How much does it cost to grow marijuana
Indoor cultivators produce year-round and can generate between 1 and 12 harvests per year. Main indoor cons include:
- Maintaining proper ventilation is difficult
- Higher household energy costs
- Pumped with fertilizers
Cannabis Cultivation Business Setup, sample
Warehouse 7,700 sq.ft. for about 1,000 plants with estimated yield of 350 lbs., 4 harvests a year.
Cannabis Cultivation Initial investments:
- Warehouse rent – $50,000
- Build out, improvements – $60,000
- Growing equipment – $150,000
- Lighting system – $120,000
- Alarm & Security System – $45,000
- Licensing & legal fees – $55,000
- Direct costs (first months before profit) – $200,000
- Administrative expenses – $50,000
- Other expenses, incl. salaries – $100,000
Total = $830,000.
Cannabis Cultivation Direct & Operating Costs
Direct expenses include electricity, water, labor and packaging costs.
Good lights are one of the most important factors when growing cannabis indoors. You can achieve yields of around 1.3-1.5 gram per watt of light.
Lets try to calculate how much electricity does it take to grow cannabis indoors for our scenario:
- Cost Electricity – $0.1478/kWh
- Number Hours: 1,440 light hours:
Vegetative Stage 720 hours: 40 days of 18/6 schedule
Flowering Stage 720 hours: 60 days of 12/12 schedule
- Wattage: We supposed to use 145,000 W system.
$0.1478 kWh x 1,440 hours x 145 kW = $30,870
However, one thing that’s very important to remember when doing any estimations is that although your grow light may account for a lot of your electricity bill, fans and pumps and other things in your grow room also take electricity. These other items cost 3/4 as much electricity as the grow light. It will be plus about $23,150.
So, total electricity costs will be about $55,000. Water costs will be no more than $700.
- Growing solutions, including nutrients – $7,000
- Cloning – $1,500 (excl. labor and electricity)
- Lab testing – $5,250
- Packaging, transport & storage – $3,000
- Grow Light Bulbs – $1,500
- Other Supplies – $1,750
- Direct labor – 7-8 employees, $50,000
- Taxes – about $55,000
Thus, the direct cost of growing the cannabis will be around $180,700 or $516 a pound (42% of wholesale price). It doesn’t include administrative, marketing, distribution costs and taxes, which varies depending on the location.
Cannabis Cultivation Annual Gross Profit, sample
Sales are about 1,400 lbs. per year:
- Revenue + $1,750,000
- Direct costs – $750,000 (42.8%)
- Gross Profit = $1,000,000 (57.2%)
We offer The Cannabis Cultivation Financial Model which is a fully-functioning Excel financial model that uses a mix of assumptions to estimate cannabis yields, all revenue and cost line-items monthly over a flexible seven year period, and then sums the monthly results into years for an easy view into the various time periods.
We also offer The Cannabis Cultivation Business Plan Template which will help you to create professional cannabis business plan for indoor, outdoor or green-housing cultivation facilities to break down your costs, so you know how much it will take to get into the cannabis business.
The following example demonstartes How much does it cost to grow cannabis indoor if you intend to start a cannabis cultivation business
Why Buy at the Dispensary When You Can Grow Cannabis at Home for Cheaper?
With the legal cannabis market, consumers can buy an array of products without considering cultivation, much like buying produce at a grocery store. Grocery stores are supplied by farms that take care of the cultivation and grow a product at a reasonable price.
For the most part, this is also true of cannabis, but let’s take a look at the numbers and see how growing your own stash and buying from a dispensary or adult use store compare.
How Much Does Cannabis Cost at a Store or Dispensary?
The ability to walk into a store and purchase cannabis products is a luxury that shouldn’t be taken for granted. Products like flower, concentrates, edibles, and more range in potency, flavor, and effect, and require expensive machinery and a high level of skill to produce. The diversity of flower and quality genetics is something most consumers couldn’t dream of 20 years ago.
But these products are subject to high taxes and regulations that make packaging and distribution expensive.
Costs Estimates of Store-Bought Cannabis (click to enlarge)
How Much Does It Cost to Grow Your Own Cannabis?
Growing your own cannabis has its own set of benefits and drawbacks. Taking cultivation into your own hands gives you complete control of what goes into your cannabis, and it also gives you full knowledge of the growing process and a better understanding and appreciation of the plant.
It also allows you to explore growing techniques, genetics, harvest times, and curing strategies. This all requires time and effort, but it’s satisfying in the long run.
But growing your own cannabis does present some difficulties. Pests, mold, and other diseases can rapidly sabotage a grow and leave you with a bad crop. If you’re completely new to growing, trial and error could lead to some costly mistakes as you learn how to properly raise healthy crops with strong yields.
If you’re curious about the approximate costs of growing your own cannabis, keep in mind that pricing varies between growing indoors and outdoors, as well as the size of your grow.
Growing Cannabis Indoors
For our indoor cannabis grow cost estimates, we estimated costs for a 6′ x 6′ grow space, using soil as the growing medium, and only one room for both vegetative growing and flowering. Also, let’s assume we’re in a temperate climate where the use of A/C won’t be necessary, which will save some energy costs.
Not included in the price estimates is the cannabis plants themselves. For this exercise, we’ll use six clones to save space and reduce our vegetative growth time. A single clone can cost between $10-$30, but higher-quality clones can be more expensive. Our plants will spend around a month in vegetative growth and around 8-10 weeks flowering.
