Why cannabis legalization means big business for haulers

Why cannabis legalization means big business for haulers

With many states legalizing cannabis for medical or recreational use, haulers are being called upon to manage a new kind of waste stream.

July 11, 2019

Since Washington and Colorado became the first two states to legalize recreational cannabis use in 2012, the floodgates have opened, paving the way for legalization in the U.S. Currently, the District of Columbia and 10 states—Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington—have voted to legalize cannabis for recreational use. Including medical use, 33 states and the District of Columbia have passed laws legalizing cannabis to some capacity.

With more states expected to follow in 2019 and beyond, cannabis is already becoming a major economic driver throughout the country.

According to a December 2018 article in Fortune“The Legal Marijuana Industry Is Soaring—And 2019 Could Be Its Best Year Yet,” the legal marijuana industry grew to $10.4 billion in the U.S. in 2018 and employed 250,000 people. In North America overall, backed by Canada’s decision to legalize marijuana nationwide, the legal marijuana industry garnered $10 billion in investments in 2018, up from $5 billion in 2015. These numbers are only expected to multiply in the coming years, with projections estimating the industry could garner $16 billion in investments this year as it continues to expand.

Expanding legalization means greater need for disposal

From seed to sale, cannabis production is a multilayered process. Cannabis plants are typically raised in growing facilities, cultivated, sent to labs for testing and then either shipped to dispensaries for final sale or processed to make products such as oils, edibles or other cannabis derivates that are then tested and sold.

With each of these stages, operation-specific wastes are produced.

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Rich Thompson is a managing partner at TEC LLC, a Scottsdale, Arizona-based consultancy group. He formerly served as director of environmental compliance at Phoenix-based Republic Services and as director of environmental protection at Houston-based Waste Management. According to Thompson, while the cannabis waste stream may be unique, its organics can be handled much the same as other special wastes.

Thompson says almost all of the cannabis flower that contains tetrahydrocannabinol (THC)—the principal component of cannabis that gives the plant psychoactive properties—is cultivated and sold before the rest of the plant’s stalk, stem and roots enter the waste stream for disposal.

According to Thompson, this mitigates a lot of the environmental or contamination concerns that waste companies need to have when it comes to disposing of these organic materials.

The District of Columbia and 10 states—Alaska, California, Colorado, Maine, Massachusetts, Michigan, Nevada, Oregon, Vermont and Washington—have voted to legalize cannabis for recreational use. Including medical use, 33 states and the District of Columbia have passed laws legalizing cannabis to some capacity.

Thompson says organic matter stemming from cannabis production can be disposed of in four ways: landfill, composting, incineration or through digestors, with landfill and composting being the most common methods.

“I would say cannabis actually disposes the same as green waste—with one exception. I know people have used green waste for a lot of different applications, including as a cover material in some landfills. Now, since cannabis is a special waste, you wouldn’t use it as cover material in a landfill, but it can be easily put in a landfill nonetheless,” Thompson says. “You’d want to place dirt on it and you’d want it disposed of as soon as possible. But when it comes to compost operations, it composts just like any green waste. It can be chopped up and mixed into the compost to make a pretty good mulch or soil. So, there really is nothing spectacular about how it’s managed [when it comes to landfill or composting].”

Beyond organic waste, cannabis waste can be composed of manufactured products such as edibles and oils and their derivatives, as well as industry-specific packaging that requires disposal.

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Understanding regulations

The discrepancy between federal law, which views cannabis as an illegal substance, and individual state laws can be confusing for producers and waste companies alike. When variations between different state laws are factored in, handling cannabis waste can become even more complex. Thompson says careful consideration is needed from both generators and waste operators to ensure they are adhering to the bylaws governing their operations.

“On the generator side, most of those companies need to have some sort of a record-keeping system,” Thompson says. “What the states are saying is that they want to know the volume of materials a generator has in the facility by weight or by volume, and then they’re going to ask them the question: ‘How much of this got shipped out as product in order to be sold as cannabis, marijuana or whatever product they’re producing, and then how much of it got shipped out of the facility as waste for either disposal or recycling?’”

