The economics of MMJ?

[starter09]

If it was an honest discussion you were looking for then you should have kept your thread less aggressive.
Good luck in your search for a better solution, as I know that they are out there.

Kinda reminds me of stepping on a yellowjackets' nest while fielding a fly ball as a kid. Talking about money gets a lot of stuff flying real fast, don't it?

Aggressive was not the intention - but I do come with a viewpoint, and felt it best to get it upfront. Yeah, it's a cynical, jaundiced viewpoint that most times skews populist. But c'mon guys, if I have to Kubler-Ross my very first, 40+ year-old, pothead utopian fantasy, bear with me. And thanks, sittingone, for the good wishes.

My first point - MMJ is now a marketplace item. In general: Sellers are going to seek max profit, customers are going to seek best deal. There are economies of scale that will favor bigger and quality issues that will favor smaller, growers. Smaller grower's prices will be higher. These are basic economics that will apply here, as elsewhere.

Second - I really believe this is early days, and the situation a year from now will be different, and so on. But that means what we do now matters to what the future looks like.

Third - these were not my numbers, if fact I question many of them. That's why I posted this to get some discussion going. Thanks for the stuff we did get, though.

Palerider - I agree with your points. And 31/8th is a better price than I get from my caregiver. But I'm not sure how typical you are. And a lot of patients have no idea how to find a caregiver.
So $1200 rent is too low; better number? Any commercial real estate folks out there who could give us a better idea?
As to ongoing biz expenses, the guy with the original numbers had a line item for that; do you disagree with his numbers?
$38,400 base for you, okay. And if you need employees for a large-scale grow, what's fair for them? Greenhouse work has long been woefully underpaid (been there, done that)

These are the kind of figures I'd hoped we could start groping toward.

I know yields are impossible to accurately quantify, too many variables - but there are people with experience in growing good quantities, their methods and yields are all over the Web in forum threads, grow diaries and journals.

I think discussions of costs and prices are going to emerge more and more as MJ moves into legality in small, slow steps. I'll bet you they're going to be part of the MMJ discussions at the state legislature this session; I want enough info so I can intelligently take part in the debate.

BTW - Delta9; I had a good strong impression of your operation from posts here. Your ad hominem first post to this really pissed me off, though, because you so obviously failed to RTFPost! and implied ignorance on my part with no basis in fact. Hope you conduct your business more professionally.

[palerider7777]

Look, I have NEVER claimed to know anything about the business, BUT, BUT, BUT, it does NOT need to be this expensive. PaleRider, I do understand what you're saying about money and people, something always gets jacked.

Like I said, I know it's a pipe dream. Either way, at the end of the day, it's going to be me growing for the wife and I in the garage.

and if that is something that is feasible to do then that is great for you to do. infact if 1 can do there own that is best. you know it in and out and there's no if's to what it is or can do for u.

and alot of these guys that bitch about price they want it cheap so they can take all of your hard work and flip it and make them money.sure there are really sick peeps out there that need it and im sure like myself most growers that knew this for a fact about someone would do what they really could to help that person. but go look up the fact stats on who has the card and what they have it for.

most that have it are for minor aches and pains and most beyond that just want to get high lets look at the facts here.out of those that just want to get high not only do they want to get high they want to lowball the ones doing the real work the real risk so they can cut theres off it to keep getting high.then flip the rest to make them money.these people come from the streets and so did the street mindset they are in.do i think any of that is bad? nope not 1 bit it's called human survival.is it wrong for someone wanting to get high and using the "system" to do it? i don't think so,have i ?

no i never touched this stuff ever for any reason until the day i saw my dad dying from cancer and seeing all the bs pills and patches and chemo he was taking and how it was killing him.how weed could have prolonged his life instead of taking it from him.it would have made it able for him to eat,sleep,not throwup so on.those drugs he was taking ended up giving him a stroke and he was in so much pain that he ended up shooting himself in the head in my house"he lived with me so that i could be close and to help him when needed".

