CSG Law Alert: Think Green III: Considering Clean Air Regulations for the Cannabis Industry
New York and New Jersey are just beginning to grapple with the regulatory controls that will be placed on the states’ budding cannabis industries. Questions arise as to how each state will regulate the industry from an environmental perspective. Over the last few weeks, I have presented blog posts discussing generally the kinds of issues that may come up. Continuing with that series on the cannabis environment, this blog post will briefly consider potential clean air regulations that may be relevant in the cannabis context.
It may come as a surprise to many industry entrants, but air permits are not just required for businesses with towering smokestacks. Under the New Jersey Air Pollution Control Act (“NJAPCA”) and the New York Environmental Conservation Law (“NYECL”), many smaller enterprises require air permits. For example, air permits are required to businesses employing certain kinds of engines for producing electricity (with the exception of certain emergency generators). In addition, boilers, furnaces, and certain kinds of venting equipment can all require air permits. As such, cannabis producers should anticipate the need to apply for and obtain these permits in order to comply with the federal Clean Air Act, State law, and local ordinances, particularly given the need to control odors in outdoor ambient air and to ensure that volatile organic compounds and the solvents used in processing are not emitted in excess of allowable levels.
This may not come as much of a surprise, but cannabis cultivation and processing creates odors. Cannabis plants emit strong-smelling volatile organic compounds (“VOCs”), including terpenes and a compound known as 321MBT, which are often at their strongest while the cannabis plant flowers and while the plant is being processed. Terpenes have been thought to be responsible for the “skunky” aroma commonly associated with marijuana, though recent research suggests that the culprit is actually 321MBT. While the release of those particular VOCs may not necessarily “contaminate” the air in the colloquial sense, it is important to understand that under the NJAPCA and NYECL, odors are a form of pollution subject to regulatory controls. In similar spirit, many of the states to have promulgated environmentally focused regulations on the cannabis industry require installation of odor mitigation systems. Indeed, some states require that plans for these systems be approved in advance by the appropriate State authority. Likewise, we are already seeing a trend among New Jersey municipalities requiring that cannabis establishments install odor mitigation equipment. For example, the City of Bayonne requires installation of “a ventilation system with carbon filters.” That requirement is typical in the states and municipalities to have addressed the issue. Fortunately for entrepreneurs thinking about entering the business, the technology is readily available and is already a well-established form of VOC filtration. In fact, carbon filtration is thought to be the best (and seems to be the most popular) form of VOC emission control for the cannabis industry. That said, there are emerging emission control techniques, which include installation of mineral filters, bio filters (such as wood chips), carbon scrubbing, and negative air pressure systems, as well as use of ultraviolet germicidal irradiation to attend to indoor air quality at cannabis producing facilities. A cannabis business will want to carefully consider the available options in light of state and local requirements in order to select the odor control mechanisms that will best protect the business and local air quality.
VOCs & Solvents
Cannabis producers should carefully consider not only the right odor control mechanism for their business and location, but also how to best manage their cannabinoid extraction practices. As noted above, VOC emissions tend to be at their highest during, among other times, the processing phase. And although odors are not necessarily contaminants for purposes of New York and New Jersey’s environmental laws, the VOCs that cause them may be, and the solvents used in the extraction process may be as well (such as, for example, hydrocarbon-based solvents). Producers will want to carefully evaluate their extraction practices to ensure that fugitive or accidental emissions of VOCs and solvents are minimized or avoided entirely. Cannabis producers will want to keep an especially close eye on how they handle, store, and dispose of solvents. Solvent-based contamination is a common problem in New York and New Jersey. And make no mistake – solvents are already strictly regulated in the environmental realm due, in part, to the sheer volume of solvent-related contaminated sites in each of those states. As such, industry groups recommend that cannabis producers carefully consider how to implement cannabinoid extraction practices in a manner that appropriately manages solvents, such as, for example, by employing closed-loop cannabinoid extraction techniques like condensers or cold traps. Some industry groups advise that a better alternative is to avoid hazardous solvents like butane and propane in favor of more eco-friendly options, like the use of supercritical carbon dioxide. No matter what practices a producer chooses to adopt for their cannabinoid extraction, it is very important that those practices be carefully managed to avoid problems down the road.
Compliance with federal, state and local clean air and odor control regulations present potential challenges for cannabis cultivators, and the potential consequences of noncompliance can suck the air out of a room for a cannabis cultivator or processor. Market entrants will want to carefully consider how these regulations will apply to their business and how best to adapt their cultivation and production practices in order to ensure that their business will not go up in smoke.