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Growth target: Marijuana growers

July 11, 2016 By    


Over the past decade, states have gradually legalized the production, sale and use of marijuana for medicinal or recreational applications.

With the increasing number of states legalizing marijuana, more grower operations have emerged across the United States.

“There are some new companies popping up to take advantage of the legalization of marijuana in certain locations,” says Cinch Munson, director of agriculture business development for the Propane Education & Research Council (PERC). “With that, there are opportunities for both heating-type systems and cooling-type systems needed for that operation.”

Growth in the marijuana market could provide propane retailers with opportunities to capture new customers, says Dan Kuipers, key account manager at BioTherm Solutions. Kuipers expects marijuana to be a growth market for the next four to five years.

“What’s probably likely to transpire in the coming months is that Maryland will really be the next state to legalize the production of medicinal marijuana,” he says. “There will be about a dozen or so potentially new greenhouse facilities that open for this, and I know some of these applicants would absolutely run on propane.”

Bart Howard, store manager at Southern States Cooperative’s Jarrettsville, Md., location, expects the marijuana market to boom soon in Maryland.

“This market is going to be a gold mine,” Howard says. “This is big talk in Maryland. I know a couple of marijuana growers, and one who has already sent in an application for business.”

Based on recent developments, some of the states expected to become potential growth markets for marijuana growers are Florida, Maine, Maryland, Massachusetts, New York and Pennsylvania. With more states legalizing medicinal marijuana, a number of growers are applying to become approved growers with their state governments.

In many cases, states can only approve a limited number of growers.

Kuipers suggests retailers find out whether any marijuana farms are planned near their operations. Then, check if propane works as a heating option for them – especially if the farm is located far from a natural gas pipeline.

Munson says retailers should treat this market like the traditional greenhouse market, reaching out to marijuana growers through networking and partnerships with manufacturers.

Pat Gregory, a Blossman Gas store manager in Pensacola, Fla., hasn’t heard much about a market in his area yet, but any new legal growth markets are a positive for propane.

“The way I look at it, if this market is willing to burn gas, we’ll go after it,” he says.

Marijuana legalization

According to the National Conference of State Legislatures, 25 U.S. states, as well as Washington, D.C., and Guam, allow for the use of medical marijuana. Four states and Washington have legalized marijuana for recreational use.

In addition, several states have marijuana-related issues on the ballot in November, including Florida, Maine and Nevada. A number of other states might include issues related to the legalization of marijuana use, sale, growth or distribution on the ballot, but these were not confirmed as of June 15.

About the Author:

Megan Smalley was an associate editor at LP Gas magazine.

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