A Cannabis Facility's Guide to Environmental Regulatory Compliance

Written By: Doug Ruhlin | Jul 8, 2022

Time to Read 19 Minutes

How environmental regulations impact a cannabis facility.

When it comes to dealing with environmental regulations, cannabis operations across the United States face a variety of unique laws. With regulations different from state to state, and sometimes even specific to various regions, counties, or other local jurisdictions, staying ahead of rules, laws, and regulations can be extremely tricky.

And no, I’m not discussing cultivation, distribution, or sales of cannabis, I’m referring to environmental regulations that deal with the cannabis facility operations themselves.

Despite being (in some states) a brand new industry, there are a variety of environmental regulatory considerations which impact cannabis facilities in the same way they do with any other well-established, legacy industry.

If you’re wondering how you’re going to juggle complex environmental regulations, you aren’t alone. Many people, especially from organizations with multi-state organizations, really struggle to understand the complexities of environmental regulatory compliance. While compliance can be challenging, it doesn’t have to be hard to deal with. Let's dive in and discuss some details about how environmental compliance impacts a cannabis facility, regardless of your location.

Cannabis and Environmental Compliance

Environmental Compliance 101 for The Cannabis Industry

We’re going to break down 5 primary areas of concern when it comes to environmental compliance, which are:

  • Air Quality Permits
  • Tier II Community Right-to-Know Reporting
  • SPCC Plans & Training
  • NPDES Permits & Training
  • Hazardous Waste Generator Status

Before we dive into these five areas of concern, let’s make this crystal clear right from the start - these are NOT the only things you may need to be aware of at your cannabis facility. Every operation, and where it’s located, warrants an individualized look and approach to compliance. What is required in one town, one county, one region, or one state, for one facility, may not be indicative of what’s required across the road, in the next county over, or across state lines. The point is that this is a guide, and is not an end-all-be-all list. When in doubt, dig through regulations or talk to an expert!

Cannabis Facilities & Environmental Compliance

Air Quality Permits at Cannabis Facilities

In our opinion, one of the biggest areas of headaches for cannabis facilities is air quality permits. The regulatory language is confusing, your processes & equipment make a huge difference on what type(s) of air permits are needed, and regulations vary quite a bit, not only between states but sometimes even within states!

Additionally, cannabis facilities tend to be newer operations, and chances are pretty good the state and/or local environmental inspectors visiting your facility may have never been to a location like yours before. This generally means longer, slower inspections looking at every little detail, an overall sense of confusion from regulators, and lots of back and forth communication (giving you ample room to say the wrong thing to the wrong person mistakenly) asking for clarification and details about your operation. Just like in any other industry, when you get a new person on the job, things don’t always go smoothly.

The quick version of air permits is this - they are required for any facility that has to release a modest, controlled, generally harmless amount of air emissions into the atmosphere, usually under very tightly controlled conditions. It doesn’t matter if you think your facility is “all-natural”, or “just plants or farming”, if you have certain types of equipment or processes, in most states (and under Federal law), your cannabis operation probably is going to need some form of an air permit.

From our experience, cannabis facilities and the need for air permits usually are usually driven by:

  • Diesel and/or natural gas generators (continual power or emergency/backup/stand-by, often needing two air permits both for the installation/construction of equipment, and another permit for the operation of the equipment)
  • Shredder/Mulcher/Grinder Equipment (for pulverizing stems and unwanted plant matter for further disposal)
  • Processing, including chemical processes (the concept of fugitive emissions from any extraction, distillation, or other processing equipment)
  • Materials handling equipment, such as conveyors, baggers, bins, etc.
  • Odors vented outdoors by fans or HVAC units (because NIMBYism is happy to support your industry, but doesn’t want to smell it)

Of all those, a cannabis facility’s biggest compliance concern is generally going to be tied to generators, since they tend to be the biggest “pollution” source at a cannabis facility. Just like an engine in your car, the engines in generators create exhaust which gets emitted into the atmosphere. Again, think of air permits at a cannabis facility as a permit to “pollute” almost. Everything else is worth a look, and again, these are the most common areas of air permitting concern, but not a complete and final list to go off of.

Tier II Community Right-to-Know Reporting for the Cannabis Industry

Another extremely important environmental regulation a cannabis facility should be on top of is the need for Community Right-to-Know Reporting, also called Tier II Reporting, EPCRA Reporting, CRTK Reporting, etc. No matter what you call it, this annual reporting requirement is for any facility that stores certain hazardous materials above certain threshold amounts. At a cannabis facility, that generally means fertilizers (liquid or solid), but again, could mean other things depending on the specifics of your operation. For example, if you have generators on-site with diesel in them, you may have enough diesel to meet the threshold also.

