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"For some reason, there's a lot more cannabis grown in Arizona than Arizonans use. And so, a lot of folks are getting out of that business, like myself, at least on the cultivation side. But these facilities can potentially be repurposed to be mini data center nodes," Moe Asnani, the former owner of two Tucson D2 Dispensaries, told the public broadcaster. He also added, "The whole idea is if you create these smaller nodes where people control their own data, where they're not at the mercy of other people's updates and things like that — that's kind of where the idea came in, because I believe in decentralization."
Cannabis farming is both power- and water-intensive. Forbes looked at a 32,850-square-foot cannabis facility in Kalamazoo, Michigan, which is currently wired for 1.5 megawatts, which can be expanded to 2.5 megawatts in under a year and 15 megawatts in the long term. It's also provisioned for fiber internet and equipped with a state-of-the-art HVAC system for climate control, which should make it a tempting property for anyone wanting to put up a small data center — something that even OpenAI and Anthropic are interested in as massive hyperscale sites face opposition from the community.
This concept is dubbed "adaptive reuse," with Tucson City Council member Paul Cunningham saying that it’s a more palatable alternative to massive, purpose-built sites sitting on the outskirts of town. "Data centers are dirty words, and everybody knows that. And no one wants to build a brand-new data center anywhere," the politician said. "But if we have buildings that were using that amount of water and that amount of energy already in their previous function and [it] can be done without being invasive, I'm OK with exploring that option."
There is massive demand for data centers, but it’s not a guaranteed payoff for struggling cash-strapped growers looking to unload their unprofitable properties. Niki Krear, vice president of acquisitions of real estate investment trust New Lake Capital Partners, said that there’s a sweet spot between connectivity, costs, and regulation that data center operators look for in a site.
China shifting massive AI data center complexes to rural provinces to tap surplus energy
OpenAI and Anthropic scramble for smaller data centers as massive gigawatt projects lag
Nvidia eyes converting old nuclear plants into massive AI data centers
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/data-centers/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/data-centers/cannabis-farmers-consider-joining-ai-bandwagon-due-to-falling-weed-revenue-existing-sites-could-house-mini-data-center-nodes-but-still-face-serious-challenges-during-conversion#main
- https://futureplc.com/privacy-policy/
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Informational only. No financial advice. Do your own research.