after that i myself was hurt on the job with other things like ddd,and such that i have had my whole life but still would work 120+ hours a week non stop for months.it was how i was raised by my dad,he was a force recon marine.

the reason i know so much of the street and how it works is because of my bro and family thats how they are hard core.stupid i say but thats how they are.

so i know both sides very well and how people think. and im fine with whatever i just see that these people that whine and cry and so on don't know shit about shit they just want a free hand out in the name of this "compassion" bs.but when u ask them u do it and i want u to do what your saying everyone should do then it's like"where'd ya go??"oh u ment everyone else but not you? as jack/melvin says think white and get real im not doing it.....lmao

[copobo]

they aren't YOUR plants until they are in YOUR space being cared for by YOU at YOUR risk.

If the economics of what other people are doing bugs ya, go pick up some lights and some dirt. though for your yields, I would suggest some coco and a pretty nice DWC setup, and 40-80 hours a week to tend the grow, trim, harvest, clone, clean...

and if anyone knows where there is 1000 feet of commercial space in Boulder County for $1200 NNN, let me know! LOL

all that said, >$15 a gram is bullshit, in anyone's economy. it's much better to give your caregiver rights to a grower than a dispensary. growers can treat you better without a middleman. it's just harder to meet a grower and get the offer..

[palerider7777]

Kinda reminds me of stepping on a yellowjackets' nest while fielding a fly ball as a kid. Talking about money gets a lot of stuff flying real fast, don't it?

Aggressive was not the intention - but I do come with a viewpoint, and felt it best to get it upfront. Yeah, it's a cynical, jaundiced viewpoint that most times skews populist. But c'mon guys, if I have to Kubler-Ross my very first, 40+ year-old, pothead utopian fantasy, bear with me. And thanks, sittingone, for the good wishes.

My first point - MMJ is now a marketplace item. In general: Sellers are going to seek max profit, customers are going to seek best deal. There are economies of scale that will favor bigger and quality issues that will favor smaller, growers. Smaller grower's prices will be higher. These are basic economics that will apply here, as elsewhere.

Second - I really believe this is early days, and the situation a year from now will be different, and so on. But that means what we do now matters to what the future looks like.

Third - these were not my numbers, if fact I question many of them. That's why I posted this to get some discussion going. Thanks for the stuff we did get, though.

Palerider - I agree with your points. And 31/8th is a better price than I get from my caregiver. But I'm not sure how typical you are. And a lot of patients have no idea how to find a caregiver.
So $1200 rent is too low; better number? Any commercial real estate folks out there who could give us a better idea?
As to ongoing biz expenses, the guy with the original numbers had a line item for that; do you disagree with his numbers?
$38,400 base for you, okay. And if you need employees for a large-scale grow, what's fair for them? Greenhouse work has long been woefully underpaid (been there, done that)

These are the kind of figures I'd hoped we could start groping toward.

I know yields are impossible to accurately quantify, too many variables - but there are people with experience in growing good quantities, their methods and yields are all over the Web in forum threads, grow diaries and journals.

I think discussions of costs and prices are going to emerge more and more as MJ moves into legality in small, slow steps. I'll bet you they're going to be part of the MMJ discussions at the state legislature this session; I want enough info so I can intelligently take part in the debate.

BTW - Delta9; I had a good strong impression of your operation from posts here. Your ad hominem first post to this really pissed me off, though, because you so obviously failed to RTFPost! and implied ignorance on my part with no basis in fact. Hope you conduct your business more professionally.

some of this could be true but the thing is we don't know whats in line for us just yet,notice it has been a big fight every step of the way.the norm is the harder things are or become the higher the price gets. as it's more difficult to produce.as you can see every other day now the state/counties are trying there best. to throw as many wrenches in the cog wheels as they can around here.everything from shutting down shops to trying to redefine "caregiver"to many other things going on.

