Most American consumers are familiar with carbon dioxide, the ubiquitous gas that tickles the nose as a glass of freshly poured cola is enjoyed on a hot summer day. Beyond fizzy beverages, carbon dioxide (CO\u2082) is also used for a variety of applications across a gamut of industries. But a national industrial carbon dioxide shortage is threatening business operations and public services across the United States. NPR recently reported that the CO\u2082 shortage is causing prices to skyrocket, with some brewers reporting the rising costs of the colorless, odorless gas could cause beer prices to spike in turn. And late last month, officials in San Diego, California announced that four city pools would close because of the shortage of carbon dioxide, which is used to balance and maintain pH levels in pool water.<\/p>\n
The shortfall in carbon dioxide is the result of market factors that have combined into what one industrial gas insider characterized as a \u201clittle bit of the perfect storm.\u201d Two of the largest industrial gas companies in the US declined to comment on the carbon dioxide shortage. But Paul Pflieger, director of marketing and communications for the Compressed Gas Association<\/a>, a trade association representing CO\u2082 suppliers including multinational corporations and family-owned businesses, agreed to field questions regarding the situation. He explains that the vast majority of industrial carbon dioxide is created as a byproduct of the production of ammonia for agricultural fertilizers and ethanol, which is added to gasoline. But market conditions caused by the pandemic have disrupted that supply chain.<\/p>\n \u201cDuring Covid, people were obviously driving a lot less, so a lot of ethanol facilities actually shut down and haven\u2019t come back online, which has reduced the amount of available CO\u2082,\u201d Pflieger said in a telephone interview. \u201cAnd then paired with that,\u00a0during Covid, a lot of the ammonia plants in the US didn\u2019t shut down as they were supposed to for normal maintenance, and\u00a0then they scheduled their maintenance for this summer, and they have been shutting down for 30 to 60 days.\u201d<\/p>\n Pflieger also noted that the shortage is exacerbated by the unplanned shutdown of carbon dioxide wells in Jackson Dome, Mississippi, a natural reservoir for the gas that was contaminated by impurities from an extinct volcano. The resulting shortage of both natural and produced carbon dioxide is causing problems across a wide range of industries that depend on CO\u2082 for their operations. Pflieger noted that the cannabis industry is a \u201crelatively small percentage\u201d of the total amount of industrial CO\u2082 used by American companies, with other sectors of the economy claiming the lion\u2019s share of production.<\/p>\n \u201cIn the US. 77% of all CO\u2082 is used in food processing, dry ice and beverages. So that\u2019s a huge amount of demand, especially in the summertime, when everyone is craving beverages\u2014beer, soda, you name it\u2014at a much higher rate, and dry ice is also being used more,\u201d Pflieger says. \u201cWe\u2019ve had a record hot summer. So, all of that goes into\u00a0the demand being a lot higher.\u00a0And with those shutdowns, the supply is a lot lower.\u201d<\/p>\n Although cannabis companies only represent a small portion of the market for industrial carbon dioxide, the gas is crucial to the operations of many producers. Jigar Patel, the co-CEO of licensed cultivator NorCal Cannabis Company, notes that most indoor growers use supplemental carbon dioxide in their facilities to help maximize photosynthesis, which uses light energy to convert water and CO\u2082 into plant sugars that fuel growth. With plants growing at their full potential, the yield of cannabis flower is boosted at harvest time with supplemental carbon dioxide.<\/p>\n \u201cIn indoor cultivation, it\u2019s pretty prevalent,\u201d Patel explains in a phone interview. \u201cAnybody that\u2019s operating at the modern, controlled environment level is using CO\u2082 for plant growth. In a world where efficiency is king, especially given the current market conditions and pricing, CO\u2082 is vital to commercial growers and our ability to maximize our yield.\u201d<\/p>\n The current shortage of carbon dioxide has left cannabis growers scrambling to maintain production. Patel notes that many cannabis cultivators have signed contracts with gas suppliers who provide the tanks and equipment needed to supply carbon dioxide to the plants. In return for making the supplier the grow\u2019s sole supplier of carbon dioxide, the cultivator is spared the expense of installing the system.<\/p>\n \u201cThe Catch-22 there was most of these contracts don\u2019t have an out clause for when they run out of CO\u2082,\u201d Patel says. \u201cSo, your specific\u00a0provider runs out of CO\u2082, you\u2019re stuck between a rock and a hard place in terms of where you can turn.