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California Energy Mandate Burdens Cannabis Growers

Aug 27 2020, by Jessica McElfresh in Marijuana Business

The California Energy Commission’s (CEC) proposal for new efficiency standards for indoor and greenhouse cannabis facilities has California growers worried. All indoor cultivation operators, which are predominantly in the marijuana industry, would have to transition away from common grow lights, including metal halide or high-pressure sodium, to LEDs by January 2023.

If you have legal questions about current or proposed cannabis regulations in California, reach out to McElfresh Law at (858) 756-7107 for a consultation.

The Proposal

The new cannabis lighting standard in California refers to the Horticultural Lighting Minimum Efficacy provision in the Codes and Standards Enhancement (CASE) Initiative. It suggests a mandatory minimum photosynthetic photon efficiency (PPE) of:

  • 2.1 micromoles per joule for luminaires used for plant growth and maintenance in indoor growing facilities with more than 1,000 square feet of canopy.
  • 1.7 micromoles per joule in greenhouses with more than 1,000 square feet of canopy.

This efficiency rate is achievable with highly efficient LEDs, which are much more expensive than the average low-efficiency light fixture.

Transition Require Significant Upfront Cost

The intentions behind the proposed mandate are fairly reasonable. Indoor cultivators should strive for efficiency. But new grow light requirements with such a quick deadline mean a significant upfront investment.

Bob Gunn, CEO of Seinergy, estimates it would cost about $255 million for all of California’s indoor growers to change their lights to LEDs. It could cost $62,000 for every 1,000 square feet of canopy.

But, there’s a problem.

The vast majority of cannabis growers don’t use LEDs at all. Most would need to change over their entire lighting systems. Gunn found the mandate may require more than 95% of growing operations to transition, since only 4% of indoor facilities and 2% of greenhouses currently used LEDs. He compared it to mandating all households to buy a new electric vehicle without financial help within two years.

Mh2>New Lighting May Alter Production

Changing indoor grow operations to LED lighting sounds like a good idea. But doing it so fast has side effects.

As cannabis growers transition, they’ll have to adjust their cultivation process. It will take considerable care to avoid a decrease in production, according to Joe Callavero, vice president of production at Nimbus Cannabis. There’s also the chance many businesses will experience difficulties transitioning, and problems with supply could impact consumers.

It Also Benefits Elicit Cannabis Growers

Despite the legality of medicinal and recreational marijuana in California, there are still illegal growers, sellers, and buyers in California. This new lighting regulation contributes to black market sales.

Is the New California Energy Mandate Necessary?

Amber Morris, director of government affairs at NorCal Cannabis, pointed out another issue: cultivators are already considering the environment. They’re required to begin reporting environmental impact-mitigation efforts to the State by 2022 because of the California Environmental Quality Act (CEQA).

New grow light requirements place another burden on growers, already considering efficiency and following state guidelines.

Is There a Middle Ground?

Yes, there are other options. Gunn recommends California consider a five-year transition. A complete transition by 2023 would give businesses only two years to significantly overhaul their indoor operations. He also recommends financial incentives or loans to help businesses move from low-efficiency lights to LEDs in the five-year timeframe.

California Cannabis Growers Face Many Requirements

California’s cannabis industry is highly regulated. Cultivators and other businesses are used to sorting through rules and regulations to ensure compliance. But cannabis businesses don’t have to do it alone. They’re better off working with an experienced cannabis lawyer at McElfresh Law.

Jessica McElfresh has been an advocate for cannabis industry in California for years.

She helps clients obtain local cannabis licenses, including large cultivator licenses and advises new and existing businesses on marijuana regulations and compliance. She keeps a close eye on proposed changes, so her clients are always prepared.

To schedule a consultation at McElfresh Law, use our online form or call (858) 756-7107.