Energy Procurement | May 21, 2021

Cannabis Cultivators Increasing Profitability through Energy Management

The cannabis industry is the fastest growing industry in the country; however, many marijuana businesses face obstacles that make it more challenging to generate a profit.

The reality is that this is a highly regulated industry, and those regulations vary from town to town and can change daily. Since cannabis companies do not have the same financial advantages as others, they must capitalize on the available opportunities to ensure success. Many profitable marijuana businesses have proven that you can succeed in this industry if you are savvy enough.

Since it is one of the growers’ largest business expenses, energy consumption has quickly become one of the most popular topics among savvy legalized marijuana businesses and its communities. Energy bills can often make up as much as 40% of a budget.

According to EQ Research in their report A Chronic Problem: Taming Energy Costs and Impacts from Marijuana Cultivation, the number one recommendation from marijuana industry associations is to invest in energy management.

Cannabis cultivators who are focused solely on meeting regulations and capturing market share may overlook the financial value of sustainable energy management planning. Many cultivators may not even know there are options available to control their electric and natural gas energy expenses and miss opportunities to save.

An energy management plan can secure financial success by maximizing a business’s profits.

As the legal cannabis industry continues to expand, the energy industry is preparing for the intensive demands of cannabis cultivation. Cannabis cultivators face a complex environment that involves differing regulations and procurement protocols; however, there are many rebate possibilities and energy sourcing opportunities available, as well as continually changing technologies within the industry. It is crucial for growers to prepare for external factors that can impact their business, both negatively and positively.

Although navigating the energy industry and making smart purchasing decisions about energy buys can be one of the most challenging aspects of running a grow business, it is also one of the most critical parts to get right.

Controlling the energy costs associated with indoor cannabis cultivation should be a top priority for the business, but most entities lack internal sustainability and energy-management expertise. For those businesses, partnering with an energy professional can be financially beneficial.

Energy professionals work closely with growers to buy, generate, and use power more efficiently, as well as reduce costs and impacts on the environment. They are able to leverage specialized knowledge, which includes a thorough understanding of the utility service and rate tariff pricing schedules for electric and natural gas, to help business owners manage expenses, optimize cash-flow, and maximize profitability.

Before a business begins researching an energy professional to partner with, it is essential to understand which key attributes to consider to ensure a successful relationship. A successful relationship with a knowledgeable broker that has a great deal of experience and prioritizes their clients can be highly beneficial and valuable to businesses. Although it may take extra time and effort, selecting the right broker can be well worth the investment.