Key points:

• U.S. electricity prices rose 5.9% in the 12 months ended May 31, creating another sore spot for energy-intensive cannabis growers.
• Increased usage due to AI data centers and increased fuel costs related to the war in Iran are driving up electricity costs.
• Growing cannabis indoors uses about 50 times more energy per square foot than an office building.
• This increases the overall costs of producers and reduces profitability, as pressure from the illicit market means that operators cannot pass the costs on to consumers.

Tiana Arriaga watched helplessly as her electric bills rose by tens of thousands of dollars a month.

As vice president of product and marketing for vertically integrated marijuana operator Standard Wellness, which has marijuana farms in Missouri, Ohio and Utah, she manages facilities with full environmental automation: air conditioning, humidity control and lighting all run non-stop, creating yet another headache for a company struggling with low margins.

Arriaga said energy costs for Standard Wellness have risen 8-12% over the past 16 months as large data centers and the war in Iran drive up U.S. energy costs.

“That may not seem like a small number, but it’s a pretty big step when you’re running a vertical operation like ours,” she said. “Natural gas has also skyrocketed in price, and we’re seeing a 46% increase over the last two years.

“If you have extra expenses on the housing bill, it’s expensive. In cultivation businesses, it’s astronomical.”