i don't ever see it going to much cheaper than it is. see i think alot of people like yourself even maybe?think like you said above"now a marketplace item" this way of thinking can be somewhat cloudy in a way.see once you start thinking like that it's in your mind to think just look at t'vs lcd's 3 years ago a 42 inch would run upwards of 2k+ now you can get them for under 1k. so then you start thinking your meds should do the same?? here's the problem with that way of thinking,first tv's keep getting better and better same with any electronic.weed is weed and it will always be what it is,will it vary a bit in taste,smell,potence? sure but no way like the marketplace items.

look at pharma drugs do you see oxy's lortabs and such going to rock bottom prices? they have been around how long now? when your doc writes you a script for meds do you bitch him out for the price of his visit? do you go to walgreens and bitch them out or call them rip off's? people have been programmed into accepting certain things as"thats just how it is".all the while being happy as a lark to deal with that "shady" street dealer and him shorting you when ever he pleases.selling you bunk but passing it off as"the fire".

but as soon as it becomes legal people act as if it should be given away?that still urks me.if your looking at it as meds where do people come up with that it should be free or next to nothing in the name of "compassion".it's a drug like any other,it takes someones time, labor,money and so on to produce.do you dictate pharma meds prices? this way of thinking is what is giving the state ammo against us saying we can not regulate this our selfs so they need to jump in.people need to wake up to this fact.

u might then say good we want that? i think not that 60 an 1/8 th just shot up to 120 or better.how? well gov gets into it they will 1 tax the hell outta it alot more than now,then they will make you go to doc as he's the one with "knowledge" and he needs to write the scripts then you will have to go buy it.im sure they will find a way to make it where you can't grow it from all the dangers they say come with it all.don't forget leo still calls it a bad gateway drug.

ps instead of focusing on price one needs to focus on how/what we need to do to get more power and rights better limits and so on instead of price.while the ones crying about prices the state is doing everything they can to take as much of our voted rights back as much as they can.you have to have your priorities in line. don't think that everything is fine and it's just legal now cause it's not.

[FarmerSteve]

What we have to hope for is that the government doesn't take over production rights. I'm sure they'd rather have ALL of the money from a $100 sale than just $8 in the form of taxes.

I want to make sure that I am clear that I KNOW that growing good to great bud is difficult and time consuming, but it is not impossible. I find that almost everyone at EVERY level chooses the path of least resistance and that's part of the reason we're in the mess we're in here in America. How little can I do?

No matter what it has ever been, I always succeed, because I TRY. So I'm not worried about the work aspect of it. On the other hand, I had no idea there were so many scammers in the marketplace, coming from the "patient" side of things. But it's no surprise.

We don't lack good ideas, it seems we're lacking good people.

[PufferLungs]

I have dreams of 2 rooms. One for vegging and the other for flowering.

I'd want to let my girls grow 6 months from clones to harvest as I feel that would provide the best yield. It sure would be cool to start 1 new plant every month. It'll take you 6 months before the first plant is ready, but from there on out you're harvesting 2oz or 3oz every month.

I smoke about 1/4oz - 1/2oz a month, so thats a lot of surplus for me.

Of course I'll have to move out of this apartment before that dream ever come anywhere close to reality. I won't take the risk of growing in my apartment.

[redtails]

What we have to hope for is that the government doesn't take over production rights. I'm sure they'd rather have ALL of the money from a $100 sale than just $8 in the form of taxes.

I want to make sure that I am clear that I KNOW that growing good to great bud is difficult and time consuming, but it is not impossible. I find that almost everyone at EVERY level chooses the path of least resistance and that's part of the reason we're in the mess we're in here in America. How little can I do?

No matter what it has ever been, I always succeed, because I TRY. So I'm not worried about the work aspect of it. On the other hand, I had no idea there were so many scammers in the marketplace, coming from the "patient" side of things. But it's no surprise.

We don't lack good ideas, it seems we're lacking good people.

It's the same with any aspect of the black market especially, or really any profitable market. There's some good & some bad, you just have to be careful.

[palerider7777]

It's the same with any aspect of the black market especially, or really any profitable market. There's some good & some bad, you just have to be careful.

the gov is who created the black market,things like mj that should never have had to been labeled as such to begin with.

