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US (CO): Launch of Cannabis Resource Optimization Program to improve energy efficiency in cannabis cultivation

The Colorado Energy Office (CEO) announced that it will open its first-ever round of applications for its new Cannabis Resource Optimization Program (CROP) on February 15, 2023. Colorado is leading the charge on sustainability in the cannabis industry with this first-in-the-nation energy management program to reduce greenhouse gas (GHG) emissions and energy costs for businesses in the cannabis industry.

Cannabis cultivation is a resource-intensive industry that accounts for an estimated 2% of the total electricity used in Colorado, according to the 2018 Energy Use in the Colorado Cannabis Industry report. Additionally, energy costs make up nearly one-third of cannabis cultivators' operating budgets. To address this energy burden, the CROP program, which is funded by the 2022 "Air Quality Improvement Investments" bill, will provide free technical assistance and access to financing for cannabis cultivators in Colorado. The development of the CROP program comes after the successful Colorado Cultivators Energy Management Pilot Program.

"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," said Governor Polis. "Providing innovative ways for cannabis cultivation operators to improve energy efficiency will save business owners money and reduce energy use in the industry."

The Colorado Energy Office has contracted Resource Innovations to provide technical assistance for this program. This includes a facility audit and analysis of historic electricity, gas, water, and other resource usage to identify impactful efficiency improvements, such as installing LED fixtures or upgrading HVAC systems. Cannabis cultivation business owners will then work with the Colorado Clean Energy Fund to secure low-interest financing to implement these improvements.

Due to a lack of federal laws regulating cannabis production and distribution, banks have been reluctant to provide affordable financing options for cannabis businesses — even in states where its use and sale are legal. Without access to low-interest financing options, cultivators are unable to invest in efficiency improvements that could not only save them and their customers money, but could also help reduce emissions from the cannabis sector as a whole.

"Cannabis is a legitimate business in Colorado and 20 other states across the country, yet cannabis businesses are completely shut-out of the financing opportunities that are available in other industries," said CEO Sustainable Cannabis Program Manager Elizabeth Lee. "The state recognizes that cannabis cultivation uses a substantial amount of energy and created the CROP program to provide
unprecedented access to low-interest loans for improvements that ease this financial burden on Colorado businesses."

On February 15, 2023, 11:30 AM - 12:30 PM MT, the Colorado Energy Office will host a webinar for Colorado cannabis cultivation business owners to learn more about program details, facility audits, financing, and applying to the program. Register to attend the Cannabis Resource Optimization Program Launch Webinar here.

Cannabis cultivation business owners in Colorado will find the program application on the CROP webpage starting February 15. This first round of applications will be open to cultivators who are seeking technical assistance and do not already have access to assistance through their utility providers. Technical assistance and rebates for energy efficiency improvements are currently available to customers of Xcel Energy, Black Hills Energy, and Platte River Power Authority. More information about these utility programs can also be found on the CROP webpage. An application for financing only will be available to all cannabis cultivation businesses in Colorado later in the year.

For more information:
Colorado Energy Office 
energyoffice.colorado.gov 

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