Cost Estimates of Growing Cannabis Indoors
|Built grow space (6′ x 6′)||$250|
|1000-watt light setup (ballast, HPS bulb, hood)||$200-$600|
|Metal halide bulb||$30-$100|
|6″ inline fan||$80-$200|
|Six 10-gallon pots||$20-$40|
|Two 30-gallon water tanks||$50-$100|
|60 gallons of soil||$60|
|Nutrient starter kit||$50-$100|
|Hardware (trellising, zip ties, stakes)||$50|
|3.5 months of electricity to power equipment||$700|
|TOTAL COST RANGE:||$1,575 to $2,320|
With a 1000-watt bulb, ideally, you will produce up to a gram of flower per watt. Realistically, when starting out, you might get anywhere between half a gram and a gram per watt. This assumes you avoid pests and disease, and you feed your plants nutrients to keep them healthy. You should set aside an hour or more every couple days to observe your plants and work in the garden to keep your plants happy.
Small Closet Grow
If a 6′ x 6′ ft space is unrealistic, consider growing in a much smaller space using a grow tent. Grow tent dimensions start at 2′ x 2′ x 5′ for under $1,000, which includes everything you’ll need to grow cannabis except for soil and the plants. You can usually grow two to four plants in 1- to 3-gallon pots, and you’ll most likely use a 400-600 watt light.
Cost Estimates of a Small Closet Cannabis Grow
|2′ x 2′ x 5′ grow kit||$900|
|Four 3-gallon pots||$20|
|20 gallons of soil||$20|
Growing Cannabis Outdoors
Growing cannabis outdoors can be a very simple startup process. The biggest factor to take into account is the climate where you live. It needs to be sunny and dry enough to promote growth and prevent rot, and it needs to stay sunny and warm long enough into the fall to allow the plants to finish flowering. Growing in a greenhouse can help regulate temperature and moisture-related issues.
For this estimate, we are growing in a climate where plants can be outside from the start of the season (July) to the end of the season (October). Again, we assume using clones to start, which aren’t included in our cost estimates.
Cost Estimates of Growing Cannabis Outdoors
|45 gallon smart pots (5 count)||$80-$140|
|Soil (20 gallons, 12 count)||$300-$500|
|Watering tank (250 gallons)||$500|
|Mixing tank (50 gallons)||$100|
|Hardware (trellising, zip ties, stakes hoses, valves)||$400|
|TOTAL COST RANGE:||$1,830-$2,940|
You can get high yields of quality product growing outdoors. A plant grown in a 10-gallon pot should net you between 1-2 lbs of flower. You’ll need to consider the amount of time you will put into your garden—a couple of hours every couple of days on average should be enough to take care of your plants. Some days won’t require any work while others will require a bit.
Other expenses that may have an impact on your grow are equipment having to do with security or controlling odor.
If you already own equipment from growing other types of plants, you can certainly reuse many of these startup materials for growing cannabis. Growing just a plant or two in your yard will cost even less than the prices listed in these table.
Estimated Price Per Gram of Indoor and Outdoor Cannabis Grows
|Yield||Cost||Price Per Gram|
|Indoor 6’x6′ – 500 grams||$1,948||$3.90|
|Indoor 6’x6′ – 1,000 grams||$1,948||$1.95|
|Indoor 2’x2′ – 200 grams||$940||$4.70|
|Indoor 2’x2′ – 400 grams||$940||$2.35|
|Outdoor – 2,000 grams||$2,385||$1.19|
|Outdoor – 4,000 grams||$2,385||$0.60|
Looking at these totals, you’ll find that growing can be done for a much lower price than purchasing your product at the store. However, labor and property aren’t included in these costs. Someone will have to check in on the garden daily and spend time pruning, trimming, feeding, watering, and monitoring the plants for signs of disease, rot, or mold. Growing cannabis is labor-intensive and can be difficult, but if you’re looking for a new hobby and have the time to dedicate to it, you will save money and enjoy yourself.
Labor Costs and Their Impact on Price Per Gram
When including estimated labor costs of $20 per day for the growing period, the prices change significantly. (We adjusted the labor time needed for the 2′ x 2′ space at $10 per day because the size of the space is much more manageable.)
- Indoor 6′ x 6′ space: $140 per week x 14 weeks = $1,960
- Indoor 2′ x 2′ space: $70 per week x 14 weeks = $980
- Outdoor space: $140 per week x 20 weeks = $2,800
Estimated Price Per Gram of Home Grows Including Labor
|Yield||Cost (Including Labor)||Price Per Gram|
|Indoor – 500 grams||$3,908||$7.82|
|Indoor – 1,000 grams||$3,908||$3.91|
|Indoor 2’x2′ – 200 grams||$1,920||$9.60|
|Outdoor – 2,000 grams||$5,185||$2.59|
|Outdoor – 4,000 grams||$5,185||$1.30|
Reflecting on the costs between purchasing cannabis and growing your own in addition to the benefits that each method has to offer might have you clearly leaning to one side or stuck in a stalemate. Cannabis is not cheap or easy to grow, and chances are you will get higher quality, more diverse products at the local shop.
However, if you want to explore producing your own crop and if it feels less like labor and more like a hobby, then perhaps a personal garden is the way to go.
Cannabis legalization allows consumers to buy various products at dispensaries without having to cultivate plants, but does it cost less to grow your own?