As the cannabis industry grows, so does the competition and the investment needed to start, and you will need a solid cannabis cultivation business plan. It is required to have 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 or use the perpetual cultivation technique. 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 360 sq. m 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
360 sq. m 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 |
How Much Does it Cost to Grow Cannabis Indoor?
Indoor cultivators produce year-round and can generate between 4 and 6 harvests per year.
You can find a cannabis cultivation business plan sample at the following link. Should you have any questions, please do not hesitate to contact us.
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