How much for a pound near you?
- Thread starter Shredder5kallday
- Start date
xtsho
Well-Known Member
It's not uncommon for businesses to price their goods based on the cost to produce them. If it costs 0.25¢ to produce a pound of carrots and they sell it for 0.50¢ they're making decent money on their investment. Many businesses operate on slim margins. I don't see why cannabis is going to end up any different.
Here's a commercial grower in Nevada with costs of $333 to produce a pound and have a target of $150 lb that they think they'll be able to hit. They'll adapt their sale price to stay competitive because if they can get the price to that level others can and will also. Many commercial growers are growing fire for a few hundred dollars a pound. Many of the commercial grows supplying the dispensaries are growing better quality than many people on the cannabis forums.
“Our costs are much different from outdoor [grows] or normal greenhouses,” Sassano said. “Not only must your product look and be amazing, but your facility must also. Upkeep and efforts to remain on the cutting edge cost money, but if you do it smartly you will be successful. We currently are at $333 a pound in costs and trending to $150 a pound without sacrificing anything, because we are improving yield and quality.”
Cannabis Cultivation Costs and Licensing Fees for Legal States
So, how much does it cost to make money growing weed? The cultivation costs vary by state along with the
mgmagazine.com
That particular outfit currently is growing 6K pounds for $10.8 million in revenue. They are expanding to 100K pounds and project the revenue to be $100 million. They're expanding the grow size by a factor of 16.8 yet the projected revenue is is only 9.2 times as much. Likely because they're going to be saving a significant amount of money to produce the product due to the larger scale so they can lower the cost while still making more money. That's the way commercial cannabis is going. It's big business not the old basement grow.
There are different ways to price your goods. Market oriented pricing is what most growers are likely using. Those that can get their costs down are going to price below current market driving others to do the same lowering the market price. It works that way for most items. Eventually you get to a point where the profit margins are slim but due to scale/volume of product sold it is still profitable. That's why many smaller commercials are shutting down. They don't have the scale to sell at current prices and make a decent profit that's worth their time. Larger operations are able to lower their costs on just about everything used to grow. They get better deals on fertilizer, lower prices on lights, etc... So even if they make a smaller percentage per unit they can offer lower prices and still make more money.
I don't believe that there will always be some niche market where people are going to pay 3 times market price. I read the occasional post from someone wanting to get into the commercial market because they had a couple of good grows and think people are going to be beating their door down to buy it. That's not happening going forward. As the black market goes away those stoners that were growing and making money for decades are going to be replaced by larger grow ops ran by people with degrees in Business and Horticulture backed by hedge funds and people with more money than God.
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xtsho
Well-Known Member
The future faces of cannabis are not going to be dudes with long hair and goatees. Here's the new face of cannabis growing. These clowns are already suing each other as well. The actual people doing the manual labor are going to be low paid workers while the dudes in suits are going to be making the real money. It's already happening and will continue.
xtsho
Well-Known Member
It's also Nevada. It's going to be different from state to state. Their offerings are selling for $59 a half ounce in the dispensaries with $99 ounces. So it's nowhere near the "Designer" prices people used to pay. Looks like they do seed to sale so they're not getting low balled by dispensaries that have a line of people trying to get them to buy their product. They are selling direct through their dispensaries. That $1800 just shows how much lower the price can go if it only costs them between $150-$300 per ounce to produce. That's why the price is going to continue to drop.
The large outfits that do seed to sale get actual dispensary prices. The small commercial growers that are out trying to sell their product are not going to get anywhere near $1800. It's a completely different scenario. I'm sure that some of those smaller operations calling it quits would still be growing if they could get dispensary prices. The way it stands now the smaller growers have no bargaining power and have to take what they can get or be stuck with their weed.
So if you look at it from that aspect that $1800 is not what the smaller commercial growers are getting for their weed.
I wouldn't ever get into the business unless I could do seed to sale. That's the business model that makes money. Just growing and trying to sell in a flooded market to the dispensaries is not going to get you anywhere close to $1800 a pound as some commercial growers have already stated which is why they're getting out of the business.
