As the cannabis industry continues to make headlines about its impact on the environment and climate change, a changing climate will in turn impact the cannabis industry.
Researchers at the University of California at Berkeley, led by Christopher Dillis, published a paper in September of this year showing for the first time the dollar figure financial impacts of wildfires, and wildfire smoke, on California – one of the world’s largest cannabis economies.
Through using data from California Department of Forestry and Fire Protection, smoke plume mapping, and cultivator surveys they were able to estimate economic losses in 2020 and 2021 were as high as $1.44 billion and $970 million respectively, due to wildfires.
“There were impacts all over. Northern California was the worst…2020 was, as I usually say, like an apocalypse.” lead researcher Dillis says.
Wildfires have been a serious problem around the world in recent years. According to the National Wildland Fire Situation Report, 2023 marked the worst wildfire season on record in Canada, a year in which more than 17.8 million hectares burned. Mapping the financial impacts of wildfires will be critical for the future of the cannabis industry, says Dillis.
Dillis and his team at Berkeley examined proximity to wildfires, percentage of growing season under a smoke plume, and used reported impacts from farmers to determine what were the likely financial impacts, and what was the likelihood of crop failure. The result was significant financial losses.
“And we found that wildfire smoke has a bigger impact than just proximity to wildfire,” says Dillis. He further explains how the correlation between smoke and the actual source of a fire is not extremely strong. Smoke has the ability to travel great distances, sometimes dropping down miles away from where the fire originated.
The same is true in reverse says Dillis. There are also fire impacts near the source that aren’t smoke plume related. “When you’re close to a fire…you can still have impacts as a result of power outages, evacuations, loss of site access.” The two are considered separately, and “we found that smoke had a more substantial effect than just distance to welfare,” he says.
There are steps governments and producers can take to work together to mitigate cannabis agricultural losses, and that plans need to be made as wildfires will continue to be a problem.
Dillis suggests implementing a subsidy or official acknowledgment through a fund that could be set up to compensate LPs for their losses.
Changing practices in a changing climate
Canada’s worst wildfire season on record comes on the heels of increasing reports about the carbon emissions output of the cannabis industry, and the massive energy consumption related to cannabis production. Canopy Growth made headlines in January 2022, when their ESG report found Canopy’s emissions were equivalent to burning over 65 million pounds of coal. However, some companies are making changes in a positive direction.
Recently, Wyld, an Oregon-based company that produces cannabis infused edibles, became the first Climate Neutral Certified cannabis company in North America.
Official Climate Neutral Certification is granted by The Climate Change Project, a non-profit organization, partnered with a diverse range of stakeholders, to help companies of all backgrounds calculate their carbon output and then put in place a plan to reduce or offset their emissions. The process for obtaining Climate Neutral Certification isn’t easy, but it is important for those companies that want to get serious about the climate.
“Climate Neutral has stringent requirements to achieve Climate Neutral Certification,” explains Gray. “Being verified by a third party, like Climate Neutral, helps validate the work we’re doing.” With 60 billion tonnes of greenhouse gasses being emitted each year, it is important for the cannabis industry to take a lead on climate action, says Gray.
Along with their Climate Neutral Certification, Wyld has produced a truly unique, 100 per cent compostable packaging, with the first compostable child resistant zipper.
“At Wyld, we’re acting now because scientifically vetted solutions to climate change exist,” says Gray.
Some say the future is sun-kissed
As more cannabis producers begin to look at reducing their carbon emissions, many may turn to outdoor production, and abandon the costly and energy intensive indoor model, says sales director Chris Becker of The Honeybee Collective, an employee-owned cannabis brand.
“Indoor growing really is pretty detrimental to the environment. It uses a ton of energy, and why do it when the sun exists, right?” questions Becker enthusiastically.
The Honeybee Collective was a brand idea born from a passion of sustainability that promotes earth and people friendly practices, says Becker. Based out of Colorado, The Honeybee Collective focuses on environmental sustainability through the use of recyclable and compostable packaging, regenerative farming practices such as no-till soil, composting and water retention. And they prioritize outdoor grown, or at least “sun-kissed” cannabis, sourcing their product from growers with outdoor fields, greenhouses and hybrid facilities.
Becker believes exciting research about sun grown cannabis will shift the market of production. Most interestingly he says, recent studies have shown that outdoor grown cannabis produces terpenes and cannabinoids at a more diverse expression. This diversity in the minor cannabinoids arguably creates a better high for the consumer. This says Becker, could be a primary driver for increased outdoor production.
“A more diverse array of minor cannabinoids tends to lead to a more enjoyable and longer lasting high, relative to just a high THC strain,” says Becker. “I think that outdoor cannabis can be equivalent or superior to indoor on almost every metric except bag appeal…but I do think that [sun grown’s] a superior product.”
Becker believes that as the cannabis market continues to mature and become oversaturated, it will be inevitable for growers to move to outdoor production as LPs realize it’s not economical to grow indoors below a certain price per pound. Thus, the cannabis market may find itself in a bind moving forward as energy costs and carbon output concerns move market participants towards outdoor grown cannabis, and environmental related issues, such as wildfires, make outdoor grown more precarious, unless strategies are put in place.
While Canada’s climate of course differs from the United States, still some see the same value.
Canadian LPs are ready to change – are governments?
North of Toronto on the shores of Lake Simcoe, one Canadian LP, Carmel Cannabis, has also experienced the benefits of “sun-kissed” cannabis, utilizing a hybrid greenhouse in their operation. Ontario sales manager John Strauss says the 19,000 square feet of sun exposed flower allows significant reductions in energy costs, while also producing staggeringly high terpene levels.
“When you’re harnessing the natural sun, you’ve got the full equation…the biggest thing we notice with our [hybrid grown] flower, the terpenes are just way higher,” says Strauss. “We’ve gotten up to 6 per cent…which is like something we never even thought was possible.”
But there are challenges to the hybrid greenhouse says Strauss. The bud structure a hybrid greenhouse produces is different than what customers may be accustomed to from full LED, there isn’t climate control, so on hot days the plants can become stressed which means they need to be fed more, and bugs and pests become more prevalent. However, Strauss says the benefits of a hybrid model outweigh any added concerns, as the benefit for the environment, and energy cost reductions is a boon for Carmel’s bottom line. And while Strauss and his team at Carmel Cannabis are concerned about the environment and carbon footprint of the cannabis industry, current economic realities are making further changes complicated.
“I think a lot of companies are just doing whatever they can to survive and their carbon footprint is kind of on the backburner,” says Strauss. “Our founders are pretty passionate about doing everything we can to lower the environmental footprint…The unfortunate reality is the environmental side is often ignored in any industry that’s kind of in its infancy.”
Strauss says that while the team at Carmel care about their environmental sustainability, assistance from governments would go a long way in making visions of a more sustainable industry a reality. Encouraging companies to switch over to more efficient LED lighting, and offering environmental sustainability subsidies would go a long way to improve the industry.
“Hopefully down the line a lot of companies are more aware of the carbon footprint and maybe even [the government] offering services to calculate your carbon footprint would be great,” explains Strauss. “Because to get a company to come in and audit your carbon footprint, we’re talking a considerable amount of money to get something like that done.”