The $3.5 billion cannabis industry is one of the nation’s most energy intensive, often demanding 24-hour indoor lighting rigs, heating, ventilation and air-conditioning systems at multiplying grow sites.
Legal cannabis cultivation in the U.S. consumes an estimated 1.1 terawatt-hours of electricity a year, according to the 2018 Cannabis Energy Report, published by Scale Microgrid Solutions along with New Frontier Data and the Resource Innovation Institute. Companies managing these solutions are great ways to diversify your cannabis industry risk.
Indoor growers are looking to cut spiraling electricity consumption with custom-built microgrids in U.S. states where cannabis cultivation is legal. A company that seems to be in the right place at the right time to capitalize on this huge market inefficiency is CleanSpark, Inc. (CLSK)
CLSK has a unique microgrid solution for the cannabis industry. Their mPulse software reduces the monthly electricity bill of indoor grow-houses by up to 82%! They do this by virtually eliminating the demand charges that can account for almost 50% of the utility charges for such a facility.
Pressure is mounting on the cannabis industry to improve its margins after a lackluster 3rd quarter, companies like CLSK can help do just that.
The company just released an impressive letter to shareholders highlighting: an agreement for an $18.3 million ‘Zero Net Energy’ Microgrid with an S&P 500 Member Real Estate Investment Trust (REIT), near completion on a $900,000 contract to install a ‘turn-key advanced microgrid system’ at the U.S. Marine Corps Base Camp Pendleton, has been awarded 2 patents, and updated an acquisition that could be a huge boost to the company’s year end revenues.
CLSK’s acquisition, Pioneer Custom Electrical Products, has delivered $32 million in products since 2016 and has $5 million in backlog. They have also received a $2.4 million equipment order as part of a contract for the new U.S. Embassy in Beirut, Lebanon which should end up on CLSK’s balance sheet.
Another company, Dominion Energy provides nearly 6 million customers in 19 states with electricity or natural gas, headquartered in Richmond, VA. The company is committed to sustainable, reliable, affordable, and safe energy and is one of the nation’s largest producers and transporters of energy with nearly $80 billion of assets providing electric generation, transmission and distribution, as well as natural gas storage, transmission, distribution, and import/export services.
