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Is Marijuana the Next Big Thing? Environmental Opportunities in the Cannabis Sector

Wednesday, August 16, 2017
Dave Rejeski

Dave Rejeski

Director; Technology, Innovation and the Environment Project

What is the most valuable crop in California? It isn’t almonds ($5.3 billion), strawberries ($1.8 billion), or grapes ($1.3 billion), but cannabis, now worth around $17 billion annually. In fact, cannabis is presently the fastest growing industry in the United States with over 30 percent per year compound growth according to preliminary 2016 revenues reported in Colorado by the Marijuana Enforcement Division.

Three centuries ago, marijuana’s genetic cousin, hemp, was a major cash crop in colonial America. States like Connecticut, Massachusetts, and Virginia actually required farmers to grow it in the 1600s. In the late 19th and early 20th centuries, cannabis sativa existed on the Pharmacopeia list and was used to treat stomach problems and other ailments. Then, in 1937, it officially disappeared into the black market after the passage of the U.S. Marijuana Tax Act (later reinforced by the Controlled Substance Act of 1970 making cannabis a Schedule 1 drug).

Today, 26 states and the District of Columbia have passed laws allowing medical marijuana use and eight states allow recreational marijuana use. Though the social and health implications of cannabis have been hotly debated, the environmental impacts and opportunities offered by the rapidly expanding cannabis industry have received far less attention, despite calls to add the environment to the conversation on marijuana liberalization.

The booming U.S. cannabis industry creates significant environmental impacts and opportunities for innovation (Photo: Wikimedia Commons).

Think of cannabis as a high-value agro-industrial system, one that offers significant opportunities for technological and regulatory upgrades. Now add in the capital needed to support technological innovation and a new cadre of growers committed to engineering a more sustainable production system. This combination of factors rarely exists in the environmental field. If one is looking for a testbed for experiments in sustainable production, extended producer responsibility, the circular economy, industrial symbiosis, or any of the other post-modern environmental paradigms, the cannabis sector is a leading contender.

Growing cannabis, especially indoors, is energy-, water-, and nutrient-intensive. Independent research is almost non-existent, but estimates are that cannabis production in the United States now consumes about one percent of our nation’s electricity, which translates into about $6 billion per year, six times more than the pharmaceutical industry. Coverted into CO2 emissions, cannabis production equals the output of around 3 million average cars. Much of the energy is used for lighting and ventilation (around two-thirds) with the remainder going for heating/cooling, water handling, and transportation. In addition to energy, cannabis is a high water use plant, consuming up to 23 liters per plant per day, almost double that of wine grapes cultivated in northern California.

While outdoor cultivation significantly reduces the crop’s energy requirements, it has historically brought with it other environmental problems such as the overuse of pesticides and rodenticides (which have endangered species like the California fisher), stream water diversions that affect aquatic and riparian dependent species, and impacts from land clearing (often associated with illicit production). Studying the environmental impacts of outdoor cultivation has been further complicated by threats to wildlife biologists from owners of illegal operations. Legalization has brought with it the opportunity for more comprehensive studies of environmental impacts and mitigation options as well as a wholesale upgrade of the technological infrastructure underpinning production.

The spillover effects of the cannabis industry on other sectors are likely to be significant. For instance, the CEO of Scott’s Miracle-Gro has called the cannabis industry, “the biggest thing I've ever seen in lawn and garden.” Other sectors are similarly optimistic, including industries developing energy-saving, high-intensity lighting; HVAC control systems; integrated pest management approaches; software for business management (like Flowhub); innovative financial technologies (so-called “fintech”); and market and consumer research.

Still, cannabis faces an uncertain regulatory future that extends beyond the legalization debates. For instance, EPA has not weighed in on pesticide standards and testing for cannabis under the Federal Insecticide, Funcigide, and Rodenticide Act (FIFRA); leaving the industry dealing with a patchwork of state laws. Some states, like New Hampshire, restrict growers to the use of organic pesticides or ones already considered exempt under FIFRA §25(b). Other states, like Washington, have proactively requested guidance from EPA, which is grappling with whether cannabis is a crop or a controlled substance. Legal uncertainties can reduce environmental opportunities in other areas such as post-consumer recycling. For instance, cannabis residues on vapor cartridges affect aluminum recycling and interstate transport of used materials, resulting in a greater use of virgin metal with its associated high-energy requirements.