Before the waste can be collected from a generator, it needs to be stored on-site. Thompson says grow operations typically have regulations that stipulate the site be secure from the public by means of fencing and other security measures. In cases where the perimeter is secure from the public, waste containers and dumpsters don’t necessarily need to contain a lock, Thompson says. However, for other producers and dispensaries where waste containers may be located outside a secure area, it is necessary to keep containers locked to prevent scavenging.

Before cannabis waste is placed in containers, however, producers are called upon to render material destined for landfill “unusable and unrecognizable.” This can be accomplished by grinding the organic material and mixing it with at least 50 percent of another solid waste source, such as plastic, paper or food waste.

“It's important for all waste companies to tell their drivers that they're never allowed to scavenge loads for any purpose. If you're telling the customer their waste is slated to go to a landfill or to a compost facility, that's where it should end up.” –Rich Thompson, managing partner, TEC LLC

Thompson says that in an effort to render this waste unusable and unrecognizable as mandated by law, some operators have been found to misguidedly mix their cannabis byproducts with bleach, ammonia or other toxic substances. However, this is both unnecessary and potentially harmful to the environment.

From a hauler perspective, regulatory compliance in managing these waste sources ultimately resides with the drivers and collection personnel directly handling the refuse materials. Thompson says waste management companies need to be vigilant during hiring and training to instruct all collection staff and drivers about properly handling cannabis byproducts.

“It’s important for all waste companies to tell their drivers that they’re never allowed to scavenge loads for any purpose. If you’re telling the customer their waste is slated to go to a landfill or to a compost facility, that’s where it should end up,” Thompson says

Haulers also need to be mindful of transporting cannabis waste, especially over state lines. Thompson cites a recent example where three truckers were taking hemp, which is similar to cannabis but devoid of the psychoactive ingredients, from Oregon to Colorado. The truckers were stopped at a weigh station in Idaho and subsequently held in jail. The case is still being reviewed, but the men face five years in prison if convicted, as marijuana is illegal in Idaho and the state does not currently distinguish between marijuana and hemp.

“The Department of Transportation still regulates the haulers in terms of cannabis,” Thompson says. “The federal law says that cannabis operations are illegal, but it’s the states that have the rights to determine their own regulations in this case. So, for haulers, it is important that they know that they cannot haul cannabis from a legal state across the lines to a state where it’s illegal.”

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Finding opportunities

Thompson says that cannabis-related businesses can be good customers for waste management companies. The key for haulers is being able to show these potential customers that they can handle their waste generation volumes and schedules just like they would for any other business.

“These customers are going to generate a lot of waste and they’re going to generate waste on a very regular basis,” Thompson says. “For instance, growing plants takes about 105 days from the time they put a seed in the ground to the time they can actually harvest the plant. But the way most of these grow operations work is they have a rotating cycle of plants always working through their facility. They’re trying to be in a position where they’re harvesting something nearly every week. They’re going to have a regular amount of waste that they’re going to generate and they need a very reliable service provider to provide those hauling services to them. That’s where companies need to step up and show these potential customers what they can do in terms of providing the right size bins for their operations and then what they can do to service them on their correct intervals to get that material off the site.”

Looking to the future, Thompson says that cannabis-related opportunities are rich for the waste industry. With more than half the country having some level of legalization in place currently, and more on the way, the cannabis industry is poised for an explosion that is sure to benefit haulers able to handle the demand.

“I think [the growth of the cannabis market] is an opportunity for the waste industry to provide services to a new and growing industry. From what I understand in terms of the number of people being hired, cannabis is one of the fastest growing industries in the U.S. right now,” Thompson says. “So, clearly, they have a need for people to manage their waste. Handling waste is not their business, but it’s a necessary byproduct of their operations. They need experts to come in and tell them what they need to do in terms of managing their waste and controlling the cost at the same time.”

Check out our Executive Q&A to see how Gaiaca Waste Revitalization has found its footing handling California’s cannabis waste.

This article originally ran in the May/June issue of Waste Today. The author is the editor of Waste Today and can be contacted at aredling@gie.net.