It's the CLUBS not the GROWERS!!!

whodare · Mar 9, 2011

only thing is clubs arent producing, they are middle men. traditionally middlemen usually dont make as much or more than the supplier though... and with the volume they move im sure they could lower prices to the consumer increase business and still see a healthy margin, somewhere around 5 percent is nice for retail...

BiG H3rB Tr3E · Mar 9, 2011

whodare said:
only thing is clubs arent producing, they are middle men. traditionally middlemen usually dont make as much or more than the supplier though... and with the volume they move im sure they could lower prices to the consumer increase business and still see a healthy margin, somewhere around 5 percent is nice for retail...

I know you don't mean FIVE percent.....

whodare · Mar 9, 2011

mark up might be fifty, but in the real world retail,net profit is around 5 percent...

don't believe me look it up... thats why the name of the game in most business is volume...

:ying:

SacredTHCRitual · Mar 9, 2011

whodare said:
mark up might be fifty, but in the real world retail,net profit is around 5 percent...

don't believe me look it up... thats why the name of the game in most business is volume...

so true

im not here to point the finger, shaming the clubs for making a profit..no they are just taking advantage of the situation business smart wise. That's fine.

im just pointing out a business gap that will eventually be closed and capitalized on..

BiG H3rB Tr3E · Mar 9, 2011

I think some of you don't realize how much it costs to start and maintain a respectable dispensary.... Like I said, if there's so much easy money in it why don't you guys start your own spot, undercut everyone with your projected retail prices and take over the game ?

whodare · Mar 9, 2011

in the process

mrktwiz · Mar 9, 2011

Well the game changer is coming for Cali dispensaries, you can see it in the wind. San Jose, Oakland, L.A. are all looking at ADDITIONAL taxes to be placed on Medical MJ Dispensaries. Some have said it will kill their business, although I doubt that. I think it will only mean more pressure on vendors to lower their prices even more and raise prices to the end user. I think many more municipalities will look at MJ as a ongoing and growing revenue enhancer in these tough economic times, and I believe it might not be only in California either.

I've given up on distributing in Cali. anymore I only help my patient/clients and close friends, the rest doesn't see California anymore.

My two cents....

Yes4Prop215 · Mar 9, 2011

if clubs are only offering you 1600 you must have some garbage...sorry....only shit going for 1600 right now is midgrade outdoors...clubs still offer me 3200 for my OG kush and thats in San Francisco/Oakland flood central where most indoor packs dont get more than 25 per...

BiG H3rB Tr3E · Mar 9, 2011

whodare said:
in the process

What youll realize is either two things:

a) people will come in and buy up all your product and turn around and resale it on the street and youll run out of meds faster then you can secure them

or

b) that your not making enough to cover all your overhead and are forced to raise your prices

best luck in your endeavor. cant wait to see where you end up...

whodare · Mar 9, 2011

say i lock down 1 gpw...

if electrical is 10 cents a Kwh (which is high for heavy use commercial) then in a 2 month flower cycle of 12/12 i use 60 12 hour days bringing my total electrical usage to 720 Kwh call it a 1000 to make up for ac pumps fans whatev...

so per 1K lamp i produce 2.2 pounds for 100 dollars.

could easily get away with hundred dollar oz's or less...

only problem is if the gov attaches a by weight tax... ie 30 dollars an oz...

Chong_Irie · Mar 9, 2011

BiG H3rB Tr3E said:
What youll realize is either two things:

a) people will come in and buy up all your product and turn around and resale it on the street and youll run out of meds faster then you can secure them

or

b) that your not making enough to cover all your overhead and are forced to raise your prices

best luck in your endeavor. cant wait to see where you end up...

The ppl *I've met* in the dispensary biz figured out that one a while back...Only give a price break of 40-50 on the oz. Also the ppl *I've met* are making a decent living from it. I dont know how much but they aren't barely getting by....

BiG H3rB Tr3E · Mar 9, 2011

whodare said:
say i lock down 1 gpw...

if electrical is 10 cents a Kwh (which is high for heavy use commercial) then in a 2 month flower cycle of 12/12 i use 60 12 hour days bringing my total electrical usage to 720 Kwh call it a 1000 to make up for ac pumps fans whatev...

so per 1K lamp i produce 2.2 pounds for 100 dollars.

could easily get away with hundred dollar oz's or less...

only problem is if the gov attaches a by weight tax... ie 30 dollars an oz...

well im not sure where you live. but #s add up really quick. first off your just factoring electric use of lights. not fans, pumps, a/c, co2 gens, blowers, cloners, nutes etc.etc.etc.

then your looking at paying for rent on a warehouse as well as a retail property as well as your residency. and you got bills at all those places. then your going to have to get a lawyer on retainer, your going to need to pay advertising cost, employees, taxes, licensing fees, furniture, all the equipment for your grow, pos systems, safes, security guards and cameras, etc. etc. etc i mean i can go on for days, but fact is once you realize its going to cost you at the bare minimum $50-100k to JUST get started, I really doubt we will see your ounces retailing for $100 or less. and if you do decide to get prices THAT low, your going to get everyone coming to clear out your product and resale it at higher prices.

but like i said. best learning comes from experience. cant learn to swim without getting your feet wet...

now obviously im not saying that there is no money in it, im just saying its not the easy instant gold mine that so many people portray it as...

