I found an article with one question – “Can growing marijuana be profitable?” It is a strange question – any business can.

However as Antoine de Saint-Exupéry said: “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

How Much Does it Cost to Grow Cannabis Indoor?

Indoor cultivators produce year-round and can generate between 4 and 6 harvests per year.

Please do not hesitate to contact us to make an order for a cannabis business plan or a cannabis industry research. We 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.

Related Post

Pin It on Pinterest

Share This