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Earthly Labs: helping cannabis entrepreneurs save both cash and carbon

Profiles of cannabis businesses that defy stereotypes

3 min read

Legalizing cannabis is helping to lower the carbon footprint of craft beer.

Kaitlin Urso believes such an outcome - the result of a CO2 exchange pilot between a Denver-area brewery and a nearby cannabis cultivator - was only possible because Colorado legalized recreational cannabis in 2014. Ms. Urso, an environmental protection specialist with the state government’s small business assistance program, was assigned to help the beer sector then the cannabis sector in quick succession, giving her unique insight into both.

“There is a big boom in both breweries and in cannabis in this state and they are also both very resource-intensive,” Ms. Urso said. “They both use a lot of energy, a lot of water and they both generate a lot of waste.”

In 2018, after giving a speech on sustainability at the Craft Brewers Association’s annual conference in Denver, she put a call out to the audience.

“One of the larger challenges was CO2, because breweries generate quite a bit but on a small craft brewery level, it just hasn’t been cost-effective to recapture and reuse that CO2,” she said, “I just put that call out there and asked if anyone in the audience knew of a cost-effective way to make that happen.”

Bob Lagner raised his hand and quickly escorted Ms. Urso to meet his boss, Amy George, founder and CEO of Austin, Texas-based Earthly Labs.

For Ms. George, who previously founded sustainable food container maker Blue Avocado and the Austin Farmers Market before that, meeting Ms. Urso marked a major inflection point for her business. Up until that point, Earthly Labs was entirely focused on helping small breweries capture and reuse their own CO2, but that meant breweries would still end up venting off any CO2 they produced beyond what they needed for their own purposes.

“Depending on the brewery and different circumstances, it was anywhere from 50 to 80 percent of all C02 that was not being captured,” Ms. Urso said. “I saw that as a huge opportunity and working with both the craft beer and the cannabis sectors here in Colorado, it seemed like a very specific opportunity in that cannabis cultivators actually inject C02 into their growing environment to stimulate photosynthesis.”

Ms. George was easily convinced.

“It was always our vision to help brewers who had excess CO2 sell it, but we didn’t have a target market in mind for buyers,” she said in an interview. “[With cannabis] we got a practical use.”

In February, a CO2 exchange pilot program between Denver Beer Co. and cannabis grower The Clinic was launched. Barely 10km apart, the brewer was able to generate an entirely new revenue stream by selling its excess CO2 to The Clinic, which in turn benefitted from the price being roughly one tenth what commercially-produced CO2 usually costs.

“Both the [beer] brewer and the [cannabis] cultivator, without this exchange market, would both be purchasing outside CO2 from an outside supplier,” Ms. Urso explained. “And that is brought in on a large truck that makes multiple stops so [this exchange] takes those truck vehicle miles out of the picture and also creates this small, local economic benefit.”

The goal of the pilot project, Ms. George said, is to “reduce the grower’s cost and also provide some income for the brewer. If we can demonstrate that and prove it out then there is a definite market growth driver there.” 

“In the future it could be a broker-type environment where we can connect brewers and growers,” Ms. George said. “We already have a lot of folks who have raised their hands and we are just working on the matchmaking to get them up and running as soon as we can.”

It is certainly possible beer brewers and cannabis growers would have discovered that mutually beneficial arrangement on their own, Ms. Urso said, but not if cannabis was still illegal.

“Without me having the extensive research and relationships between craft brewing and the marijuana sector, I don’t see how this connection would have happened,” she said, “or it would have taken a very long time for it to happen on its own.”

Extracts

  • This story shows how legalization in Colorado allowed for a Texas company to establish a CO2 exchange program between microbreweries and cultivators
  • It should expand your definition of what can be considered a cannabis business
  • Brewers make money selling CO2 that otherwise would have been vented off as waste, cultivators save money by no longer buying commercially-produced CO2

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