee, who manages CEO’s sustainable marijuana program. Due to the federal prohibition of cannabis, state-legal businesses are typically unable to access traditional financing through commercial banks or federally funded programs.

“Cannabis is a legitimate business in Colorado and 20 other states across the country,” Lee said in a statement, “yet cannabis businesses are completely shut-out of the financing opportunities that are available in other industries.”

Without access to financing options, CEO says, cultivators are unable to invest in improvements that “could not only save them and their customers money, but could help reduce emissions from the cannabis sector as a whole.”

Colorado lawmakers earmarked $1.5 million for CROP in a bill signed into law last year to reduce air pollution from state industry and manufacturing.

In 2020, the Colorado launched a more experimental program aimed at using cannabis cultivation to capture carbon from another regulated industry: alcohol. The state Carbon Dioxide Reuse Program Pilot Project involved capturing carbon dioxide emitted during beer brewing and using the gas to stimulate marijuana growth.

Despite Polis’s claims that Colorado is the first to help marijuana growers make their operations more efficient, the state isn’t alone in funding or otherwise promoting a greener marijuana industry.

Last year California awarded $1.7 in grant money to sustainable cannabis growers, part of a planned $6 million in eventual funding.

And in New York, where legal sales began earlier this year, regulators have set rules meant to promote environmental awareness, for example by requiring businesses to submit an environmental sustainability program and explore the possibility of reusing cannabis packaging. Lawmakers there have also explored promoting industry recycling programs and cannabis packaging made from hemp rather than synthetic plastics, though neither proposal has been enacted.

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Photo courtesy of Chris Wallis / Side Pocket Images.

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Ben Adlin, a senior editor at Marijuana Moment, has been covering cannabis and other drug policy issues professionally since 2011. He was previously a senior news editor at Leafly, an associate editor at the Los Angeles Daily Journal and a Coro Fellow in Public Affairs. He lives in Washington State.


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