Cannabis Grow Room Pros and Cons

Pros:

  • A warehouse environment provides with maximum control, and therefore the most reliable consistent cannabis crops can be produced in a properly designed warehouse grow room. Indoor cultivators produce year-round and can generate between 1 and 12 harvests per year.
  • There are various irrigation systems for growing cannabis appropriate for growing in a warehouse: including drip irrigation, hydroponic flood benches, or trough benches. The irrigation system can be designed in conjunction with a nutrient management system for maximizing the production yield of the cannabis plants.
  •  The environmental computer control systems for a cannabis warehouse control and monitor all the nutrients, lights, air circulation, and irrigation needs of the plants.

Cons:

  • Without natural light, warehouse grow rooms depend on intelligent grow lights which need to replicate the parts of the sunlight spectrum that the cannabis plants need at each stage of growth. Lighting is a key component in an integrated system.
  • Air filtration and circulation systems are essential for controlling heat buildup and eliminating exhaust odors. It is critical that the air circulation in a marijuana warehouse is designed in conjunction with the grow lights because lighting systems emit large amounts of heat.
  • De-humidification is required to optimize growing environment.

Cannabis Grow Room Setup Costs

The median average cost to setup a commercial cannabis grow room can be around $75-$100 per square foot. For our example, we are considering a warehouse with an area of 7,700 sq. ft, holding approximately 1,000 plants with an estimated yield of 350 lbs. and 4 harvests per year. The setup costs are the following:

  • Warehouse rent – $50,000
  • Build out, improvements – $60,000
  • Growing equipment – $110,000
  • Lighting system – $150,000
  • Alarm & Security System – $40,000
  • Licensing & legal fees – $50,000
  • Direct costs (first months before profit) – $160,000
  • Administrative expenses – $50,000
  • Other expenses, incl. salaries – $100,000

Total = $770,000 or $100 per sq. ft.

Cannabis Grow Room Operating Costs

Grow room costs include electricity, water, clones/seeds, labor and packaging, lab testing and transportation, other direct costs, as well as indirect operating costs such as administrative, marketing, distribution, taxes, interest and other expenses that vary depending on the location.

Good lights are one of the most important factors when growing cannabis indoors. You can achieve yields of around 1.1 to 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 – 4-5 employees, $55,550

Thus, the direct cost of growing cannabis would be approximately $131,250, or $375 per pound (about 30% of the wholesale price).

Cannabis Grow Room Profit

Typically, the average cannabis grow room profit can reach 20-25% of sales. For our scenario, we estimated sales at 1,400 lbs. per year with:

  • Revenue + $1,750,000
  • Direct costs – $525,000 (30%)
  • Gross Profit = $1,225,000 (70%)
  • SG&A Expenses = $350,000 (20%)
  • Operating Income (EBITDA) = $875,000 (50%)

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Cannabis Grow Room Calculator

Calculate grow room costs and profits with our pre-populated cannabis cultivation financial model. All you have to do to get started is enter the size of your grow room or rooms. The model will help you estimate how much it costs to start and operate your own cannabis growing business, build all revenue and cost line-items monthly over a flexible seven year period, and then total the monthly results into quarters and years for an easy view into the various time periods.

Cannabis Cultivation Financial Model Sample (New Jersey)

cannabis cultivation financial model

Cannabis Indoor Grow Room FAQs

What is an indoor grow room?

A grow room is simply a space where plants are grown under controlled conditions. Facilities may vary in size, design and production capacity depending on requirements. For some states, growing indoors is the only legal option, while others are trying to produce more crops per year or don’t have the ability to grow outdoors.

What is the average yield of an indoor grow?

On average, indoor growers can expect a yield of 0.35 lbs. or 6 ounces per plant / 1.1 gram per watt of light / 45.5 pounds per 1,000 sq. ft.

How much does it cost to produce a pound of weed?

The median average cost to grow a pound of dried cannabis flower in a warehouse/indoors can be around $500-$1,000. 

'70% ready to go' business plan templates

We also offer Word document and PowerPoint pitch deck templates for your cannabis growing business.

Should you have any questions, please do not hesitate to contact us


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