Community: The Power Behind the Cannabis Industry’s Momentum
Following the recent 20th anniversary of the September 11 attacks, I have been reflecting more often on community. The commemorative speeches served as powerful reminders of the unity we all felt in the days and weeks that followed. The word “community” was used often to describe how we came together to support one other and find common cause and direction in grief. Community is a powerful concept and a source of momentum that manifests itself in different ways.
Community has become a focal point for the cannabis industry. The industry has become a supportive, purpose-driven community I am proud to be part of – one that is developing with a level of speed and intention that is amazing. Just think about all the measures of industry growth experienced over the past several years, and the way public opinion suggests that legal cannabis is among the few bipartisan issues out there. We are clearly seeing something unique develop right in front of us.
As a nascent industry born out of a societal need, cannabis epitomizes community development of both people, place, and purpose, where collaboration creates scale that helps maximize social impact. While “community development” is most frequently associated with the built environment and activities more traditionally thought of as economic development, there are many different forms it can take. Each cannabis stakeholder is playing a role in enhancing local economies and supply chains, creating jobs, and adding to the tax base. But, we are also working together as a community to right the wrongs of the war on drugs, address issues of social equity, and move toward an industry that is environmentally sustainable.
The book “Asset Building & Community Development,” written by Gary Paul Green and Anna Haines, is often referenced when talking about “community sustainability.” In it, the authors discuss a widely accepted “community development process” that we at CohnReznick often see applied in our community development work. It is uncanny how analogous their framework is to things as diverse as a master plan in support of a large, multi-faceted real estate development, a single-asset real estate development project, or a new industry as unique as cannabis. The four steps to the process are organization, participation (often referred to as visioning), planning, and implementation and evaluation (or benchmarking).
The cannabis industry has been following an identical process as it moves from legislation to regulation to licensing to market activity. Along the way, collaborations form between the public and private sectors that culminate in economic scale and position the industry for sustainability from both a social and environmental standpoint. Here are some ways I’ve seen the cannabis community working toward those missions, and two examples of ways the SCC is supporting direct action ourselves.
Working toward…
Scale
We are witnessing scale within various state programs and across the country, albeit in different ways. Colorado and California, for example, have been in an adult-use environment for quite some time, but are still struggling to advance social equity and compete with illicit market participants. They find themselves still maturing, but they’re maturing differently from Michigan and Massachusetts, which have expanded quickly but are still struggling with industry stigma and the ability to maximize their potential.
Illinois and Missouri are two Midwestern states that have been industry darlings in some ways. Each took lessons from other states with greater longevity and a more accepting general population, but are experiencing a different dynamic than what is expected in the large markets of Connecticut, New York, and New Jersey.
State fragmentation means the markets are different. However, the lessons learned and the collaboration among those working on economic, environmental, and social impact can be shared and applied to help strengthen development across these markets.
Throw into the mix the most serious federal legislation initiative to date in the Cannabis Administration and Opportunity Act and we are in a truly exciting place. We should not be daunted by the fact that this is simply proposed legislation and likely won’t have the support in Congress (or the administration) to make much progress, and that many industry participants have issues with many of the provisions. The key takeaway is that we have momentum. This points to market growth and acceptance, which gets us closer to the kind of scale that is economically sustainable, and with additional emphasis to address social impact and – ideally – environmental impact.
In addition to growth in state programs and federal legislation, there has also been an interesting development whereby federal law is being used by cannabis companies to attempt to shut down illicit cannabis operators and, perhaps more importantly, those that aid and abet them. The Racketeer Influenced and Corrupt Organizations Act (RICO) – which had been used against state-legal cannabis operators for several years – is now being used by state-legal industry participants to do what authorities, particularly in California, have not been willing to do at a level that can even the economic and environmental playing fields.
Together, these legal and legislative activities are leading to unprecedented market growth and incremental revenue potential.
Sustainability
The SCC has been working on two key initiatives that have the potential to create market growth based on operational efficiency and to dramatically shift the cannabis sustainability trajectory. This marks a milestone to be celebrated, as the SCC has moved from education and awareness to influence.
The first initiative is a collaboration with ASTM’s Committee D37 on Cannabis, which has accepted a proposal for a new sub-committee that will develop sustainability standards for greenhouse gas emissions, water, and waste. These three areas are critical to ensuring smart growth in the industry, consistent product quality and safety, and equitable industry opportunity.
The initial scope is set to reflect standards based on the United Nations’ Sustainable Development Goals that are necessary for an efficient, transparent, and well-regulated industry. We will likely see the initiation of activities that promote measurement and reporting through the cannabis product supply chain, and possibly the creation of individual company and aggregate industry targets to hit by the end of the decade.
This expansion of a formally accepted standards process is a community-building exercise in which the industry is creating a level of collaboration around oversight in hopes of maximizing the social and environmental impact we are seeking.
The second initiative is a collaboration between a team of researchers from Dartmouth College’s Thayer School of Engineering and the Rocky Mountain Institute (RMI) that the SCC is working hard to support. The plan is to simulate the design of a “radically efficient” cannabis cultivation facility. The hypothesis is that analysis-driven design, modeled after other commercial and industrial experiences, can produce energy savings of 40-80% that will dramatically reduce cost. Additional savings can come from optimizing water usage, waste management, and labor deployment.
The massive levels of energy consumption and related carbon emissions currently coming from cannabis cultivation facilities drew the attention of this esteemed research team. They have confidence that their work that has led to dramatic operational and financial impacts in other industries, and with notable assets, can have a similar effect on cannabis cultivation.
This is a massive analysis of data, a review of business process and technology, and – as a collaboration among students, experienced researchers, and industry participants – another example of cannabis community development.
For the cannabis industry, getting to this point has not been easy, and we all have a long way to go. But the community is developing, and that is powerful. The real power of that development is in the ongoing opportunity to bring people together in an inclusive and equitable way. It is also about continuing to develop place in the form of cultivation and retail facilities that create quality jobs and contribute to the fabric of our neighborhoods. The purpose has been and must continue to be, about sustainability of the environmental and social variety with the kind of governance (think transparency) that will stand the test of time.
Join the SCC in this ESG journey. There will be plenty of opportunities to contribute and make a bigger difference for social and environmental sustainability while promoting the growth and success of the industry as a whole.