CRTK Reporting is sort of like taxes - every year you’ll tell a government agency (in this case, usually local emergency response agencies at the local and/or state level) that you have a certain amount of hazardous materials on-site. It’s based on your current usage, not the same data you reported last year (again, think of taxes, you can’t tell the IRS the same thing year after year).

The reason for Tier II Community Right-to-Know Reporting is simple - it helps keep first responders safe in-case of an emergency, and to a lesser extent, helps the public know where and what types of hazardous materials are stored at your facility. Again, worst-case scenario, this data could (and routinely does) help to keep people safe and alive in emergency situations.

SPCC Plans for Generators at Cannabis Facilities

If you operate generators on-site and they’re fed via fuel oils, then you may need an SPCC Plan at your cannabis facility. The 10-second version is it’s an oil spill plan contingency plan outlining procedures and plans on how to handle oils, prevent spills, and what to do in-case of an emergency. The cutoff is if you have over 1,320-gallons of petroleum and/or other oils on-site, in containers 55-gallons and larger, then you’ll need a plan. Depending on the specifics of your operation, the size of the tanks, spill history, etc., you may need to jump through a few more hoops, but regardless, once you hit the 1,320-gallon mark, you will very, very likely need an SPCC Plan.

In the same vein as CRTK Reporting, SPCC Plans are meant to help keep your cannabis facility running safe and sound, to prevent conditions or activities which could cause a spill or discharge of petroleum, and in a worst case scenario situation, how you can respond, who to call, and what steps to take.

It’s extremely common for people to refer to these documents as “oil spill plans” but the reality is they are more for the prevention of spills. In fact, SPCC stands for Spill Prevention, Control, and Countermeasures, so as you can see, cannabis facility or not, the main goal is to outright prevent an oil spill from ever occurring.

NPDES Permits

Here’s a regulation that varies so much from state to state that for some cannabis facilities, some type of NPDES permit may be a high probability, while in other states you can get out of the need for a permit altogether through something called non-exposure or non-applicability determinations, or due to that state considering cannabis production as farming.

The NPDES regulations cover a lot of ground and include a lot of different types of discharges of dirty (polluted) waters and liquids to surface or groundwater, including those associated with stormwater runoff as well as those associated with processing itself. One easy way to think of it is like this: if you wouldn’t drink the water, it probably needs a permit to be discharged to the environment (and in some cases, even drinking water quality discharges may need permits!).

However, from our experience with cannabis facilities, the most common concern for NPDES permits involves stormwater (runoff) permits. NPDES stormwater permits are permits issued usually by your State (but on occasion, by the Federal government depending on your location) that again “allows” you to discharge potentially dirty stormwater through tightly controlled conditions and usually with a lot of requirements.
Since many types of cannabis facilities are large-scale, warehouse-like buildings with next to nothing outside, what could you possibly be polluting? There are no large stockpiles of materials, or dirty, unpaved yards full of rusting old equipment. So why would a cannabis facility need a NPDES stormwater permit?

In many instances, they either don’t, or can get what’s called a non-exposure or non-applicability determination, which simply says “we’re inside, don’t have anything that could cause pollution outside, so these stormwater permit rules don’t apply to our cannabis facility”. Sounds too good to be true, right? It sort of is. And, in many areas cannabis production may be considered as agricultural in nature and exempt from NPDES stormwater regulations. Like always, it depends on the location!

In order to obtain a non-exposure, or non-applicability certification, you’ll need to prove you can’t pollute. And, despite getting around the need for a permit, you’ll still have to act like you have a permit, and meet certain requirements. Conversely, in some states, despite being almost entirely indoors with nothing to note outside, you may still find the need for NPDES permit coverage. Like air permits, NPDES permit applicability is all going to depend on your operation, and where you’re located.

Hazardous Waste Generator

Okay, I know what you're saying right now. We don’t have hazardous materials or substances, and we don’t generate hazardous waste! Turns out, you’re probably wrong on both counts, at least as far as the varied and complex world of environmental regulations are concerned!

All facilities, regardless of type, generate some type of waste. Usually, this is standard normal “solid waste”, which can be put into a dumpster and carted off to an approved landfill or similar end-of-life facility.