[MEDEDCANNABIS]

Like most newbie license holders I was initially ecstatic. Ya mean I can buy shit legally???? Suddenly, shopping became interesting, so many dispensaries, so many strains.

Kids in candy stores seldom think about price but I'm a retiree on a small, fixed income so eventually I started noticing that $60 an eighth adds up real fast.

Ecstasy switched to indignation. Why does this cost so much if it's legal? It's a weed, for decades we've been told how easy it is to grow. More importantly, no one can grow legally unless they have patients - it is my license, my plants, not the grower or dispensary owner's.

So I started looking around for a caregiver who knew what they were doing.

Lots of not-so-good choices. 10% discount on dispensary prices seemed most common. I found better, eventually - but even that deal, at it's best, will only provide me with 1/4 of my need.

There's pushback from some growers/caregivers too, claiming that we don't have a clue how much it costs to grow or what a reasonable harvest is. They're right; I don't know what the real costs of growing are.

Seems to me the people who would really know this are long-time growers, but they've been illegal for so long that coming out isn't gonna happen any time soon.

I found this today on cl. I think it's a good starting point for a real discussion, even though there's no sources given for any of the numbers.

I hope anyone with knowledge of any part of this would comment.


Caregiver initial investment in a commercial grow space to grow plants for 16 patients including lights, ventilation, propagation, genetics, construction, re-wiring, etc:............ $30,000

Monthly rent/least on commercial space, about 1000 ftsq:..................$1200

Business Licenses, legal consultation, business plan :.............$2000

Expenses to pay labor during harvest/trim (monthly):....................$1000 or trade medicine

Monthly electricity, maintenance,etc:.................................. ............$1000

So, that's a $32,000 initial investment with about $3200/month in expenses (monthly expenses are estimated HIGH to give you room to economize in the future) so your first year would cost you about $66,000.

This gives you the ability to grow for 16 patients or about 96 plants with no more than 48 being mature. i.e if you had two 6-month cycles(yes you can have more but for simplicity of this argument we'll consider 2 harvests) as a professional you should harvest anywhere between, 50 and 100lbs of top quality medicinal cannabis per year. If you can't do this then GET OUT OF THE BUSINESS and stop whining.

So here's the nugget: using just the low end, 50lbs, which is 800 ounces. If you sold your medicine for $250/ounce (about $150 less than dispensaries) that's $200,000 in your first year, minus your start up costs and you make a profit of $134,000 and year two would not have the $32,000 initial investment as you already recovered that so your profit goes UP!!! We've not even touched upon the fact that you'll have the same weight in leaf/trim that you can turn into edible cannabis, hash, kief, etc which all commands a much higher retail price.

THE TRUTH IS OUT THERE JUST ASK QUESTIONS!!!


The yield assumption is what, about a half pound per plant on his low end? That's important because we're talking about profits here, I think growers are entitled to make money at what they do but they ain't Wall Street bankers.

Real simple stuff here. What we pay - what it costs per oz to grow = profit.

On my plants.

Still got some indignation, yessir.

Learning to grow my own I am, small apartment or not.

your forgetting about down time there is gap in production to patient time. your legal fees , consultation,and biz plan way too low. 50-100lbs are you kidding?? at that rate you will need a much higher service bill. and as a pro you will need to accomadate pros and cons that are inherent with growing. losses are the same for indoor as for outdoor.

meded so you can mededicate to mededitate

[ColoradoCareMMJ]

Like most newbie license holders I was initially ecstatic. Ya mean I can buy shit legally???? Suddenly, shopping became interesting, so many dispensaries, so many strains.

Kids in candy stores seldom think about price but I'm a retiree on a small, fixed income so eventually I started noticing that $60 an eighth adds up real fast.

Ecstasy switched to indignation. Why does this cost so much if it's legal? It's a weed, for decades we've been told how easy it is to grow. More importantly, no one can grow legally unless they have patients - it is my license, my plants, not the grower or dispensary owner's.

