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How much do dispensary owners make? How to find figures

EasyGoing

Member
Hello everybody. As the title says, I am interested in finding how much dispensary owners make. I would also love any facts or statistics that go along with it.

For example, Population size and how many user from said population use cannabis, and how often and how much.

Some way to calculate potential profits for a dispensary in California. Thank you. :tiphat:
 

soil margin

Active member
Veteran
Start off with how much the average customer spends, say $60.

Then figure out how many customers on average per day, say 200.

$12,000 avg a day. Multiply that by how many days you're open every year, say 350 days. So you're grossing $4.2 mil a year.

Then take your expenses, salary, rent, taxes, product, fees, security, etc. Say that's $120k a month, $1.44 mil a year. Your net pre-tax profit for the year is $2.76 million. Then obviously if you receive that money as the dispensary owner you are going to pay income taxes on it, 35% or whatever. So at the end of the year you've got $1.8 million that you have in your pocket.
 

MrBungle

Active member
Its a cash business.... no one is gonna tell you exactly how much they make... above is a pretty decent guesstimate, I'm sure uncle sam's cut of 35% is from the amount they can track... the rest is stuffed in ol grandmammy's mattress :D
 

EasyGoing

Member
Start off with how much the average customer spends, say $60.

Then figure out how many customers on average per day, say 200.

$12,000 avg a day. Multiply that by how many days you're open every year, say 350 days. So you're grossing $4.2 mil a year.

Then take your expenses, salary, rent, taxes, product, fees, security, etc. Say that's $120k a month, $1.44 mil a year. Your net pre-tax profit for the year is $2.76 million. Then obviously if you receive that money as the dispensary owner you are going to pay income taxes on it, 35% or whatever. So at the end of the year you've got $1.8 million that you have in your pocket.

How did you come up with those average costs? Average customers per day?
 

EasyGoing

Member
Its a cash business.... no one is gonna tell you exactly how much they make... above is a pretty decent guesstimate, I'm sure uncle sam's cut of 35% is from the amount they can track... the rest is stuffed in ol grandmammy's mattress :D

Makes a commercial dispensary proposal hard to write up. The range of answers I have researched is quite different than the actual dispensary owners I know. :thank you:
 

soil margin

Active member
Veteran
How did you come up with those average costs? Average customers per day?

Yeah just a rough estimate based on what I've seen working with a couple dispensary owners and how much business I've seen other dispensaries getting. Those costs could probably easily vary by 30-40% though based on things like the real estate location and how much you're paying for product.
 

Chunkypigs

passing the gas
Veteran
until this year all prop 215 compliant cali mmj dispos were non profits.
you can get some ideas on owners salaries from the years of court battles between the owners of Berkeley Patients Group from 8-10 years ago.

here's a couple articles that quotes the clubs numbers, they were the biggest club in cali in '09.

http://www.berkeleyside.com/2012/06/20/report-berkeley-patients-group-earned-15-million-in-2009


Report: Berkeley Patients Group earned $15m in 2009
Share on FacebookTweet about this on TwitterEmail this to someonePrint this page
By Frances DinkelspielJune 20, 2012, 10:30 a.m.
As Berkeley Patients Group prepared to shut its doors on May 1, it advertised a delivery service behind the front desk. Photo: Frances Dinkelspiel

Berkeley Patients Group took in $15 million and paid its top executives $911,000 in 2009, while only donating $18,083 to charities, according to a story released Wednesday by California Watch.

Etienne Fontan earned $357,529, Tim Schick earned $290,765, and Debby Goldsberry earned $263,299 in 2009, part of $3.3 million spent on labor costs, according to story. The medical cannabis dispensary, which operated at 2747 San Pablo Avenue until May, when the federal government forced it to close, spent $151,789 on security in 2009 and distributed $253,433 to marijuana advocacy organizations, according to California Watch. It made about a 40% profit on its products.

BPG officials had told the Oakland Tribune in 2009 that it donated about $300,000 a year to charities.

