When those in the lighting industry talk about the current sweet spot for light-emitting diodes, many tout the quick payback of outdoor lighting for cities or cold storage, as well as the increasingly compelling case for LEDs in retail and office environments.

One of the next killer apps, however, is for a market just emerging from a smoke-filled cloud of nebulous legality: indoor marijuana crops.

Way back in 2011, long before recreational pot was legal in a few states, indoor marijuana grow operations were costing the U.S. about $5 billion annually in power theft. Now, with legalized grow operations in an increasing number of states (whether for medical or recreational purposes), the sky is the limit when it comes to supplies for cultivating weed, which requires powerful lights and indoor irrigation systems.

The best bet to cut power is to switch to LEDs, which not only use far less energy than high-intensity discharge lights, but which can also be tailored to the specific crop. The overall LED grow-light module market is expected to move from $395 million in 2013 to $3.6 billion by 2020, according to WinterGreen Research. That upward trend will largely be driven by weed. One LED startup, Intelligent Light Source, is targeting the legal (and perhaps indirectly, the not-so-legal) grow ops of individuals and businesses with lights that are tailored to help them get the most from their bud.

“Our focus is from the home grower to the boutique grower,” said Jack Abbott, co-founder of Intelligent Light Source. “Someone who wants a highly differentiated crop.” And unlike with the grow lights of yesteryear, the company isn't just advertising in the back of High Times or on websites emblazoned with weed leaves.

Intelligent Light Source is leaving the LED commodity market for grow lights to the big guys, such as Philips and General Electric. On the other end of the spectrum are the products from companies like HelioSpectra, which are at a far higher price point than what ILS is selling. ILS is focused on the equivalent of the craft beer market in the marijuana space. Overall, pot prices have already dropped 40 percent in Washington state as more growers get up and running, “but the highly specialized guys are still doing great,” Abbott said.

The right light

While the energy savings that can be achieved by switching to LEDs are substantial, most growers will look at a company like ILS to help fine-tune their product, whether that elusive quality they're seeking is a certain flavor or size of bud. Even with the recent falling prices in the Washington market, Abbott said that many growers are still making so much money that for now, they simply do not care about the energy bill. For public utilities in areas where large numbers of grow ops are located, the lack of concern about energy efficiency is a confounding problem.

With energy efficiency little more than an afterthought and utility rebates for grow lights not coming anytime soon, the sales pitch for companies like ILS revolves around product performance. It’s already well known that the red and blue spectrums are ideal for growing plants, and some plants need a different combination of those to grow well. However, research is increasingly showing that plants also need a different balance of light spectrum at different stages of growth.

“There are so many variables,” said Abbott. “We’re just at the beginning of understanding this.”

ILS is speaking directly with marijuana farmers and also with dealer networks that supply products to indoor agriculture. There is a growing army of consultants that help legal pot growers set up operations and act as gatekeepers to the market, so ILS is also courting those consultants. Additionally, various researchers, including some at MIT, are using ILS lights in their studies.

Not only can growers adjust the light spectrum, but the lights can also turn on and off slowly to mimic the conditions of dawn and dusk. They also have a high-speed flickering capability, which allows them to sit closer to the marijuana canopy, something that is important for densely spaced marijuana plants, but which would burn some other crops, like lettuce.

The lights are manufactured in China, but all of the design work for the lights and fixtures is done by ILS in California. Unlike commodity LEDs, the chips are more expensive because they provide a fuller spectrum, including the far red spectrum, which drives up cost.

ILS expects that growers will be willing to pay a premium for better yield and the ability to fine-tune the light -- and not just marijuana growers. The startup, which is self-funded, expects at least half its business will come from pot growers, but the rest could come from the emerging global indoor agriculture industry.

“The pace of change and the innovation in the next five years will be driven by [marijuana] because it’s such a high value crop and it’s growing so quickly,” said Charles Gillespie, co-founder of ILS. “But we’ve been surprised how receptive some very large agricultural guys are.”