April 22, 2019

Meet the World’s First Commercial-Scale Solar Project in Cannabis

In this episode of A Tech Moment, we speak with Tom DiGiovanni, CFO from Canndescent about how their facility implemented solar power to offset energy usage and set the standard for sustainable cannabis.



Despite challenges, Canndescent has become the first cannabis-related company to put forward a commercial scale solar project. Intending to begin a wave of sustainable, environmentally responsible, and sustainable business practices in the cannabis industry, Canndescent is bringing a deeper shade of green to this green industry.

However, Canndescent is no stranger to firsts. In fact, the company has set out to be an industry leader, breaking boundaries and stereotypes. The company became the first California-based cannabis company to achieve fully compliant banking. They were also the first company to begin marketing cannabis products by effects, breaking away from the popular strain marketing techniques. Now, in 2019, Canndescent is placed as one of the top flower brands in California.

CannabisTech spoke to Canndescent’s Chief Financial Officer, Tom Digiovanni, about their green initiatives, the challenges they faced and the benefits reaped by utilizing renewable energy.

Why the Transition to Solar Power?

Canndescent has been molded on a foundation of transparent business practices and noble ideals. The commercial grow facilities are energy intensive, and the company sought out a solution to reduce this environmental impact.

“We know that because we grow indoors. These facilities are fairly power intensive. And we wanted to offset how much power we use from the grid,” DiGiovanni stated. “And so, from the outset, the time that we put the facility together and opened it we were looking for an alternative energy solution. And it took a while to get it done. But, you know, we wanted to be the first one in the country actually to do site-specific solar,” he continued.

It is estimated that 1% of America’s power goes towards producing hemp and cannabis. To reduce their portion of this, Canndescent began seeking out funding for their unique solar project to adopt a source of renewable energy.

The Challenges Unique to the Cannabis Industry

DiGiovanni explained, “One of the challenges to get solar done in this industry, unlike any other industry is that it's really difficult to get somebody to fund these projects for you, and any other industry project financing for solar projects is relatively easy to come by. In cannabis that's not the case, it's been extremely frustrating because we want to do the right thing by the environment, we care about the environment that we all live in. We care about our carbon footprint, and we want to do things to reduce it. And so, you know, that's been the big challenge for this system.”

In most other industries, securing funding for solar projects is relatively easy. In the cannabis industry, DiGiovanni points out that this is not the case. PACE funding, Property Assessed Clean Energy, is a reasonably common avenue to secure this funding. However, after the coal memo was pulled in 2017/2018, investors began to be unsure about the security of investing in the industry,

DiGiovanni said, “Now that Jeff Sessions is gone, and the perceived risk in the industry might be a little bit lower than it was at the beginning of last year, right so if paste funding comes back for the industry then that will be an avenue that a lot of people. I know from my time in the summer and PACE projects, particularly in California, the loss rate for lenders using page is about point 3% so I mean these things are really, really secured loans that people don't walk away from. So, I hope that comes back because I'd like to see a lot of other cannabis companies go solar.”

The Benefits of Going Solar

Aside from lessening the carbon footprint, there are other benefits with the switch to solar:

  • Drop in peak energy use. Canndescent’s peak energy use has dropped by as much as 54%.
  • Drop in operating costs due to lower energy usage
  • Canndescent has used the solar panels to shade the buildings, lessening the load on the HC AV systems

Looking Ahead: What’s in Canndescent’s Future?

At present, the system is offsetting approximately 50% of its peak load, and due to site size limitations, using solar panels to offset 100% of the load was not an option. Since Canndescent grows hydroponically, not much water is used either. However, there are other sustainable options the team at Canndescent is looking at for future projects.

To reduce the power usage inside the facility, LED lighting and other projects are beginning to materialize. There are two more sites located nearby Palm Springs, one of which is beginning transformed into using 100% sustainable energy by using sustainable lighting and all four walls for solar.

Addressing another Sustainable Hurdle

LED lighting is a tantalizing option to reduce a company’s carbon footprint. However; there is one major problem; the risk of lower crop yields, which means a threat to profits. This risk has prevented many companies from moving towards this more environmentally responsible lighting system. However, with Canndescent’s partnership with Southern California Edison, they could unearth some new developments.

“We're also working with Southern California Edison right now. They've asked us to do some research and development on LED lights. And there's a potential funding process that they're going to provide us some funds to take a couple of our grow rooms, convert them to LED and see what kind of yields, from a harvest perspective, they get out of the LED lights.”

The transition to a fully environmentally responsible facility is not smooth for most, and as we’ve seen so far, in the cannabis industry, it is even more challenging. However, it is not impossible. Canndescent is an example to the industry, showing that with determination, it can be done.

“It’s been on the one hand a labor of love, and on the other hand, it's been kind of an effort through sheer force of will we made this happen. And it's, it's, it's one of those things that it's been relatively frustrating because it should have been a lot easier to get this project done. And I really hope that Congress passes to save Banking Act, or opens a path to banking because that will also open a pass the project finance, and you'll see a lot of other cannabis companies start to do this because I know we're not the only company having a conversation. And, of course, it helps when you're lowering your operating expenses. But we also, obviously we live in the environment too, and we're super mindful of that. And we want to be a good steward of the environment. “

For any questions regarding financing for solar initiatives or attaining renewable energy goals, Canndescent encourages people to reach out and ask for help or further information.