Yes4Prop215 · Mar 9, 2011

i dont know a single club selling their top shelf for less than 280 an OZ....shit most clubs are selling midgrade for 300 an OZ if you wanna buy bulk....i remember going to Harborside to buy an OZ of blue dream for a friend, they wanted 392 dollars plus tax. i just about laughed myself to death and had to decline...paying 400 an OZ in california is some sucker shit, but they gotta do that to make sure that no one buys in bulk so they can peice out every single gram...

harborside needs to make alot of cash however, because they have a ton of taxes/fees and need to reinvest alot of their cash into litigation and donations to the local government...

if i had a club i would be spending a ton of money on redeveloping the local neighborhood, new basketball courts, new jungle gyms, repaving roads, etc....gotta make yourself look useful to the community in case the feds decide to push your shit in.....

Yes4Prop215 · Mar 9, 2011

you should rename this thread.."its not the MMJ industry its the damn lawyers and local governments!!!"

if they could just implement a simple 10% across the board tax things might be easier. but they want 9.75 sales tax plus 5%MMJ tax plus income tax plus a shitload of permit fees.....they are getting too greedy and all these increased fees do is drive more shit to the blackmarket....

BiG H3rB Tr3E · Mar 9, 2011

Yes4Prop215 said:
if i had a club i would be spending a ton of money on redeveloping the local neighborhood, new basketball courts, new jungle gyms, repaving roads, etc....gotta make yourself look useful to the community in case the feds decide to push your shit in.....

^^^correctamundo my friend

funding local little league teams, food for the homeless, toys for tots, sending care packages to military, coats for the cold, etc. etc.

you have to show that your a benefit to the community not a detriment to society

whodare · Mar 9, 2011

well im not sure where you live. but #s add up really quick. first off your just factoring electric use of lights. not fans, pumps, a/c, co2 gens, etc.etc.

hmm i think i did, im not in cali though so it is slightly different

if electrical is 10 cents a Kwh (which is high for heavy use commercial) then in a 2 month flower cycle of 12/12 i use 60 12 hour days bringing my total electrical usage to 720 Kwh call it a 1000 to make up for ac pumps fans whatev...

then your looking at paying for rent on a warehouse

yea 3-4 grand a month for enough space to grow thousands of pounds a year

$50-100k to JUST get started

thats average to start a small biz, if not under-average...

I really doubt we will see your ounces retailing for $100 or less. and if you do decide to get prices THAT low, your going to get everyone coming to clear out your product and resale it at higher prices

not likely to be under a hundo unless i turn into weedmart, 150 is safe. and yea selling out is the point, but see the people buying it are the end consumer so its not like they can buy oz's and oz's at once...

:ying:

whodare · Mar 9, 2011

normal companies dont see a paper profit for five years... i bet you that you couldnt find a commercial grow that took more than a year or two before they saw profit

Phillthy · Mar 9, 2011

bobblehead said:
Thundurkel come to Michigan bro... I get at least $4k a lb for my product... The lowest med quality buds go for is $3500 from what I've heard... Living expenses should be cheaper here too... so really, you're banking even more...

most of the spots east of the mississippi are paying a minimum of $3500 for medical. you cant blame the dispensaries if there are 'growers' willing to let it go that cheap. those with the product should always name the price.

Yes4Prop215 · Mar 9, 2011

whodare said:
normal companies dont see a paper profit for five years... i bet you that you couldnt find a commercial grow that took more than a year or two before they saw profit

yea thats true...the profit margins on the MMJ scene are ridiculous. im getting into the vino business and we are spending almost 400k just to make 60k a year in gross profit.....we have a gross revenue of around 160k off 30 acres worth of grapes, but our costs are around 100k......pretty fucking weak!!!

compared to weed...where i can spend 20-30k to set up a 1-2 acre outdoor plot and rake in a half million dollars.....

im trying to convince my investing partners to throw a few 200 gallons in between the vineyard rows...but they are all legal eagle pussies scared of the feds....but they already gave me the greenlight in case of federal legaliztion, we are turning all 30 acres into a marijuana farm..

BiG H3rB Tr3E · Mar 9, 2011

yeah im in CA (for now..), where EVERYTHING is much much more expensive (except the weed) then the rest of the country. 3-4k for a warehouse really wont get you much since most people want 75-90 per foot (sometimes cheaper depending what area of CA). and if they know your doing anything mmj related that price goes up real quick...dont get me started on price of electricity........

It's the CLUBS not the GROWERS!!!

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