Virginia Taxes Data Center Electricity Use, Raises Questions About Cannabis Growhouses
Virginia has enacted new taxes and regulations on data centers due to their high electricity consumption. The article highlights a perceived inconsistency, questioning why cannabis growhouses, which are also energy-intensive, are not subject to similar electricity taxes. It calculates the potential power demand from cannabis growhouses in Virginia in data center equivalents.
Virginia has imposed a new tax on the energy consumption of data centers and enacted other regulations, aiming to address the high-volume electricity use of these facilities. Simultaneously, the state has authorized retail cannabis sales, which are expected to lead to a significant increase in power demand from indoor growhouses.
The article, written by Dwayne Yancey for Cardinal News, points out the discrepancy in taxation, noting that cannabis growhouses, despite potentially using more power per square foot than data centers, are not subject to the same energy consumption taxes. It cites Steve Haner of the Jefferson Journal, who questioned the fairness of taxing AWS more for electricity than other large users like Verizon or Newport News Shipbuilding.
To illustrate the scale of potential power demand, the article calculates the energy equivalency of cannabis production in Virginia based on consumption rates from other states. For instance, if Virginia consumes cannabis at Washington state's rate, its growhouses could require electricity equivalent to 6 to 148 data centers, depending on facility size. Michigan's consumption rate would equate to 3 to 8 hyperscale data centers or 31 to 78 smaller facilities. The core question posed is not whether data centers should be taxed, but why future cannabis growhouses are exempt from similar power consumption taxes.