The California Watch story is the most revealing disclosure ever of the finances of what has long been regarded as Berkeley’s most established dispensary. Since BPG is a private, not-for-profit company, it is not required to reveal its finances, although it must pay taxes to both the state and Berkeley.

The city levies a 2.5% tax on sales of cannabis, which means BPG would have had to pay $375,000 in taxes to Berkeley in 2009 if Measure T had been in place. Voters adopted the tax on cannabis sales in 2010 and the city has estimated it will get about $150,000 a year from the city’s three dispensaries.

In 2010, a lawsuit filed by Berkeley Patients Group against one of its former employees, Rebecca DeKeuster, also revealed details about the profits of medical cannabis dispensaries. BPG had sent DeKeuster to Maine to apply for the license to open four dispensaries, but DeKeuster soon quit and went out on her own.

Papers filed with the lawsuit revealed that the Northeast Patients Group, which would have been affiliated with Berkeley Patients Group, expected to gross more than $2 million serving 691 patients at its four dispensaries in the first year, selling medical cannabis for $340 an ounce. It projected gross revenues of almost $7.4 million in its second year of operation, serving 1,159 patients. That worked out to revenues of $5,500 to $7,500 per patient, depending on the location.

Berkeley Patients Group was the largest medical cannabis dispensary in Berkeley and one of the largest in the East Bay with 13,000 members. In addition to providing a wide array of medical cannabis and plants, it provided free massages, yoga classes, and other types of services to its members. The dispensary shut down after its landlord David Mayeri received a letter from the federal government threatening to seize the property since it was located within 1,000 feet of a school. Since it shut its physical plant, Berkeley Patients Group has been running a delivery service.

Officials from BPG say they are close to finding a new location for the operation.

In February 2011, the state Board of Equalization slapped Berkeley Patients Group with a bill for $6.2 million in back taxes and penalties. The dispensary has been paying off its debt slowly.

Officials from BPG declined to talk to reporters from California Watch.

However, a Los Angeles lawyer quoted in the California Watch article said the finances of Berkeley Patients Group did not seem out of line.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

https://www.sandiegouniontribune.com/news/watchdog/sdut-finances-of-prominent-california-pot-club-revealed-2012jun20-htmlstory.html
At the peak of California’s pot boom in 2009, one of the state’s largest medical marijuana dispensaries recorded more than $15 million in sales to thousands of customers for popular strains like Grand Daddy Purple, OG Kush and Blue Dream. What it didn’t record was much profit.

During the same period the dispensary - Berkeley Patients Group - registered more than $100,000 in “net income.” So where did all the money go? Until now, it’s been hard to know, because Berkeley Patients Group, like other California dispensaries, keeps a tight lock on its internal finances.

(SCROLL DOWN FOR PHOTOS)

But according to company accounting documents and emails obtained by California Watch, much of Berkeley Patients Group’s income from lucrative pot sales went to growers, staff salaries that included nearly $1 million for top executives, advertising, security, accountants and attorneys and a host of other operating expenses. Smaller expenditures included $39,916 on “decorations and ambiance” and $2,481 for softball.

The documents, which were reviewed by accounting experts, shed light on the private world of California’s medical marijuana industry, which has been the focus of a major crackdown by federal prosecutors who allege many operations are actually fronts for drug traffickers. Medical marijuana advocates and some state lawmakers have criticized the federal enforcement actions, saying prosecutors have targeted legitimate enterprises that are operating in compliance with state law, which allows “qualified patients” and their “designated primary caregivers” to grow marijuana “collectively or cooperatively.”

Berkeley Patients Group’s owners declined to be interviewed for this story.

On its website, the group bills itself a “medical cannabis collective.” It also has a permit issued by Berkeley authorities.

In May, the group abruptly closed its storefront operation on San Pablo Avenue in Berkeley after federal prosecutors threatened to seize the property from the landlord, David Mayeri. In a letter to Mayeri, U.S. Attorney Melinda Haag cited violations of federal law and the dispensary’s proximity to two schools. Haag did not explicitly accuse Berkeley Patients Group of acting as a front for drug traffickers, and no criminal charges have been filed in the case.

Earlier this month, the group announced it had launched a medical marijuana delivery service, but it’s unclear whether it will resume storefront sales in Berkeley.

Delivering medical marijuana to customers’ homes instead of selling it from a storefront could decrease federal pressure on Berkeley Patients Group. However, the group will likely face a significant drop in sales volume that will affect its large operating budget, designed to handle more than 10,000 members a month, according to interviews with former staff and industry experts.

Two of the best years for Berkeley Patients Group were 2008 and 2009, when it recorded $17.4 million and $16.4 million, respectively, in total income from the distribution of marijuana buds, edible products infused with pot, as well as seeds, clones and other items (company discounts reduced the actual figures by $1.1 million in 2008 and $1.3 million in 2009). According to company documents, the cost for goods sold was about $10 million in 2008 and $9 million in 2009, leaving a gross profit margin close to 40 percent.

The biggest portion of the group’s operating expenses went to labor costs, which totaled $3.3 million in 2009, including more than $911,00 paid to co-directors Deborah Goldsberry, Etienne Fontan and Tim Schick.

Berkeley Patients Group’s former bookkeeper, Doug McVay, said salaries for top executives were increased by as much as 50 percent in 2009, and total compensation figures detailed in the documents reflected generous bonuses.

“It was a lot of money,” he said, noting that salaries for other staff were also raised. “Employees were treated quite well.”

State medical marijuana laws do not require dispensary operators to disclose salaries of any employees. Executives at Berkeley Patients Group and Harborside Health Center, a large dispensary based in Oakland, have repeatedly refused to publicly reveal compensation packages or report them to local authorities.

“Because BPG is a private company, it does not disclose salaries or other sensitive financial information to the public,” Berkeley Patients Group said in a written statement earlier this year, adding that compensation levels were in line with “other medical non-profits of our size in the Bay Area.”

Allison Margolin, a Los Angeles defense attorney who has represented more than 70 dispensaries, said Berkeley Patients Group’s salaries looked fair and the books seemed to be in order.

Margolin said successful marijuana operators were justified in measuring themselves against other nonprofits of comparable size. “Executives of nonprofits can make millions of dollars - hospitals are nonprofits,” she said. “I think it’s reasonable for dispensary executives to make millions, too, considering the risk and myriad skills involved.”

In addition, she said the company’s finances could help explain why medical marijuana costs as much as $60 for an eighth of an ounce in California, which is similar to the cost on the black market. There’s the cost of inventory, plus an endless list of expenses including insurance, attorney and accountant fees and advertising.

“The truth is, if dispensaries weren’t charging market prices, they’d be out of business,” she said, adding that the constant threat of robberies and police raids raised the cost of doing business.

Berkeley Patients Group spent $151,789 for security in 2009.

One area in which the dispensary appears to fall short of its public rhetoric is in its donations to local charities. While company executives have said they contribute generously to groups ranging from local libraries and schools to the Berkeley Chamber of Commerce, internal documents show the group gave $18,083 to charity in 2009. In contrast, it distributed $253,433 to marijuana advocacy organizations.

Over the past year, Berkeley Patients Group has faced a series of legal and financial challenges. According to a 2011 state audit, the group owed $6.4 million to the California State Board of Equalization for its failure to pay sales taxes from 2004 to 2007. Company officials have said they are paying off the debt in monthly installments.

In addition, former co-owner Deborah Goldsberry filed a wrongful termination complaint last year accusing company directors of illegally funneling more than half a million dollars to finance four dispensaries in Maine. Her complaint was settled in January. A separate lawsuit over the Maine project was settled earlier this month.

o-POT01_1-570.jpg
 

EasyGoing

Member
until this year all prop 215 compliant cali mmj dispos were non profits.
you can get some ideas on owners salaries from the years of court battles between the owners of Berkeley Patients Group from 8-10 years ago.

here's a couple articles that quotes the clubs numbers, they were the biggest club in cali in '09.

https://www.berkeleyside.com/2012/06/20/report-berkeley-patients-group-earned-15-million-in-2009


Report: Berkeley Patients Group earned $15m in 2009
Share on FacebookTweet about this on TwitterEmail this to someonePrint this page
By Frances DinkelspielJune 20, 2012, 10:30 a.m.
As Berkeley Patients Group prepared to shut its doors on May 1, it advertised a delivery service behind the front desk. Photo: Frances Dinkelspiel

Berkeley Patients Group took in $15 million and paid its top executives $911,000 in 2009, while only donating $18,083 to charities, according to a story released Wednesday by California Watch.

Etienne Fontan earned $357,529, Tim Schick earned $290,765, and Debby Goldsberry earned $263,299 in 2009, part of $3.3 million spent on labor costs, according to story. The medical cannabis dispensary, which operated at 2747 San Pablo Avenue until May, when the federal government forced it to close, spent $151,789 on security in 2009 and distributed $253,433 to marijuana advocacy organizations, according to California Watch. It made about a 40% profit on its products.

BPG officials had told the Oakland Tribune in 2009 that it donated about $300,000 a year to charities.

The California Watch story is the most revealing disclosure ever of the finances of what has long been regarded as Berkeley’s most established dispensary. Since BPG is a private, not-for-profit company, it is not required to reveal its finances, although it must pay taxes to both the state and Berkeley.

The city levies a 2.5% tax on sales of cannabis, which means BPG would have had to pay $375,000 in taxes to Berkeley in 2009 if Measure T had been in place. Voters adopted the tax on cannabis sales in 2010 and the city has estimated it will get about $150,000 a year from the city’s three dispensaries.

In 2010, a lawsuit filed by Berkeley Patients Group against one of its former employees, Rebecca DeKeuster, also revealed details about the profits of medical cannabis dispensaries. BPG had sent DeKeuster to Maine to apply for the license to open four dispensaries, but DeKeuster soon quit and went out on her own.

Papers filed with the lawsuit revealed that the Northeast Patients Group, which would have been affiliated with Berkeley Patients Group, expected to gross more than $2 million serving 691 patients at its four dispensaries in the first year, selling medical cannabis for $340 an ounce. It projected gross revenues of almost $7.4 million in its second year of operation, serving 1,159 patients. That worked out to revenues of $5,500 to $7,500 per patient, depending on the location.

Berkeley Patients Group was the largest medical cannabis dispensary in Berkeley and one of the largest in the East Bay with 13,000 members. In addition to providing a wide array of medical cannabis and plants, it provided free massages, yoga classes, and other types of services to its members. The dispensary shut down after its landlord David Mayeri received a letter from the federal government threatening to seize the property since it was located within 1,000 feet of a school. Since it shut its physical plant, Berkeley Patients Group has been running a delivery service.

Officials from BPG say they are close to finding a new location for the operation.

In February 2011, the state Board of Equalization slapped Berkeley Patients Group with a bill for $6.2 million in back taxes and penalties. The dispensary has been paying off its debt slowly.

Officials from BPG declined to talk to reporters from California Watch.

However, a Los Angeles lawyer quoted in the California Watch article said the finances of Berkeley Patients Group did not seem out of line.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

https://www.sandiegouniontribune.com/news/watchdog/sdut-finances-of-prominent-california-pot-club-revealed-2012jun20-htmlstory.html
At the peak of California’s pot boom in 2009, one of the state’s largest medical marijuana dispensaries recorded more than $15 million in sales to thousands of customers for popular strains like Grand Daddy Purple, OG Kush and Blue Dream. What it didn’t record was much profit.

During the same period the dispensary - Berkeley Patients Group - registered more than $100,000 in “net income.” So where did all the money go? Until now, it’s been hard to know, because Berkeley Patients Group, like other California dispensaries, keeps a tight lock on its internal finances.

(SCROLL DOWN FOR PHOTOS)

But according to company accounting documents and emails obtained by California Watch, much of Berkeley Patients Group’s income from lucrative pot sales went to growers, staff salaries that included nearly $1 million for top executives, advertising, security, accountants and attorneys and a host of other operating expenses. Smaller expenditures included $39,916 on “decorations and ambiance” and $2,481 for softball.

The documents, which were reviewed by accounting experts, shed light on the private world of California’s medical marijuana industry, which has been the focus of a major crackdown by federal prosecutors who allege many operations are actually fronts for drug traffickers. Medical marijuana advocates and some state lawmakers have criticized the federal enforcement actions, saying prosecutors have targeted legitimate enterprises that are operating in compliance with state law, which allows “qualified patients” and their “designated primary caregivers” to grow marijuana “collectively or cooperatively.”

Berkeley Patients Group’s owners declined to be interviewed for this story.

On its website, the group bills itself a “medical cannabis collective.” It also has a permit issued by Berkeley authorities.

In May, the group abruptly closed its storefront operation on San Pablo Avenue in Berkeley after federal prosecutors threatened to seize the property from the landlord, David Mayeri. In a letter to Mayeri, U.S. Attorney Melinda Haag cited violations of federal law and the dispensary’s proximity to two schools. Haag did not explicitly accuse Berkeley Patients Group of acting as a front for drug traffickers, and no criminal charges have been filed in the case.

Earlier this month, the group announced it had launched a medical marijuana delivery service, but it’s unclear whether it will resume storefront sales in Berkeley.

Delivering medical marijuana to customers’ homes instead of selling it from a storefront could decrease federal pressure on Berkeley Patients Group. However, the group will likely face a significant drop in sales volume that will affect its large operating budget, designed to handle more than 10,000 members a month, according to interviews with former staff and industry experts.

Two of the best years for Berkeley Patients Group were 2008 and 2009, when it recorded $17.4 million and $16.4 million, respectively, in total income from the distribution of marijuana buds, edible products infused with pot, as well as seeds, clones and other items (company discounts reduced the actual figures by $1.1 million in 2008 and $1.3 million in 2009). According to company documents, the cost for goods sold was about $10 million in 2008 and $9 million in 2009, leaving a gross profit margin close to 40 percent.

The biggest portion of the group’s operating expenses went to labor costs, which totaled $3.3 million in 2009, including more than $911,00 paid to co-directors Deborah Goldsberry, Etienne Fontan and Tim Schick.

Berkeley Patients Group’s former bookkeeper, Doug McVay, said salaries for top executives were increased by as much as 50 percent in 2009, and total compensation figures detailed in the documents reflected generous bonuses.

“It was a lot of money,” he said, noting that salaries for other staff were also raised. “Employees were treated quite well.”

State medical marijuana laws do not require dispensary operators to disclose salaries of any employees. Executives at Berkeley Patients Group and Harborside Health Center, a large dispensary based in Oakland, have repeatedly refused to publicly reveal compensation packages or report them to local authorities.

“Because BPG is a private company, it does not disclose salaries or other sensitive financial information to the public,” Berkeley Patients Group said in a written statement earlier this year, adding that compensation levels were in line with “other medical non-profits of our size in the Bay Area.”

Allison Margolin, a Los Angeles defense attorney who has represented more than 70 dispensaries, said Berkeley Patients Group’s salaries looked fair and the books seemed to be in order.

Margolin said successful marijuana operators were justified in measuring themselves against other nonprofits of comparable size. “Executives of nonprofits can make millions of dollars - hospitals are nonprofits,” she said. “I think it’s reasonable for dispensary executives to make millions, too, considering the risk and myriad skills involved.”

In addition, she said the company’s finances could help explain why medical marijuana costs as much as $60 for an eighth of an ounce in California, which is similar to the cost on the black market. There’s the cost of inventory, plus an endless list of expenses including insurance, attorney and accountant fees and advertising.

“The truth is, if dispensaries weren’t charging market prices, they’d be out of business,” she said, adding that the constant threat of robberies and police raids raised the cost of doing business.

Berkeley Patients Group spent $151,789 for security in 2009.

