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12-31-2009, 04:51 PM #1
OPJunior Member
The economics of MMJ?
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.starter09 Reviewed by starter09 on . The economics of MMJ? 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 Rating: 5
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