Pricing is going to be market driven. $99 ounces seem to be the norm in dispensaries these days. With federal legalization I can see that price going down significantly especially if there is cross border sales. Oregon's already passed legislation just for that.
Oregon House Passes Bill To Transport Cannabis Across State Lines
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www.opb.org
Drop That Sound
Well-Known Member
Genetically modified tobacco plant produces cocaine in its leaves
Researchers have reproduced the entire biochemical pathway for how coca plants make cocaine in another plant, which could help people manufacture the drug for scientific study
Modifying tobacco plants to produce cocaine.. haha, whats next? Tobacco that produces THC? Cannabis plants that produce nicotine? How much for a pound of cocajuana?
Greengrouch
Well-Known Member
Genetically modified tobacco plant produces cocaine in its leaves
Researchers have reproduced the entire biochemical pathway for how coca plants make cocaine in another plant, which could help people manufacture the drug for scientific studywww.newscientist.com
Modifying tobacco plants to produce cocaine.. haha, whats next? Tobacco that produces THC? Cannabis plants that produce nicotine? How much for a pound of cocajuana?
that’s it, I’m unquitting cigarettes!
bk78
Well-Known Member
You forget the password to the sock you made yesterday already?
Apostatize
Well-Known Member
caregivers in states like Maine and Rhode Island face less regulation/licensing costs than recreational growers and dispensaries. so, historically, even if they're a relatively small outfit, they've been able to price product lower than dispensaries.
also, with droughts/climate change/inflation/supply chain disruptions, the price of fruits and vegetables is skyrocketing at a time when cannabis prices are plummeting. so, why not operate as more of a caregiver (even if illegally), providing patients with variety pack ounces AND $1/lb produce -- c'mon, who's telling on that guy?
if you could get a good price on a variety of strains instead of one strain per bag AND buy produce at a discounted price, there's real value to consumers. plus, not every county wants a dispensary; so, those "dry" counties will remain under-served. consequently, those counties are where a small seed-to-sale outfit can survive.
it also helps to keep your day job working from home (if you can).
[yes, i left; and yes, i can't stand some of you; but, here I am.]
also, with droughts/climate change/inflation/supply chain disruptions, the price of fruits and vegetables is skyrocketing at a time when cannabis prices are plummeting. so, why not operate as more of a caregiver (even if illegally), providing patients with variety pack ounces AND $1/lb produce -- c'mon, who's telling on that guy?
if you could get a good price on a variety of strains instead of one strain per bag AND buy produce at a discounted price, there's real value to consumers. plus, not every county wants a dispensary; so, those "dry" counties will remain under-served. consequently, those counties are where a small seed-to-sale outfit can survive.
it also helps to keep your day job working from home (if you can).
[yes, i left; and yes, i can't stand some of you; but, here I am.]
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DoubleAtotheRON
Well-Known Member
I love helping people when I can.. but do you know how much it costs to make a lb.? It's fucking expensive.
Drop That Sound
Well-Known Member
Seen some decent $25 oz's yesterday. Good enough that it kinda pissed me off... Also seen some very expensive steaks at the grocery store. $20 per portion.
I came home with cheap steaks and a $9 eighth of kush..
I came home with cheap steaks and a $9 eighth of kush..
bk78
Well-Known Member
I don’t think he’s made it to his fist harvest yet
Apostatize
Well-Known Member
bk78
Well-Known Member
Good morning sir
Apostatize
Well-Known Member
That's better.
I was just suggesting that value-add products like affordable produce would create local markets in at least underserved counties and communities. Add variety packs to bags (e.g., qtrs and 1/8ths of different strains in an ounce), focus on flavorful buds, and I think the little guy can survive. Even in recreational states, you have counties that don't want stores in their communities -- definitely in limited med-only states where dispensaries may be multiple counties away.
And not just rural areas. In cities, there are food deserts ... who'd you rather buy a bag from? Seems obvious.
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nxsov180db
Well-Known Member
Guess it depends on if you're counting your labor as a cost or not and if you have to pay employees or you operate a grow you can manage yourself.. for me it pretty much only boils down to the cost of electricity..
DoubleAtotheRON
Well-Known Member
Electrical, nutes, supplies, equipment, self labor, harvest labor… there’s more to it than you think.