By Erick Giles, Esq.
Beginning January 1, 2023, California law will require state licensed cannabis cultivators to account for their greenhouse gas emissions. The Renewable Energy Requirements of the Cannabis Cultivation Program require “all indoor, tier 2 mixed-light license types of all sizes, and nurseries using indoor or tier 2 mixed-light techniques” to meet the average electricity greenhouse gas emissions intensity established by their local utility provider. California Code of Regulations, Div. 19 Dept. of Cannabis Control, Art. 4. § 16305 (https://cannabis.ca.gov/wp-content/uploads/sites/2/2021/07/Regulations_Section100_2021-0615-06N.pdf). Tier 2 mixed-light cultivation means the cultivation of mature cannabis using a combination of artificial light at a “rate above six and below or equal to twenty-five watts per square foot.” Id. at § 1600. If the licensee’s average weighted greenhouse gas emission intensity is greater than the local utility provider’s greenhouse gas emission intensity, then the licensee must purchase greenhouse gas carbon offsets to cover the excess in carbon emissions. Id at § 16305 (a). Beginning on January 1, 2022 application for license renewals must include records for each power source used in the previous annual licensed period to show the average weighted greenhouse gas emission intensity of all electricity sources. Id. at § 16203. New licensees, without a record of weighted greenhouse gas emissions intensity from the previous calendar year, shall report the average weighted greenhouse gas emissions intensity, used during their licensed period at the time of license renewal. Id. at 16305 (b).
Voluntary greenhouse gas offset credits may be purchased from carbon registries approved by the Department of Cannabis Control or through the American Carbon Registry, Climate Action Reserve, or Verified Carbon Standard. Carbon offsets, also known as carbon credits or greenhouse gas offsets, represent the reduction or removal of one metric ton of greenhouse gas emissions through a carbon offset project activity. There are many different types of projects that implement various land management activities to produce carbon offsets including the following:
- avoided deforestation;
- restoration of grasslands – rangeland management, composting;
- methane destruction – landfill gas mitigation, livestock management, coal mine mitigation;
- renewable energy development, and
- industrial gas mitigation – reduction in nitrous oxide emissions, destruction of ozone depleting substances
In most cases carbon offset projects produce social and environmental collateral benefits including enhanced air and water quality and biodiversity and habitat conservation. Several Drummond Woodsum attorneys work with multiple private landowners and Tribal nations to develop carbon offset projects listed with the various carbon registries. Our prior work included development of a grassland restoration and preservation on the Fort Peck Assiniboine and Sioux reservation in Montana and the Lower Brule Sioux reservation in South Dakota. Currently, Drummond represents Tribal nations developing forest management projects on the Passamaquoddy Reservation in Maine and the Mississippi Band of Choctaw Indians. Outside of Indian country, Drummond works with private landowners and non-profit land trusts to develop forest carbon offset project types.
For more information, please contact a member of Drummond Woodsum’s Licensing and Regulatory Compliance division.