Virginia has taken action against the most notorious high-volume users of electricity: data centers.
The state has imposed a new tax on the energy that data centers use. It’s also devised other new regulations on data centers. Virginia has made it clear that data centers can no longer plug into the grid without some consequences.
At the same time, though, Virginia has now enthusiastically authorized another set of high-volume users of electricity who, on a square-foot basis, may use even more energy than data centers — and who don’t have to pay those power consumption taxes.
I refer to cannabis growhouses.
During the most recent General Assembly session, there was a lot of wrangling about various aspects of legalizing cannabis — how many licenses to issue, who should get preference in licensing, what kind of penalties there should be for those who still break the law. If there was attention devoted to the power consumption of cannabis growhouses, it didn’t get much ink (or, should we say these days, electrons).
Most cannabis, though, is grown indoors (for reasons of quality, quantity and security) and indoor agriculture of any kind is power-intensive.
In the marijuana business press (yes, there is such a thing), it’s frequently asserted that cannabis growhouses require more power on a square-foot basis than data centers. This is usually reported in the context that cannabis growers need to find more energy-efficient ways to grow their crop.
To be sure, data centers overall use more power than cannabis growhouses simply because there are a lot more of them. Nationally, cannabis growhouses account for 1% of the nation’s power use, according to Marijuana Business Daily. By contrast, data centers are now said to use 6% of the nation’s power.
If you’re concerned about the power grid, and where all that power is going to come from, you should worry more about data centers than cannabis growhouses. Nonetheless, cannabis growhouses are energy-intensive, so if we really want to worry about rising power demands, we probably shouldn’t ignore them, either.
When Colorado legalized retail cannabis, suddenly Denver found that 4% of its power supply was going to growhouses. Statewide, Colorado says that 2% of its power goes to growing weed. That’s not much compared to Virginia, where more than 25% of our power now goes to data centers. Still, at the same time that Virginia is trying to rein in the growth of power-hungry data centers, it’s given the green light to power-hungry growhouses.
This highlights the selective nature of Virginia’s concern about data centers. They are definitely power-hungry, but not necessarily uniquely power-hungry. Steve Haner, writing in the Jefferson Journal newsletter (from the conservative Jefferson Forum), recently wrote: “Charging a utility customer a tax based on what an electron is used for is a new and dangerous idea. The additional consumption tax will not be charged to a large factory with a similar energy load or apparently even the data centers running our telecommunication networks. Why should Amazon Web Services pay more for electricity than Verizon or Newport News Shipbuilding?”
A good question, indeed. The logical conclusion would be that we should tax all large electricity users, which means we’d be taxing Walmart — it takes a lot of power to run that all-night superstore — which means those costs will get passed on to customers. Or grocery stores. Or hospitals. Or, well, cannabis growhouses?
Here’s the question I set out to answer: We can measure a cannabis crop in many ways. By how many joints we can roll out of it. By how many edibles it might produce. We can certainly measure it by the dollar value in the marketplace. However, can we measure that cannabis crop in data center equivalents? In other words, creating a legal retail cannabis market in Virginia is the equivalent of adding how many data centers to the grid?
In the old days in math class, we’d call this a story problem.
Follow along as I do the math.
Never having grown cannabis myself, I’m going to trust the folks at Marijuana Business Daily who say that it takes anywhere from 2,000 to 5,000 kilowatt-hours to grow a single pound of weed.
So, how many pounds of weed will Virginia grow? We don’t know until we do it but we can look at the experience of other states that have gone down this road.
Virginia is slightly bigger, population-wise, than Washington state, which legalized retail sales in 2014, the same year Colorado did. Washington therefore has a more mature market than Virginia will and, perhaps, more pot-smokers, period. Still, let’s start the math with a state that’s population-equivalent. The most recent figures show that Washington produces 2.6 million pounds of the devil’s lettuce in a year’s time.
At 2,000 kilowatt-hours per pound, that’s 5.2 billion kilowatt-hours (or 5.2 million megawatt-hours) to produce Washington’s crop. Based on figures from Life Science Analysis & Reporting Solution, which promises “Independent health risk assessment and environmental permit intelligence,” that’s equivalent to 60 small data centers or six large “hyperscale” data centers. At 5,000 kilowatt-hours per pound, that’s 13 billion kilowatt-hours (or 13 million megawatt-hours). That’s equivalent to 15 hyperscale data centers or 148 smaller data centers. In reality, Washington state has a climate that allows about 30% of its cannabis crop to be grown outdoors. The expectation in Virginia is that all of ours will be grown indoors — well, all of our legal crop anyway. Can’t speak for those who still practice the old “Copperhead Road” method.
If Virginia’s pot smokers (and edible-chewers) crave their THC fix at the same rate as those in Washington state, then Virginia will need to have enough growhouses that would equal anywhere from six to 148 data centers, depending on the size of such facilities.
Now, here’s the good news (unless you intend to be one of those cannabis growers or retailers): Virginia’s not likely to be as pot-happy as Washington state, because few places are.
We just don’t have those kinds of West Coast sensibilities, shall we say.
Michigan has more people than Virginia, but a newer cannabis market, so let’s try a comparison there. Michigan Live reports that Michigan sold 1.36 million pounds of jazz cabbage last year, the seventh year of legal retail sales.
Same math, different state: At 2,000 kilowatt-hours per pound, that’s 2.72 billion kilowatt-hours or 2.72 million megawatt-hours. That works out to three hyperscale data centers or 31 smaller data centers. At 5,000 kilowatt-hours per pound, that’s 6.8 billion kilowatt-hours, 6.8 million megawatt-hours. That’s equal to eight hyperscale data centers or 78 smaller data centers.
Ohio did not begin retail sales until 2024, so 2025 was its first full year of legal sales. That might make for a better comparison to Virginia in the startup phase. The Buckeye State saw 171,491 pounds of weed sold. At 2,000 kilowatt-hours per pound, that’s 342.9 million kilowatt-hours or 342,982 megawatt-hours. That’s about half of one hyperscale data center or four smaller data centers. At 5,000 kilowatt-hours per pound, that’s 857.4 million kilowatt-hours or 857,455 megawatt-hours. In terms of data centers, that’s equivalent to one hyperscale data center or 10 smaller data centers.
The question is not whether we should be taxing data centers; the legislature has decided that. Rather, the question seems to be why we aren’t taxing these future cannabis growhouses for the power they will use?
For more political news and analysis, see our weekly political newsletter, West of the Capital, that comes out on Friday afternoon.