The cannabis industry could become a leading technological innovator and testbed for other innovations, from lighting to fertilizers or packaging systems. However, given the legal status of the industry, it is unlikely that producers will benefit from focused government investments in R&D that have benefited other sectors, like aerospace or semiconductors. The lack of a coherent technology roadmap and industrywide strategy could result in sub-optimal investments in R&D and technology commercialization efforts, which limit sectorwide benefits.

R&D and innovation needs go beyond the hardware needed to grow the crop and also include the research needed to characterize the cannabis plant itself and engineer its biology. Despite its 6,000-year-old history, we know very little about cannabis genetics; the Cannabis genome was first sequenced in 2011. The illicit nature of the crop has resulted in few public repositories of germplasm or accessible collections of strains that can be used for analysis, genetic characterization, and ultimately crop improvement efforts—from reducing nutrient and water requirements to improving photosynthesis. New tools from gene editing to approaches for speed breeding and crop transformation could be used to engineer strains with high potency, greater purity, and less pollution.

An Ecological Design Approach to Cannabis Production

In Liverpool, Nova Scotia, a small, coastal community an hour-and-a-half drive northwest of Halifax, a 70,000 square-foot building is being repurposed as an indoor growing facility for medical marijuana and is being designed to minimize environmental impacts—reducing water use by over 90 percent, energy by 70 percent, and eliminating the use of synthetic fertilizers or pesticides. The approach harks back to the ecological design principles pioneered by Canadian John Todd at the New Alchemy Institute on Prince Edwards Island in the 1970s.

The firm Aqualitas is using aquaponics, a growing system that combines hydroponics (soilless growth) with aquaculture (raising fish). In this case, the system uses Koi fish to create nitrogen and other nutrients for the cannabis plants, which pass back filtered water for the fish—creating a closed loop ecosystem where waste products produced by one species are used by another. The long life span of the Koi, typically 15-20 years, allows an ecological equilibrium point to be reached in under 12 months and maintained over a long period of time.

Electricity use is being reduced through the use of LED lighting (instead of normal high-energy sodium lights), recirculation incorporates gravity design, and cooling for the facility is anticipated to use water from the nearby ocean as well as conventional systems. High wind speeds along the coast may provide additional energy for the facility, as well as solar further contributing to a reduction in overall environmental footprint.

The United States will no doubt be a major player in the future of cannabis, but not the only player. Our neighbor to the North is moving toward nationwide legalization of marijuana in 2018, fulfilling a campaign promise of Justin Trudeau. Based on recommendations from a recently established task force, the legislation is designed to remove ambiguity around production, distribution, sales, and use of marijuana. Cannabis producers and users in Canada will see more predictable and transparent regulation that rewards environmental stewardship and appropriate security measures.

The U.S. cannabis industry would benefit from strategic R&D efforts, greater regulatory harmonization and transparency, wide sharing of best practices, and better base line data (in areas like energy, water, and nutrient use, for instance). Efforts in some of these areas are occurring, aided by groups like the Resource Innovation Institute and states with progressive cannabis programs like Colorado and California, but more could be done and existing efforts accelerated with strategic investments. Innovative approaches that reduce energy and environmental impacts could be supported using a portfolio approach, which combines direct investments, awards (an Energy Star-type award for low-impact production, for instance), prizes and challenges (the Cannabis-X prize), and methods to rapidly disseminate pre-competitive knowledge. The sector could also benefit from scenarios for a plausible and efficient regulatory system that provides transparency and predictability for investors, growers, and consumers.

Industry transformations at this economic scale rarely happen and environmentalists need to pay attention to the opportunities created for both technological and policy innovation involving energy, water, land use, and a range of chemicals and pollutants. Cannabis producers have challenged themselves to “make cannabis the most sustainable industry on the planet,” but technological inertia, public perceptions and misconceptions, and regulatory ambiguity could make this an illusive objective.