Cannabis Energy Costs as a % of COGS: Industry Benchmarks

The published figures, with who said them

There is no single audited number for what energy costs the cannabis industry as a share of cost of goods sold. What exists is a set of estimates from efficiency organizations, consultants, and trade surveys, each measuring something slightly different. Here they are side by side.

Two things stand out. First, the ranges are wide because the denominators differ: operating cost, production cost, and COGS are not the same line. Second, none of the sources is a public company's audited cost of sales. Green Thumb Industries and Trulieve both list energy in their 2025 annual reports as a risk, with Green Thumb stating its growing operations require energy supply that makes it vulnerable to rising energy costs, and Trulieve stating its growing operations consume considerable energy [gti-10k-2025] [trulieve-10k-2025]. Neither company breaks utilities out of cost of goods sold, so there is no MSO-level percentage to quote. Anyone who tells you "the industry average is X percent of COGS" is rounding one of the estimates above.

Why the share differs by facility type

The benchmarks above are mostly about indoor cultivation, and that is where energy is a COGS line worth managing. The picture changes completely across the four facility types.

Indoor cultivation. Lighting dominates. The Northwest council's survey found lighting was 66 percent of total load, with flowering rooms alone at 49 percent, and HVAC and other end uses making up the remaining third [nwpcc-cannabis]. Indoor operations produce a gram of flower with 18 times the energy of an outdoor grow [nfd-energy-comparison]. A Colorado State University life-cycle study published in Nature Sustainability found indoor cultivation emits 2,283 to 5,184 kg of CO2 per kilogram of dried flower, against 326.6 kg for greenhouse and 22.7 kg for outdoor, with HVAC as the largest energy demand [csu-nature-sustainability]. That is the environment where 20 to 40 percent of operating cost is plausible. See kWh per square foot benchmarks for the intensity numbers behind it.

Greenhouse. Sunlight replaces most of the lighting load. The Northwest survey measured lighting power density for greenhouse operations at a fraction of indoor-only sites [nwpcc-cannabis], and the Utility Dive piece quotes SWEEP estimating optimized greenhouses can cut energy per gram 60 to 70 percent versus a standard indoor build [utility-dive-2019]. The energy share of COGS drops accordingly, though dehumidification and heating can be larger in cold, humid climates. A Sacramento operator profiled by MJBizDaily in June 2026 runs a 300,000 square foot clear-roof facility on a 400,000 dollar monthly power bill, which he described as efficient for its output of about 70,000 dry pounds a year [mjbiz-energy-2026]; that works out to under 70 dollars of electricity per pound if you take the figures at face value, which is an illustration of how far a greenhouse can sit below the indoor range.

Extraction and processing. Energy here is chillers, vacuum ovens, solvent recovery, and rotary evaporators, and it is spread over a much higher-value output per kWh. Electricity is a real line but rarely a top-three COGS item. Our page on extraction facility energy loads covers the equipment.

Dispensary retail. A dispensary's cost of goods is purchased product. Utilities are an operating expense, and for a typical storefront they are a low single-digit percentage of total cost. The reason a dispensary still cares is rate class and demand, covered in dispensary retail energy costs.

Why the share differs by state

The same facility in two states can have a very different energy share simply because of the price per kWh. The EIA's June 2026 average commercial prices show the spread [eia-epm-5-6-a]:

A grow using 3,000 kWh per pound, in the middle of the range the MJBizDaily column cites [mjbiz-manage-energy], pays about 295 dollars per pound for electricity in Nevada and about 820 dollars in California at these averages. Same plants, same lights, nearly three times the energy line. The MJBizDaily June 2026 piece makes the same point through an operator who chose Sacramento's municipal utility at 12.7 cents per kWh over investor-owned territory where he cited rates near 45 cents [mjbiz-energy-2026]; those are his quoted figures, not EIA averages, but the direction matches.

State price is also moving. The Bureau of Labor Statistics electricity index rose 5.9 percent in the twelve months ending May 2026, as reported by MJBizDaily, and one multi-state operator quoted in the piece reported 8 to 12 percent electricity increases over 16 months alongside a 46 percent rise in natural gas over two years [mjbiz-energy-2026]. If your benchmark came from a 2019 study, your share today is higher for the same kWh.

A worked example: turning benchmarks into your own number

Every input below is assumed so you can follow the arithmetic. Replace them with your bills and your accountant's COGS allocation.

Assume an indoor facility with 8,000 square feet of flowering canopy that harvests 5,000 pounds a year, uses 35 kWh per square foot of canopy per month across lighting and HVAC (about 3,360,000 kWh a year), and pays an all-in electricity price of 14.5 cents per kWh, close to Illinois' June 2026 commercial average [eia-epm-5-6-a]. Assume total cultivation COGS, including labor, nutrients, rent, depreciation, and utilities, is 1,800,000 dollars.

• Annual electricity: 3,360,000 kWh × 0.145 = 487,200 dollars
• Electricity per pound: 487,200 ÷ 5,000 = 97 dollars
• Electricity as share of COGS: 487,200 ÷ 1,800,000 = 27 percent

That sits inside the 20 to 40 percent range NEEP and SWEEP describe [neep-cannabis-codes] [utility-dive-2019]. Now change one input at a time:

The lesson is that the benchmark range is mostly a function of two levers: what you pay per kWh and how many kWh you use per pound. The first is rate class, tariff, and supply contract. The second is lighting, HVAC, and envelope. Our LED vs HPS cost comparison covers the second lever; the rest of this site is mostly about the first.

How to use benchmarks without being misled by them

Match the denominator. If a study says "operating cost," it is likely including selling and administrative expense, which makes the energy share smaller than the same dollars divided by cultivation COGS only. Decide which ratio you are tracking and use the same one every quarter.

Use cost per pound as the second axis. Percent of COGS drops when everything else gets more expensive, which is not an improvement. Energy dollars per pound harvested, and kWh per pound, are the numbers that only move when you actually change something.

Separate price from quantity. A rising share can mean your utility raised rates, your supply contract rolled to a variable rate, or your rooms ran less efficiently. The bill's kWh line and the interval data tell you which. If kWh per pound is flat and dollars per kWh rose, that is a procurement problem, not an operations problem.

Watch the tax angle. Utilities allocable to production are a cost of goods sold item, which matters a great deal for adult-use operators still subject to Section 280E. The reasons are laid out in 280E and energy cost control.

Check the survey's era. The Cannabis Business Times survey reflects 2015 spending [cbt-soi-2016], the Northwest council's data is from 2017 [nwpcc-cannabis], and New Frontier Data's comparison is from 2018 [nfd-energy-comparison]. Wholesale prices have compressed since then and electricity prices have risen, so the energy share of a pound today is almost certainly higher than any of those sources would imply.

The energy cost as a percent of revenue benchmark tool lets you enter your bills and revenue to get a comparable ratio, and the how much does it cost to power a grow FAQ covers the quick questions.