In 2009, the Green Rush ushered in a whole new crop of get-rich-quick schemers to California and Colorado to make money growing marijuana.
Everyone was going to fill their garages with a couple lights and clones and become millionaires; unfortunately, it didn’t quite work out that way. The California Gold Rush expanded today’s major cities in Northern California and made a handful of people a lot of money — but very few of those people actually make money growing marijuana,
The wealthiest man in San Francisco at the time, Samuel Brannan, was a pioneering Mormon who counted Brigham Young among his influential friends. Brannan made his wealth selling equipment and newspapers to miners from Sacramento to the coastal boomtown of San Francisco. Brannan became the key distributor of goods and information to gold seekers earning himself the title of “California’s first millionaire.”
And boy does history repeat itself! Entrepreneurs from all over the country have flocked to California to get rich quick. The problem is, not so many of them are getting rich, and the ones that are aren’t doing it quickly.
Marijuana is an agricultural crop subject to market pricing. Prices per pound for marijuana are dictated by what the market will bear, otherwise known as supply and demand. The price of cannabis is set based on who wants it, how much there is of it and what people are willing to pay to get it. If the supply is low and demand is high, prices are high. There is always a demand for marijuana, but the price per pound, however, has been artificially inflated due to prohibition.
The amount of risk involved in producing marijuana (anything from a slap on the wrist to life in prison, depending on region and judicial system) scared many people from growing marijuana than probably would have liked to. This risk created a condition of artificial scarcity in the market, keeping the price high.
As laws have progressed, the risk has dwindled somewhat, causing the supply to surge and prices to drop. More people decided to grow marijuana, flooding the market and causing saturation. Some parts of the California market are so saturated that unless you are selling grade-A flower you can’t give it away.
The benefits of market saturation fall on the side of the consumer or the patient. More growers means a greater selection at a lower price.
But, unlike agricultural crops such as corn and soybeans, marijuana is not subsidized by the government so if the yield isn’t good, the grower could go completely bust. Corn farmers are paid for their crops by American tax dollars regardless of the yield so that they will continue growing corn every year. When the marijuana grower gets a pest infestation or weather-damage there is no bailout, she can be out her entire investment and indebted by the poor yield.
Tips to Make Money Growing Marijuana
Here are a few gardening and planning tips to consider when planning your grow, tips to make money growing marijuana – and remember The Seven P’s: Prior Proper Planning Prevents Piss Poor Performance!
Manage Expectations and Set Your Goals
Why are you growing marijuana anyway? If it’s to get rich quick know this, you will not become a millionaire or even a thousandaire off your first crop unless you have purchased land, gotten government contracts and hired professionals to do the job for you. Before you plant your first seed or clone, have a clear non-financial goal in mind. Are you growing for personal use and attempting to subsidize your grow through sales or are you growing for wholesale to a dispensary?
If you don’t have the money to invest in all of the above you have to start small, at a pace that is comfortable for you. Remember, it is better to produce a small quantity of good marijuana than a large quantity of bad marijuana. Bad marijuana only sells on the black market, and there is no integrity in that.
If you are growing for personal use you may want to consider a small greenhouse or 1-2 light indoor garden. Estimate a yield of one pound per light. If you are growing for wholesale at a dispensary base your yield on how much money you would like to take home in net profit and work backwards, do you have enough money to invest up front to finance your garden?
Calculate Your Overhead
What will you need to start your grow? Depending on the size and scope you will need the following:
Equipment (Fixed Costs)
- Growing space (this may include work to the space)
- Ventilation system
- Lights and proper electrical supply
- Pots and liners
- Soil or hydroponic medium
- pH, EC/PPM meters, thermostat
- Water storage/access (varies by growing style)
- Nutrients and fertilizers (vary by growing style)
- Heating or cooling (dependant on garden location and temperature)
- Trimming scissors or trim machine(s)
- Space and storage for drying and curing
- Proper storage for finished product
Price: Prices could run anywhere from hundreds to hundreds of thousands depending on the size and scope of your grow. After determining the proper garden size you may find enclosed tent kits or a scaled down grow may be more appropriate.
Maintenance (Variable Costs)
- Staff and/or personal time
Price: These costs will fluctuate by the size and scope of your garden. Find out in advance how much your electricity bill will be to run your lights by looking at the website for your utility company. Depending on your region, you may be charged for “peak” usage (the price goes up when more people use electricity.) Also know in advance if you will need to employ some friends to help grow or process the crop, a price or trade needs to be negotiated up front and understood clearly by all parties to ensure everyone is happy and there are no problems with the law.
Add up all those fixed and variable costs, how much cannabis do you have to sell at your local market rate to break even? How about to make an actual profit? If you are selling to a dispensary at wholesale, knowing the required investment and how much you have to lose may lead you to a scaled down first grow.
Grow Good Weed
Marijuana earned the nickname “weed” because it grows vigorously under a variety of conditions. Anyone can grow weed, but only a few can grow top-shelf marijuana and make a profit doing it. Just like during the Gold Rush, the real profits are often in distribution, equipment and information.
Start small, pay attention to your plants. Take notes; monitor your plant’s reactions to the conditions you create. Make sure to do your homework, I recommend Ed Rosenthal’s “Marijuana Grower’s Handbook” for a complete understanding of the optimum conditions for your plant and how to create them.
Make sure you keep your garden pest free — don’t let your dog run through it and change your clothes before entering and exiting to prevent infestations. Pay close attention to your plants so you can nip pest problems in the bud before they destroy your entire crop.
Don’t use pesticides and grow organic. Most dispensaries in legal states use independent labs to test cannabis for pesticides, molds and THC content. They will not buy your dirty buds, so keep your garden clean. Don’t unleash bad product onto the black market, many patients still rely on underground sales for medicine.
Just like any business, one with a good foundation for upward mobility starts small and yields small in the beginning. If you are growing to get rich quick, your odds are better playing the lottery. If you are looking to subsidize your personal use or start a small business, start small, grow within your means and remember The Seven P’s: Prior Proper Planning Prevents Piss Poor Performance. Over time, if you do it right, you can create a steady source of income or save yourself thousands a year in black market purchases.
Originally published in the print edition of Cannabis Now. LEARN MORE.
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