So I started looking around for a caregiver who knew what they were doing.

Lots of not-so-good choices. 10% discount on dispensary prices seemed most common. I found better, eventually - but even that deal, at it's best, will only provide me with 1/4 of my need.

There's pushback from some growers/caregivers too, claiming that we don't have a clue how much it costs to grow or what a reasonable harvest is. They're right; I don't know what the real costs of growing are.

Seems to me the people who would really know this are long-time growers, but they've been illegal for so long that coming out isn't gonna happen any time soon.

I found this today on cl. I think it's a good starting point for a real discussion, even though there's no sources given for any of the numbers.

I hope anyone with knowledge of any part of this would comment.


Caregiver initial investment in a commercial grow space to grow plants for 16 patients including lights, ventilation, propagation, genetics, construction, re-wiring, etc:............ $30,000

Monthly rent/least on commercial space, about 1000 ftsq:..................$1200

Business Licenses, legal consultation, business plan :.............$2000

Expenses to pay labor during harvest/trim (monthly):....................$1000 or trade medicine

Monthly electricity, maintenance,etc:.................................. ............$1000

So, that's a $32,000 initial investment with about $3200/month in expenses (monthly expenses are estimated HIGH to give you room to economize in the future) so your first year would cost you about $66,000.

This gives you the ability to grow for 16 patients or about 96 plants with no more than 48 being mature. i.e if you had two 6-month cycles(yes you can have more but for simplicity of this argument we'll consider 2 harvests) as a professional you should harvest anywhere between, 50 and 100lbs of top quality medicinal cannabis per year. If you can't do this then GET OUT OF THE BUSINESS and stop whining.

So here's the nugget: using just the low end, 50lbs, which is 800 ounces. If you sold your medicine for $250/ounce (about $150 less than dispensaries) that's $200,000 in your first year, minus your start up costs and you make a profit of $134,000 and year two would not have the $32,000 initial investment as you already recovered that so your profit goes UP!!! We've not even touched upon the fact that you'll have the same weight in leaf/trim that you can turn into edible cannabis, hash, kief, etc which all commands a much higher retail price.

THE TRUTH IS OUT THERE JUST ASK QUESTIONS!!!


The yield assumption is what, about a half pound per plant on his low end? That's important because we're talking about profits here, I think growers are entitled to make money at what they do but they ain't Wall Street bankers.

Real simple stuff here. What we pay - what it costs per oz to grow = profit.

On my plants.

Still got some indignation, yessir.

Learning to grow my own I am, small apartment or not.

Well your numbers are a bit skewed. First of all a 1000 sqft is not nearly sufficient to produce the amount that you believe should be harvested (50-100lbs annually). Managing that you can find a landlord willing to facilitate such a high risk venture and not double the rent on you, then you are on a start.

Now 1000 per month for electricity, again if your looking to produce large quantites of cannabis your electric bill will not be this low.

I dont know of any trimmers who will work for 1000 per month, unless they are working very slowly or very few hours. The going rate is usually 200 per pound and it usually takes them a day or two to trim a pound. So if you can do 3lbs in a week your looking at a salary to 2400 per month, per trimmer.

Now yields... you say 48 plants mature to get 50 lbs. Your looking at a long time in veg and having to use a commercially viable high yielding strain to achieve these numbers, and this is using up every inch of the warehouse youve indicated. If your vegging plants for that long your going to need a pretty large sized vegitation room. Now you say "high quality top notch" cannabis. Well most people do not tend to designate high yielding commercial strains as quality, many of the potent resinous strains that patients tend to benefit from are usually low yielding thus making it an even harder job to produce the quantities you speak of....

I think some people tend to look to much at the quick numbers without really acknowledging all the over head and time spent. Theres alot of money that goes in, but there is sure a heck of alot of money that gets spent...

I emplore anyone who believes that there is such easy money in this industry to test their luck. Most find out that the money is not quite as easy as they expected. Think about it, if there were such huge profits to be made, the growers who have been growing for 40+ years would have retired 20 years ago...:thumbsup: