Crazy Chester
Well-known member
I'm starting this thread because I've been considering applying for one of the new California commercial licenses that will go into effect in 2018.
Since I read the new law, I've been thinking it was enacted to destroy the medical marijuana system in California. If the price is too high due to the increased cost of producing and selling it, the black market will be back in California quickly.
For instance:
1. There will be a production tax of $9.25/ ounce of flowers plus an additional 15% excise tax on retail sales of marijuana both adult-use and medical.
2. Required lab testing.
3. Transporter fees.
4. A wholesaler in between the grower/manufacturer and the dispensary.
5. Since it will be a for profit business, there will be no more collective or cooperative "reimbursement," requiring the payment of taxes.
Then, there are the usual costs of production: electrical (industrial rate is around 10.5 cents per kw/hr), water, etc.
I'm leaving out more than I'm including here. Please feel free to identify other costs in producing cannabis in California next year.
I want to figure out what the new cost of producing a pound of cannabis will be.
Perhaps first we should look at an indoor grow operation and then later, outdoor. Once we have an estimated cost of production, we can pretty easily figure out what the retail cost will be (up until now I think it's been around twice the cost of production).
Will there still be money to be made in legal cannabis in California?
Will the price of legal cannabis go up too much, bringing back a profitable but dangerous black market?
Since I read the new law, I've been thinking it was enacted to destroy the medical marijuana system in California. If the price is too high due to the increased cost of producing and selling it, the black market will be back in California quickly.
For instance:
1. There will be a production tax of $9.25/ ounce of flowers plus an additional 15% excise tax on retail sales of marijuana both adult-use and medical.
2. Required lab testing.
3. Transporter fees.
4. A wholesaler in between the grower/manufacturer and the dispensary.
5. Since it will be a for profit business, there will be no more collective or cooperative "reimbursement," requiring the payment of taxes.
Then, there are the usual costs of production: electrical (industrial rate is around 10.5 cents per kw/hr), water, etc.
I'm leaving out more than I'm including here. Please feel free to identify other costs in producing cannabis in California next year.
I want to figure out what the new cost of producing a pound of cannabis will be.
Perhaps first we should look at an indoor grow operation and then later, outdoor. Once we have an estimated cost of production, we can pretty easily figure out what the retail cost will be (up until now I think it's been around twice the cost of production).
Will there still be money to be made in legal cannabis in California?
Will the price of legal cannabis go up too much, bringing back a profitable but dangerous black market?