However, if your facility produces anything that “isn’t quite normal”, it requires evaluation as a hazardous waste. While some examples might include things like chemical residues, materials processed with chemicals, oily materials, cleaning materials, oily or chemical-soaked cleaning cloths or rags, spent solvents, etc., the list is almost endless and will therefore be specific to your cannabis operation, how you do what you do, and what waste materials you generate. When it comes to hazardous wastes, some facilities might generate next to none, while others might generate a substantial amount.

Hazardous waste management and disposal is one of the most complex and highly regulated environmental subjects there is, and beyond the scope of this post to go into in real detail. However, suffice to say, if you generate (produce) hazardous waste, you have obligations to understand and comply with these regulations. That may include things like registering as a hazardous waste generator, storage requirements including storage location and storage time limits, labeling and packaging requirements of waste, recordkeeping, training, and a whole lot more. And, the regulations apply to everyone, regardless of the amount of hazardous waste you generate!

One last point about hazardous waste (and solid waste also). Everyone should take a long, hard look at the waste they generate, and see how they can reduce the overall amount of waste. Reduce the amount (and type), and you likely can reduce your regulatory burden and responsibilities. By conducting a waste audit, or having experts handle this for you, you might find ways to reduce, reuse and recycle your waste, which is a great thing to do!

Cannabis Facilities & Environmental Regulatory Compliance

Environmental Justice & the Cannabis Industry

One of, if not THE newest environmental concern out there that businesses, including those in the cannabis space, are facing is the concept of environmental justice. It’s so new in fact that many states are still keeping an eye on what the Federal government is doing, while other states (such as New Jersey and California) are marching ahead full steam with a whole new realm of regulations and requirements.

If you’re unfamiliar with the term, it’s this - communities meeting certain demographic and socioeconomic criteria have historically been ignored when it comes to businesses opening up shop and getting plans, permits, and approvals to run a business. Since these communities have not had adequate representation when it comes to the planning and development of industrial operations that could detrimentally impact neighboring communities, government agencies are now including these communities as part of the approval, planning, and permitting process.

In other words, if you want to open up a cannabis facility, need to install generators, and need to get air quality permits, depending on the specifics of the local community, they may have a very loud voice at the table. Maybe those generators will emit too much pollution or will run so often it will cause quality of life concerns. Or maybe, you’re running a cannabis facility that’s out of compliance with air permit regulations and gets in trouble time and time again, when you go to renew a permit, the local community can step up and say NO.

Environmental justice is here to stay and will forevermore be a part of the planning, permit, and approval process when it comes to dealing with environmental regulations. We have already directly been involved in instances where facilities have been denied permits because of community involvement, even instances where permit renewals are getting denied due to strong community pushback. Point is, every project, from planning to construction to operation, needs to take environmental justice into consideration upfront unless they want to make a potentially costly mistake.

Environmental Due Diligence for Cannabis Businesses

Slightly outside the realm of “compliance” considerations are the various factors making up environmental due diligence which are typically performed either on a piece of property, a business, or both, as part of the acquisition process. I’ll keep these quick since they aren’t compliance-related, and generally fall into the category of pre-purchase considerations of a facility or business, instead of the above compliance items which tend to be more operationally focused. These are primarily:

  • Environmental Planning for New Cannabis Operations - This would apply to a brand new location, and should ideally occur before you buy the site (otherwise, you may get stuck with a property you can’t operate on!). It is a highly valuable exercise for your planned cannabis facility - before you buy that property - to have an expert go through the list of environmental regulations and requirements that will apply to the location to identify any pitfalls or roadblocks before you’re on the hook. For example, you could buy a great property, only to learn down the road that you can’t get an air permit for your generators, or Environmental Justice regulations won’t allow you to run your operation at that location. Better to find out up front, before you take the leap!
  • Environmental Audits of Operating Cannabis Facilities - Let’s say you want to buy out a local cannabis competitor for whatever reason. In order to establish if they’ve been following the rules, if they have their permits, or if they’re facing any type of enforcement action, you would get what’s called an environmental audit. This essentially digs into who the company is, reviews what permits/plans/approvals they already have, and uncovers their compliance history, or lack thereof! This is helpful since it lets you know upfront how much catch-up you’ll need to do, or how much trouble they’ve already gotten in (which can make your life moving forward difficult). For example, if this facility and company have a sorted history of non-compliance, enforcement issues, etc., then any future activities on-site, such as the expansion of generators, new air permits, etc., could be more difficult thanks to years of skirting the rules. It’s nice to know ahead of time whether you’re buying a headache, right?
  • Phase I Environmental Site Assessments for Potential Cannabis Facilities - Before buying a piece of property, especially one that’s previously been developed, getting a Phase I ESA of a piece of property is the only way to protect your business from the extremely high cost of environmental remediation and clean ups. Why? Because many large, industrial buildings, such as warehouses that now house cannabis facilities, tend to have varied pasts with a variety of industrial usage. If you purchase a piece of property that’s been the cause of contamination for decades, and you didn’t get a Phase I ESA, you will very, very, very likely be the one footing the bill if and when that contamination catches the attention of the general public and/or your state government. You get a Phase I ESA to establish the property’s history, and establish that the past use of the property is why it’s contaminated, all helping to outright eliminate the very real threat of being a responsible party to costly contamination and cleanup costs. Spend a few thousand up-front, prior to purchasing a property, so you can potentially save millions of dollars down the road.