\u201d<\/p>\n When shortages began to affect supplies of carbon dioxide, some suppliers allowed their customers to buy the gas from other companies. But before long, \u201ceven those vendors were having a shortfall,\u201d causing growers to ration carbon dioxide and amend their standard operating procedures. With carbon dioxide in short supply, growers are often pumping fresh air into the growing space instead, which increases air conditioning expenses and other costs related to maintaining the proper growing environment. However, growers are unlikely to recoup their added expenses when they sell their crop, Patel says, noting that \u201cwe\u2019re in the middle of a massive oversupply\u201d that is depressing wholesale prices.<\/p>\n Some manufacturers of concentrates also use carbon dioxide in their production, using the gas instead of hydrocarbons or other powerful solvents to extract cannabinoids from plant matter. Dennis Hunter, co-founder of CannaCraft<\/a>, says that the company, which uses carbon dioxide extraction to produce cannabis concentrates marketed by its AbsoluteXtracts brand, says that \u201cwe have had significant periods without CO\u2082 shipments and our CO\u2082 cost has risen significantly with the shortage,\u201d adding the challenges have meant the company has had to alter its production plans.<\/p>\n \u201cWe have had to delay some operations for several weeks, refocusing our employee labor on production operations that do not require CO\u2082 as part of the process,\u201d Hunter writes in an email to Cannabis Now.<\/p>\n Hunter agreed that it\u2019s difficult to pass on the increased costs of carbon dioxide caused by the shortage to distributors and consumers, saying \u201cthe market is too competitive for the CO\u2082 shortage to result in an increase to our concentrates pricing. As the manufacturer, we will absorb the increased production costs so that they aren\u2019t passed on to our retail partners and customers.\u201d<\/p>\n The combined market forces of a shortage of carbon dioxide and the associated increased costs coupled with a glut of cannabis products depressing prices has the laws of economics squeezing cannabis operators from both ends of the supply chain. However, relief appears to be not far off.<\/p>\n \u201cLuckily, a lot of the problems we\u2019re seeing are going to fix themselves in the next 30 to 60 days,\u201d Pflieger predicts. \u201cA lot of the ammonia plants are coming back online. Hopefully, the temperature in the US is going to start to go down, and the natural wells are back online and they\u2019re putting out clean CO\u2082. As an industry, we\u2019re saying in the next 30 to 60 days, we expect things to start reaching a normal state.\u201d<\/p>\n Patel acknowledges that the situation is beginning to improve.<\/p>\n \u201cOur supplier this week was able to actually fill our tanks for the first time in four months, and appears to have more production online,\u201d he reports. \u201cI think as more and more Americans return to work, and the need for CO\u2082 across all industries begins to increase, we\u2019ll see more and more producers and supply chains get back to their regular cadence.\u201d<\/p>\n Hunter says CannaCraft isn\u2019t expecting the supply of carbon dioxide to fully return to normal until the end of the third quarter, perhaps extending into the fourth quarter of 2022. Even so, he says the company is making costly investments to reduce its reliance on commercial supplies of the gas. With future shortages almost a certainty, it\u2019s likely money well spent.<\/p>\n \u201cThis\u00a0isn\u2019t a new problem in the US. We\u2019ve had CO\u2082 shortages for many, many summers,\u201d Pflieger explains.\u00a0\u201cThis one\u2019s just exacerbated by other issues.\u201d<\/p>\n The post Carbon Dioxide Shortage Impacts Cannabis<\/a> appeared first on Cannabis Now<\/a>.<\/p>\n
Most American consumers are familiar with carbon dioxide, the ubiquitous gas that tickles the nose as a glass of freshly poured cola is enjoyed on a hot summer day. Beyond fizzy beverages, carbon dioxide (CO\u2082) is also used for a variety of applications across a gamut of industries. But aContinue Reading<\/a><\/span><\/p>\n","protected":false},"author":381,"featured_media":0,"comment_status":"false","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[16523,50,16524,16525,170,16526,15598,16527,5153,16528],"tags":[],"_links":{"self":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/57333"}],"collection":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/users\/381"}],"replies":[{"embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/comments?post=57333"}],"version-history":[{"count":1,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/57333\/revisions"}],"predecessor-version":[{"id":57334,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/posts\/57333\/revisions\/57334"}],"wp:attachment":[{"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/media?parent=57333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/categories?post=57333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannabiscultivatornews.com\/home\/index.php\/wp-json\/wp\/v2\/tags?post=57333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Cannabis Companies Rely on Carbon Dioxide<\/strong><\/h4>\n
Relief Is In Sight<\/strong><\/h4>\n
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\nRead More: Carbon Dioxide Shortage Impacts Cannabis<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"