[Crazy Chester]

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?

[rolandomota]

The Black market will never go away especially if everyone can grow and posses and yes their will be money to be made because of the huge state population

[weedaholic721]

Yes,at first, due to demand; then it will drop down low over the following 2-3 years similar to other legal states. A pound of bud at med dispensaries retails for 1500-2000 here in Colorado(can only imagine wholesale), in many rec stores it's cheaper before taxes. There will be money to be made but the prohibition profit margins will disappear.

[FunkBomb]

First of all the black market is never going away. Look at what is going on in Colorado. Prices in California could go down but considering the additional taxes and regulations I wouldn't bet on it. This doesn't even begin to figure into things like inflation and interest rates.

-Funk

[weedaholic721]

Black markets go away when its internationally legal. Here in Colorado and everyother legal state I have been too, it's a Grey market. Bud is grown legally through med programs then sold illegally to still illegal states; mainly the east coast but also alot to Texas it seems from the news.

[greenpinky]

If it's decriminalized then it's just a open market.. great thread!.. $security,$legal,$permits,$ban king,$$$$,
+much more to think about.. just make sure ur product is A+ and don't waste $$. O ya to answer question. Ya prices will be high at first and come down threw time..hopful quickly

[DocTim420]

IMO, pricing is all about "supply and demand". Like a teeter totter, one side goes down the other goes up.

To think the "grey/black" market will disappear is foolish--people don't like to pay income taxes and "work under the table", people don't like paying sales taxes and buy out of state (Amazon) or "pay cash" (off the books sale).

If my locality does not permit cannabis cultivation, unless I move--then I will never qualify for a "state license". Think I am going to fold up and quit?

[trichrider]

i tried to figure the price/cost when Colorado was regulating.
trouble is, you don't want to figure the price of a pound because you are going to grow more than a pound.
you want to figure what it will cost to start producing multiples of that, and it ain't cheap!
electricity
water
venue
security
nutrients
media
labor
licenses
genetics/clones
pest control

all lumped in together it becomes quite an investment, not saying you don't have the scratch...but trying to figure the price for a pound before you have the price of producing that pound...well, you may be surprised.

economy of scale. your only saving grace. jmo.

...and, it has to move. meaning top notch.

good luck

[Crazy Chester]

Hi trichrider - actually I am trying to figure out the price of producing a pound (or pounds). Retail price is pretty easy to figure out from there.

[DocTim420]

YEP!

Top notch/drawer/shelf buds are usually immune (or influenced to a lessor amount) from the price fluctuations of what most people grow/buy--mediocre bud.

I say this from experience.