Common Environmental Regulatory Issues the Cannabis Industry Faces

Ok, so we’ve ironed out a few key compliance areas, and have thrown in a few freebies to pay attention to, so how does this all come together?

Construction Without Environmental Considerations at Cannabis Facilities

This is something we see across all industries - construction happens without taking environmental regulatory considerations into play. And recently, without environmental justice being taken into consideration either! This can usually be fixed down the road, but also usually costs more time and money to fix the issues, instead of doing things correctly right out of the gate. And, in a worst-case scenario, this might mean having to suspend or cease operations altogether, not to mention the potential of fines and a ton of bad publicity.

I’ll make a quick analogy - I recently hired a company to put a fence up in my backyard. I had narrowed it down to three companies and ended up going with the one that helped educate me up front and prevented me from running into an issue down the road.

All three companies put together a nice proposal for the fence and gates, costing around the same price, but one company stated in their agreement that it was the homeowner’s responsibility to obtain all permits ahead of time. The other two said nothing about permits, and when asked, either skirted the subject or said we don’t need a permit to replace a fence (which as it turns out, you do!).

I'm glad I looked into the permit process too because my original fence idea wasn't doable according to the township, so I had to revise my original plan, discuss it with the fence company, and ended up getting something installed that was up to code. Sure, there's a chance no one from the town would have ever driven past my house and noticed a non-permitted fence, but I didn't want to pay fines or spend money redoing my fence at some point down the road if that happened.

The same goes in the construction world and is especially true when we come across the installation of generators. Yes, some installers will get you the proper pre-construction air permit, and some may even flip it to an operating permit once it’s ready to turn on.

However, from our experience, the bulk of installers are there to do a job and move on. Just like how I had to get my own permit from the township, you may need to get the proper pre-construction or operating permits when it comes to air permits. After all, it's your facility, and your equipment, meaning if anyone’s going to get in trouble, it’s going to be… you!

Simply put, we’ve seen a lot of facilities of all types get equipment installed or start operations without either themselves or their chosen contractors obtaining the correct permits right out of the gate. Again, not the end of the world and is usually fixable down the road after paying a fine and getting permitted correctly. Just like me with a fence, this will generally cost more time and money to fix things later than it will to set them up correctly from the start.

However, the biggest issue we are seeing happen, and this is NOT unique to the cannabis industry, but to anyone getting equipment installed and hoping to iron things out later, is environmental justice outright denying the use of the equipment.

Here's an example - you need a couple of generators to help keep the lights on inside, so you’ve contracted someone to get them constructed and installed, but after an environmental justice review and feedback from the local community, those five generators are going to be too loud and cause too much air pollution. Maybe after an environmental justice review, your cannabis facility can install only one or two generators, when you need a few more. Or maybe you won't be permitted to operate any! You’ve paid for them, your contractor was paid, and now you can’t use them. Additionally, this applies when you add new equipment. Sometimes one more generator can push you into a different type of air permit or can trigger the need for an even deeper environmental justice review.

Point being, make sure your contractors are getting the proper permits, and are either experts in the regulations, or they’re hiring experts. Otherwise, you run the very real risk of never being able to turn your equipment on!

Cannabis Facility Environmental Compliance

Cannabis Facility Compliance from an Environmental Regulatory Enforcement Perspective

As we mentioned earlier, many operations are reporting that their inspectors have never been to a cannabis facility before. This is causing confusion among regulators - how does this air permit regulation from the 1980s apply to this brand new operation with novel and unique equipment? Savvier regulators can see past this new industry and figure out how decades-old regulations apply to your facility, while others are still struggling to come to terms with the legalization efforts.

