How low can cannabis go?
In 1971 Brown University reported the cost of Cannabis was as low as $8 an ounce. The same year Harvard University boasted $25 “high grade” ounces of Cannabis from Vietnam and $20 for a gram of hash oil. Of course the average THC percentage in 1971 was about 1.5%, compare that to the average THC percentage today of about 14%. It really begs the question, how low can cannabis go?
Today’s average bag of schwag will cost you about $103 an ounce, your average high grade medical Cannabis will gouge you for about $291 an ounce. Not to forget you will likely pay upwards of $55 for a gram of hash oil. Considering the minimum wage 40 years ago was under $3 an hour and today is under $8. One must wonder why Cannabis has undergone a massive 3,700% increase in the past 40 years when minimum wage has not even increased by 250%.
Even the commodity with the largest increase, crude oil. Has only increased about 315% in the past 40 years. None of these numbers make sense and beg again the question, how low can cannabis go?
The answer to the big question lies in the methods and costs of the grower. Currently the average dispensary is forking over a hefty $10,000 – $21,500 or more a month on electricity to grow medical Cannabis. That’s not considering the average up front cost of about $160,000 to build out a grow site and dispensary. Tacked on is the thousands of gallons of water, nutrients, mediums, salaries, taxes, legal and more fees that can easily exceed $150,000 a month.
All this leads up to what does it cost to grow Cannabis and how low can Cannabis go?
Let’s start with an moderately efficient 10,000 sq. ft. hydroponic grow facility that is air conditioned, and lit up with 22, 1,000 watt lamps with an average grow/utility bill(s) of $17,000 a month. In this grow room we can grow dozens of plants and get an average yield (if we are moderately skilled) of 22,000 grams or 49.1 pounds. At an average retail cost of $40 an eighth, we are looking at a return of $251,428 on our crop.
Using a perpetual cycle we will harvest about every two months giving us a per gram growing cost of about $1.54 per gram. Of course we would have to tack on salaries, taxes, legal, overhead and other costs associated with running a dispensary to get our final true per gram cost to the dispensary owner.
However these averages are based on mainstream growing techniques and do not take into consideration using advanced methods like:
- Lighted greenhouses
- LED lights
- Solar panels
- Recycled water
- Subterranean sites
- Decomposition CO2
- Outdoor soil growing
- And more
One would hope with the industry opening up for the first time since 1937. That we will start to see more research and development into methods and locations for Cannabis cultivation.
Reviewing the numbers and thinking about the advanced growing methods. Really makes you wonder, how low can cannabis go?