One area in which the dispensary appears to fall short of its public rhetoric is in its donations to local charities. While company executives have said they contribute generously to groups ranging from local libraries and schools to the Berkeley Chamber of Commerce, internal documents show the group gave $18,083 to charity in 2009. In contrast, it distributed $253,433 to marijuana advocacy organizations.

Over the past year, Berkeley Patients Group has faced a series of legal and financial challenges. According to a 2011 state audit, the group owed $6.4 million to the California State Board of Equalization for its failure to pay sales taxes from 2004 to 2007. Company officials have said they are paying off the debt in monthly installments.

In addition, former co-owner Deborah Goldsberry filed a wrongful termination complaint last year accusing company directors of illegally funneling more than half a million dollars to finance four dispensaries in Maine. Her complaint was settled in January. A separate lawsuit over the Maine project was settled earlier this month.

View Image

Heck Yea! Thank you for the info!.
 

EasyGoing

Member
Yeah just a rough estimate based on what I've seen working with a couple dispensary owners and how much business I've seen other dispensaries getting. Those costs could probably easily vary by 30-40% though based on things like the real estate location and how much you're paying for product.

Thank you. I added your figures to my model. :tiphat:
 

PDX Dopesmoker

Active member
The shop I worked at in Portland a couple years ago was taking in about 3-4 grand a day when I started and about 7-8 a day when I left, 7 days a week. Inventory markup on wholesale was generally in the 200% - 300% range.
 

Douglas.Curtis

Autistic Diplomat in Training
Its a cash business.... no one is gonna tell you exactly how much they make... above is a pretty decent guesstimate, I'm sure uncle sam's cut of 35% is from the amount they can track... the rest is stuffed in ol grandmammy's mattress :D
That's drug dealers. You're confusing unregulated black market sales with the retentive "everything is tracked" dispensaries. Cute though.


The reality is changing and profits are shrinking. The price of cannabis is dropping, and will bottom out when million acre farms come online. Dispensaries will have to change to stay profitable.
 

EasyGoing

Member
That's drug dealers. You're confusing unregulated black market sales with the retentive "everything is tracked" dispensaries. Cute though.


The reality is changing and profits are shrinking. The price of cannabis is dropping, and will bottom out when million acre farms come online. Dispensaries will have to change to stay profitable.

This is what my numbers are telling me. :tiphat:
 

MrBungle

Active member
That's drug dealers. You're confusing unregulated black market sales with the retentive "everything is tracked" dispensaries. Cute though.


The reality is changing and profits are shrinking. The price of cannabis is dropping, and will bottom out when million acre farms come online. Dispensaries will have to change to stay profitable.


Yea a cash business is a cash business...... alcohol is regulated.... and tell me that bar owners are 100% on the up and up with their taxes... give me a break..... :snap out of it:
 

EasyGoing

Member
Yea a cash business is a cash business...... alcohol is regulated.... and tell me that bar owners are 100% on the up and up with their taxes... give me a break..... :snap out of it:

Bars are not required by the state to run a seed to sale or track and trace system. :thank you:
 

Zeez

---------------->
ICMag Donor
Some time after the post prohibition novelty wears off, there has to be a point where there is less stress about small local growers entering the market.
 

MrBungle

Active member
I'm sure the crooked dispensaries don't last long.... and if you would want to be successful staying on the fed/state's good side is of the utmost importance...Even with tracking systems in place.. I'm sure money still falls through the cracks.... Keep it real
 

EasyGoing

Member
I'm sure the crooked dispensaries don't last long.... and if you would want to be successful staying on the fed/state's good side is of the utmost importance...Even with tracking systems in place.. I'm sure money still falls through the cracks.... Keep it real

I deal with many dispensaries. I can say for sure, 100%, no doubt, there is product going out the back door. Brokers like to deal with dispensary owners now, the game has changed.

With that said, no better way to lose your licence than doing something dumb like skipping on taxes. If I get my dispensary, I hope I would never do anything that stupid. :biggrin:
 

MrBungle

Active member
Who dictates the pricing of cannabis in the dispensary? could an eighth sold for 50 bucks be reported as being sold for 40?

I'm not saying anything about backdoor sales.......
 
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