I found an article with one question – “Can growing marijuana be profitable?” It is a strange question – any business can.
However as said Antoine de Saint-Exupéry: “A goal without a plan is just a wish.”
Cannabis Cultivation Business Plan
As the cannabis industry grows, so does the competition and the investment needed to start. Most states require an address on the application of where you intend to set up your facility. This allows the licensing committee to verify the location meets all the requirements and restrictions. However, this also means you will need to have the place rented out or purchased before the application is submitted.
Total production will depend on the strain selected, the growing method used, and how well growing conditions are controlled. Total revenue will depend upon the weight and the variety of marijuana grown. The most potent marijuana, with the highest retail price, does not necessarily produce the greatest amounts. There are some varieties that produce in huge abundance but are not as potent or as fragrant, so they don’t command the highest price per pound.
Roughly, there are three options to grow cannabis: outdoor, indoor and greenhouses. Outdoor cultivators produce one harvest per year in the fall, whereas indoor cultivators produce year-round and can generate between 4 and 6 harvests per year. Greenhouse cultivators combine elements of both – exploiting natural light, while leveraging infrastructure and technology – to produce between 1 and 4 harvests per year, though sophisticated, well-equipped greenhouses can run year-round on schedules analogous to indoor production.
The following scenario assumes a company sets aside 3,600 sq ft space for growing marijuana. As with the other financial examples, these numbers are examples only to demonstrate what might be a typical result. These numbers demonstrate the profit potential in marijuana cultivation.
GreenHouse Scenario
Greenhouses are showing cost savings of about 33% electric costs for growing marijuana.
| Year 1 | Year 2 | |
| Capital Expenditures | 143,000 | |
| Direct Costs | ||
| Cultivation Electricity | 24,500 | 42,000 |
| Cultivation Water | 933 | 1,600 |
| Cultivation Labor | 90,000 | 120,000 |
| Growing Solutions | 840 | 1,440 |
| Operating Expense | ||
| Legal Fees & Licensing | 10,000 | 3,333 |
| Administrative expenses | 3,600 | 3,600 |
| Community Service, Improvements | 1,000 | 2,400 |
| Sales & Marketing | 12,400 | 68,400 |
| Misc. | 4,500 | 6,000 |
| Operating Cash Flow | (35,773) | 284,050 |
| Investments | 143,000 | |
| Working Capital | 110,000 | |
| Ending Cash Flow | 74,227 | 358,277 |
Indoor Scenario
3,600 sq ft warehouse for growing marijuana, with about 15 lights of 1,000 watts each.
| Year 1 | Year 2 | |
| Capital Expenditures | 113,000 | |
| Direct Costs | ||
| Cultivation Electricity, incl. cooling | 85,750 | 147,000 |
| Cultivation Water | 1,400 | 2,400 |
| Cultivation Labor | 90,000 | 120,000 |
| Growing Solutions | 1,120 | 1,920 |
| Operating Expense | ||
| Legal Fees & Licensing | 10,000 | 3,333 |
| Administrative expenses | 3,600 | 3,600 |
| Community Service, Improvements | 1,500 | 3,600 |
| Sales & Marketing | 12,400 | 68,400 |
| Misc. | 4,500 | 6,000 |
| Operating Cash Flow | (98,270) | 241,608 |
| Investments | 113,000 | |
| Working Capital | 155,000 | |
| Ending Cash Flow | 56,730 | 298,338 |
Please do not hesitate to contact us to make an order for a cannabis business plan or a cannabis industry research. We will create complete and professional business plans, including pro forma financials and projections to help you know how much money it’ll cost to start your business and how much money you can make by starting and operating your 100% legally compliant medical and recreational marijuana business.