The growth of the cannabis market is the biggest expansion in the carbon dioxide (CO2) business in recent years and still the biggest area of opportunity going forward.
That’s the view of Josh Pringle, Vice-President of Business Development and Operations for CO2 Meter, Inc.
Pringle was speaking exclusively on gasworld TV, during last week’s Lands of Opportunity webinar – sponsored by DOD Technologies – focused on the current and future gases market in the US.
The webinar explored the US industrial gases industry as both the original and self-styled land of opportunity and a market reloaded today with various market drivers and opportunities.
Among those opportunities is the growing CO2 business, and Pringle stated that he believes the market for CO2 and other gases in the US is ‘still enormous’. He added that although consolidation exists at the major player level, massive opportunities exist at the independent distributor level across all gases and equipment.
CO2 Meter designs and manufactures gas detection, monitoring, and analytical devices and Pringle, himself recognised internationally as an expert in CO2 monitoring and carbon dioxide gas, explained how 10 years ago CO2 Meter made around 50 or 60 different devices, but today that number has rocketed to more than 350 – such is the technological advancement and the opportunities across the industry.
“That’s because we continue to have customers approach us and want us to make devices for new applications,” he said.
One of those new applications in recent years has been the cannabis trade, where the loosening of recreational cannabis regulations has been a major driver of growth in carbon dioxide utilisation in various countries.
The recreational market in Canada is now large and established, but the US is the world’s largest market, with many states allowing the use of medical cannabis for some therapies. If some states were to legalise recreational use, this would further expand the US market potential.
Pringle is in no doubt that this represents one of the biggest opportunities for the US CO2 industry in the years ahead. “I think the biggest expansion that people have seen in the last few years, is definitely the growth in the indoor agriculture and cannabis market. It is without a doubt moving from the East coast to West coast, and a lot of that driver politically is based on the economics,” he affirmed during the webinar’s Q&A session.
“As an example, I think in 2019 the State of Colorado took around $535m additional tax dollars based on the cannabis market, and I think other states are looking at that now and saying, with the budgets as tight as they are coming out of the pandemic, we’re going to look at those new revenue sources as an opportunity.”
By far the largest consumer of CO2 related to cannabis is its application to increase the concentration of CO2 in commercial greenhouses where the crop is grown.
Elevated levels of CO2 enhance photosynthesis and accelerate plant growth. In greenhouses, the growth rate of plants can be improved proportional to the increase in CO2 concentrations, up to approximately 800 ppm (parts-per-million). This is about twice as much as the natural concentration of CO2 in natural ambient air.
Higher CO2 concentrations also increase growth rates, but each incremental increase in CO2 levels above around 800 ppm has diminishing returns. Despite this, many growers dose CO2 to maintain a concentration of between 1,000 and 1,200 ppm to fully exploit the potential of CO2 addition.
“Because of the essentially ‘clean’ use of CO2 in that market, that is a huge opportunity,” Pringle said.
“It’s not just a huge opportunity for the majors, it’s a huge opportunity too for the independents – and it’s a huge opportunity for those independents because they can come in and do all of that nuts and bolts work too. Not just drop in a tank and run; it’s an opportunity to go in and pipe it, and install the dispersion heads, and talk about monitoring and talk about safety monitoring, and really get in and show the customer the value of what someone locally can bring.”
“That continues to be the largest driver in the CO2 market, and I think it’s going to continue to be because we continue to see the East coast states expand and legalise (cannabis) in some portion.”
Lands of Opportunity, Part 2: Asia-Pacific
If you enjoyed this week’s webinar focusing on the US Land of Opportunity, don’t forget to register for Part 2 this Friday, exploring the new lands of opportunity emerging in the Asia-Pacific region, only at gasworld.tv.