Some cannabis growers built on the assumption that power would stay cheap. That bet has gone bad.
Electricity rates are up 15% to 25% over the past two years with no ceiling in sight through 2030, according to Jim Kordoban, founder and CEO of On Point Power, a Dallas-based power procurement and energy management brokerage. At the same time, wholesale cannabis prices have collapsed 40% to 70% from their peak. For an industry that runs on razor-thin margins and energy-intensive indoor cultivation, that combination is not a footnote. It is becoming the defining pressure point.
“For facilities where energy can eat up a quarter of production costs, the winners won’t be the ones who simply use less power,” Kordoban said via email. “They’ll be the ones who lock in the right rate structure, hedge exposure and negotiate supply contracts before the market moves again.”
