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cost to grow cannabis

Cost to grow cannabis

But why is this information not readily available for us?

May 4th, 2020 by Rudy Ellenbogen

So turning a profit in the cannabis industry can be challenging, especially in the competitive environment many states (like Colorado and California) are experiencing. Thus, the importance of understanding the economics of both setting up a grow facility (CapeX) and running it (opeX).

Now, running a cannabis cultivation operation has several cost components including: cultivation labor, trimming labor, packaging labor, administrative staff, management team, sales and marketing teams, nutrients, soil, packaging, cultivation and trimming tools, rent, utilities, insurance, legal, accounting, banking fees, maintenance, shipping, testing and let’s not forget about TAXES!

Ultimately, all of these costs (fixed and variable) will determine the all-in cost of goods sold of your cannabis flower pound. Your yields will play a significant role on this calculation, as you need to divide the total cost of operations for a period of time (say 1 month) by the number of pounds you produced in that same time-period.

So here are the main KPI’s to focus on:

Finally here is a breakdown of the operational expenses (opeX) of an indoor living-soil cultivation facility:

Cost to grow cannabis

Although it depends on the strain, you should be able to find weed for that price or less at a dispensary. It is when you grow cannabis on a larger scale (within the limits of the law) that you see the real benefits. Let’s say you spend $4,000 on your setup during the year but produce approximately 1,000 grams of marijuana. At $4 a gram, you are definitely winning, especially if you need weed for medicinal purposes .

As temperature and humidity play such a crucial role in growing marijuana, purchase a thermometer and hygrometer, or an all-in-one device. They are available for just $10. If you live in an area where the water isn’t suitable for weed, consider buying a reverse osmosis system to purify the water. The cost ranges from $150 to thousands of dollars.

A 3’ x 3’ tent houses up to four plants and could cost more than $200. Larger tents may cost over $300.

If you are using soil, it is also necessary to purchase different sized pots. When your plant grows, you have to transport it to a larger pot. You also have to purchase soil. There is also the option to buy hardware such as stakes, zip ties, anda screen if you are going to attempt the Screen of Green (SCROG) or Sea of Green (SOG) growing methods.

Labor Costs

According to Grand View Research, the global market could grow to over $146 billion per year by 2025. The legalization of weed in Canada means that America will no longer have such a huge market share, but the industry will grow to unprecedented levels in the near future.

When you add in extra costs such as a hood and ballast, a 1000-Watt setup could cost up to $600. Hopefully, you can produce a gram per watt. This would equate to just under 36 ounces.

With legal medicinal marijuana now available in 33 American states and D.C. , the industry is set for a golden age. In fact, there are so many commercial cultivators that states such as Oregon have a massive surplus. In 2017, the global legal marijuana industry was worth around $9.5 billion per annum; the United States accounted for 90% of it!

Carbon Filters

When it comes to setting up an indoor grow, it is best to keep it simple. It should go without saying that you must purchase feminized seeds , or use cuttings from a female ‘mother’ plant. If you purchase regular seeds, half of them will become male plants. While male plants have their uses, they will not grow the resinous, cannabinoid-rich buds that you want.

If you use a hydroponics setup , you must purchase an inert growing medium such as coco coir or rockwool, and are also responsible for ensuring that your crop gets all the nutrients it needs. The cost of the system itself depends on the ‘type’ you choose. For instance, a 12-plant watering system could cost over $500, but there are cheaper options for under $200.