Regardless, it’s not uncommon for cannabis facilities to be visited by regulators who are completely new to this industry, aren’t familiar with the process at all (particularly relatively complicated chemical extraction and distillation processes), and end up making your life more difficult.

As with anything else, your best bet is to get things ironed out and set up correctly, ahead of time. Make sure you have the right permits, plans, and approvals. Have discussions with your contractors, ask for clarification, or if you need help today, pick up the phone and give us a call. You don’t want to find out you’ve spent thousands of dollars building a facility, only to learn you can’t use a portion of it!

Cannabis Compliance Ignores Environmental Regulations

Let’s face facts - compliance is mostly focused on the cultivation, processing, distribution, or sales sides of things when it comes to the cannabis industry. After all, these are brand new industries, companies, regulations, operations, etc., and making sure that you’re adhering to all the rules and regulations is easier said than done. While some are wearing multiple hats and incorporating EHS considerations into their compliance, we still largely see compliance officers and departments at cannabis facilities overlooking environmental regulations.

For some operations, facility or property management is in charge of other “compliance” activities, which makes sense to a degree, but starts to become a worse idea once you look at multi-state operations. Unless the facility or operations manager is in charge of a region, or multiple facilities, leaving these very real compliance items to the local staff member isn’t always the best idea. For example, does your plant manager oversee financial compliance? Probably not!

Environmental compliance is just as important as any other area of compliance when it comes to a cannabis operation.

How much does environmental compliance cost a cannabis facility?

It depends! For certain operations in certain parts of the country, this will be a cheaper endeavor, while other cannabis facilities will spend much more. Where you’re located, the specifics of your operation and processes, and the equipment you use can all make a huge impact on the overall cost of environmental compliance at your cannabis facility.

As a general rule of thumb, you can expect to spend several thousand your first year to get a cannabis facility into compliance, figure anywhere from $3,000 to $10,000+, with annual costs thereafter again running from several hundred dollars to several thousand or more. Bear in mind, most environmental regulations are going to have application fees, annual fees, renewal fees, might require monitoring, training, or even minor facility modifications to meet the terms of the permit, plan, or approval. Even if you are an expert in this stuff and want to do it all yourself, it’s still going to cost a decent amount upfront.

If you need to hire an expert (and depending on how much you can or want to help in the process), you can again expect to pay several thousand dollars upfront to retain an environmental consultant. But again, it all depends! To get an idea of the various prices we charge when it comes to compliance, check out our environmental consulting pricing information.

Remember, there would be other costs you'd have to pay to the state beyond working with us, just like you pay for an accountant, and then have to pay your taxes to the IRS.

How long does environmental compliance take at a cannabis facility?

Again, it depends! In certain areas of the country, environmental compliance is a quick task. Applications are reviewed in a timely manner and permits are issued in days or weeks. In other areas of the country, applications can be reviewed for months, public hearings can push back timeframes, and agencies can move forward at a snail's pace.

Whether we're talking licensing, permitting, approvals, etc., just like any other area of any other business, dealing with government agencies can vary in terms of time and complexity, again all based on where you’re located and the specifics of the operation.

Having said all that, to get a cannabis facility into compliance with environmental regulations, you can generally expect a few months to a year to get applications completed, submitted, reviewed, documents made, plans made, etc. Shorter than that and something’s probably being overlooked, longer than that and you’re either dealing with a difficult government agency or you and/or your environmental consultant are doing things wrong, holding up progress.

How can RMA help me at my cannabis facility?

In short, we can help make things easy. From “doing” all this environmental stuff for you, such as applications, developing plans, etc., to long-term compliance, including being an “outsourced environmental department”, we can help you in whatever manner works best for your cannabis facility. Whether that’s the second set of eyes or long-term assistance, we are here to help cannabis facilities get, and stay in compliance with environmental regulations.

Getting all this compliance “stuff” handled isn’t always the easiest thing, but it doesn’t have to be hard. We like to make the analogy that hiring us is like hiring an accountant. Some people and companies need an occasional hand with keeping things organized, while others need a dedicated, full-time hand with keeping their financial compliance up to date. When it comes to environmental compliance at a cannabis facility, it's the exact same concept.

For some, they don’t have the time, energy, or expertise to get this done, and that’s where we can help. For others, this might be easy to handle. It all depends. Regardless, we’re here to help.

To learn how we can help get your cannabis facility into compliance with environmental regulations and stay out of trouble, either fill out the form below to reach out to us directly, click here to contact us, call us anytime at 888-RMA-0230, or shoot us an email at info@rmagreen.com to talk.

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