Push and Pull Between Marijuana, Energy Industries

Marijuana drains power grid, while power drains cash from marijuana industry

Marijuana production currently makes up 50 percent of new electricity load growth in Colorado, which has brought a host of legal challenges at the intersection of the two industries. One expert says although the challenges seem to bring more questions than answers, those questions are still worth discussing.

“I guess this is the problem with marijuana law,” said Crystal McDonough, an attorney and owner of McDonough Law who practices in energy and natural resources. “Sometimes you have more questions than you do answers.”

McDonough spoke on a panel at the Energy Bar Association’s annual conference this past spring to discuss the intersection of the marijuana and electric utilities industries in Colorado. She said some of the biggest legal questions for utilities providers include those concerning liability for facilitating illegal marijuana operations, rate-setting and issues that come with handling large amounts of cash.

STOLEN POWER
McDonough said although she doesn’t know the full extent of the problem, she has discovered through her research that utility companies in Colorado have experienced marijuana operations using sophisticated techniques to steal power from the grid. The operations doing so, she said, are likely businesses operating illegally, which certainly still exist even in Colorado. She explained utility companies have different rates for different types of customers, such as residential, commercial or industrial users. Marijuana-growing operations are likely considered by providers to be most adjacent to industrial or business consumers and consume large amounts of electricity.

To read this story and other complete articles featured in the August 21, 2017 print edition of Law Week Colorado, copies are available for purchase online.