The legal medical and recreational marijuana markets continue to flourish and have become one of the most profitable industries in recent years. With more and more areas legalizing marijuana, now’s the perfect time to jump in.
Below we’ll show you the ballpark costs to grow legal marijuana for the different types of setups you may encounter. These are great starting figures, but if you want to know how much it’ll cost you – down to the penny – the only way to do this is by creating a detailed, professional marijuana cultivation business plan.
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Ballpark Costs for Growing Marijuana
The average cost to grow marijuana in the United States is around $42 per square foot – but that is the average cost that includes both indoor and outdoor marijuana cultivation.
To break it down further, the average cost of growing marijuana indoors is around $75 per square foot.
In growing marijuana outdoors, the average cost is around $10-$17 per square foot, while greenhouse and combination grows cost an average of $50 per square foot.
Below are the additional items that affect the costs of growing marijuana.
Commercial cultivation is a lot different than growing a few plants in your backyard or basement. If you plan to grow marijuana for the masses, you’ll have to think on a larger scale. This means you should be looking into warehouses for indoor cultivation or large plots of land for outdoor.
Starting an indoor grow is the most expensive option. The costs for an indoor growing location varies wildly per location, so there’s no easy way to break down these costs. We’ve seen prices be as low as $2.00 per square foot all the way up to $20-$100 per square foot for premium locations.
As for outdoor grow operations, you can lower the startup and operational costs since you do not have to spend much on HVAC systems and lighting. For outdoor locations, land averages $10 to $17 per square foot, although in some locations the cost can be significantly higher.
These are tough to nail down because some greenhouse spaces come built out already, or you’re just renting a plot of land and putting a greenhouse on it. So assume the raw cost of the space will be similar to outdoor, plus the cost of the size of your greenhouse.
The average price of a 2400W LED grow light, which covers 6×6.5ft, will range anywhere from $250-$350, while a 400W that covers 2x2ft costs around $200. To maximize production, cultivators typically use a ratio of one plant for every 250W of growing light. So use that as a loose calculation for figuring out your lighting costs.
Temperature Control and Ventilation
Plants need a specific atmosphere to grow big and strong, including an ideal temperature and humidity range, air circulation, and CO2. To create this kind of environment for your plants, you’ll have to buy fans, dehumidifiers, and CO2 devices.
Fan and blower costs range anywhere from $100 to $1,500 per unit. The number of fans and blowers required will be dependent on the size of your facility. The cost of commercial dehumidifiers is anywhere from $1,000 to $11,500 and they are sized according to how many pints they can remove in a day.
The cost of CO2 burners, tanks, and regulator kits may range from over $600 up to $2,000.
Seeds or Clones
Aside from the costs mentioned above, you’ll also need to pay for seeds or clones. Depending on the variety, seeds cost anywhere from $10 and $20 and the cost of clones ranges anywhere from $10-$30. Rare, high-quality clones can easily get into the hundreds, though.
Whether you grow in soil or set up a hydroponic system, you need to determine the best medium for your purposes. Prices heavily depend on your cultivation plan.
If using soil, a 10-gallon smart pot requires 1.34 cubic feet of soil. A 1.5 cu ft. bag of Roots Organic Soil costs $15. So, if you’ll grow 100 plants in 10-gallon pots, you need to allocate a budget of at least $1,500 for soil, and around $10 per 10-gallon smart pot.
The cost is contingent on the type of hydroponic system and the size of the growing area. It’s best to do further research before going too deep as costs could range from $1,000 for a small in-home system, to $100,000 for an indoor farm set up.
Although the cost of nutrients depends on your cultivation plan, you can expect to spend a minimum of $1,000 or more on nutrients for each harvest.
The cost of electricity for indoor growing, as well as the costs of water for indoor or outdoor marijuana cultivation, can be extremely high – one of the largest expenses for most cultivation facilities, in fact. These figures are entirely dependent on the local utility costs of where your facility will be located. This is why creating a marijuana cultivation business plan that’s created specifically for your business and location becomes really important since there is no average cost here.
Licensing & Legal
New cultivators often forget about the licensing and legal costs for starting their marijuana growing facility. So you absolutely need to include this in your budget projections. These costs vary wildly depending on your location, so you’ve really got to know and understand the local laws and regulations for your region. For example, in Colorado, a marijuana cultivation license costs are $4,000, while in California, the annual fees for a “medium indoor” grow average $78,000.
Sample Commercial Growing Facility Costs Breakdown
The cost of setting up a growing facility relies on different factors like the size of your grow space, the medium, and lots of other details. That’s why putting together a cultivation business plan is so important to do in the early stages, as you could be completely off in your estimates and find yourself scrambling to raise more money when you could have avoided this issue altogether.
Below is a sample startup cost breakdown of 7,700-square-foot warehouse grow for 1,000 plants, with an estimated yield of 350 lbs. with 4 harvests a year:
- Warehouse rent: $50,000
Build-out and improvements: $60,000
Growing equipment: $150,000
Security and alarm system: $45,000
Legal fees and licensing: $55,000
Direct costs before profit: $200,000
Administrative expenses: $50,000
Additional expenses, including salaries: $100,000
As you can see, the costs of starting a medical or recreational marijuana cultivation business can be quite large and can also get out of hand if you aren’t diligent about everything required to get this going. We hope this article was helpful.
If you’re serious about starting a marijuana growing business, but don’t know where to go from here, grab a Starter Package so you can see everything you need to know and do, including all these costs, to make this business a reality.