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!
Building a new indoor or greenhouse cultivation facility can cost millions. Depending on the quality of the infrastructure and the capacity of the systems an indoor grow of 10,000sf can easily cost $2,000,000. And that is just the build out (retrofit), not considering the land. 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).
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).
First, because commercial cultivation operations are fairly new, there is not enough data (unless you have operated your own facility–lucky us!) but also it is because these KPI’s are very dependent on your cultivation and post-harvest methodologies. The level of automation some mass-market growers achieve using an automated fertigation system and a trimming machine allows them to cut on labor costs and therefore cut on overall operational costs but that comes at expense of the quality (and that's reflected on the price per pound).
So here are the main KPI’s to focus on:
The other good thing about LED lights is that they are cost effective. Using LED lights can save you money compared to Compact Fluorescent Lights (CFL). CFL lights take longer to become fully lit and can’t be dimmed, so they’re not very energy efficient. LEDs emit very little heat to produce the same amount of good light as HPS lights. You can produce a much larger yield with 5 marijuana plants in a 600-watt grow tent (see above) using HPS lights than with CFL lights in the same space.
LED lights have received quite a bit of attention over the years with some growers saying they produce very high yields. While this fact still remains to be settled, here are some things to consider if you plan to use them.
Save Money – No Tent Needed
Knowing how to grow a small weed plant is likely the hardest part of actually growing it. Now that you know what to do, you are well on your way to enjoying hassle-free, home-grown marijuana.
Indoor growing using a 600-watt grow tent
Your marijuana plants need enough light to grow, and generally, 3-4 hours of direct sunlight is the minimum needed. A windowsill will typically give them enough to do it effectively. Grow lights can provide higher yields, but natural sunlight has been doing a great job since long before LEDs were invented, and it’s totally free!
As you can see, growing in the sun is the most cost effective way to get great bud at home. Growing marijuana doesn’t have to be expensive, and it definitely does not have to be hard, when you start with a Pot for Pot.
Below are some costs that are typically associated with growing marijuana:
Typical Costs of Growing Marijuana
Even when growing with lamps indoors, a single marijuana plant can yield a whole pound of weed with the proper growing techniques. Clearly, less is the most cost-effective option!
In many areas, there is a six-plant limit. If that seems small, keep in mind that with just six plants or less, you can still yield plenty. Plus, it is way easier to handle six plants instead of something like fourteen. This is especially true when growing indoors. Think about how much yield you can produce under a grow lamp. For example, using four plants under a 600-watt HPS (High Pressure Sodium) lamp will produce more yield than squeezing sixteen of them under that lamp.
In June, the wholesale price for cannabis from last year’s harvest dropped from around $1,200 a pound when the 2021 light deprivation or “dep” crop began to hit the market, according to Humboldt County Growers Alliance executive director Natalynne DeLapp.
How did we get here?
Proposition 64 legalized the recreational use of cannabis in November 2016.
Calls for action
Although the future remains uncertain, Jason Gellman said he will not give up his farm or his passion for growing quality cannabis. (Jason Gellman — Contributed)