Actual-Cost Of Production

[Emperor Herer]

reia, and 'Scrogger my man!

Thank you both for the numbers. I wont even try to guess(!) why it is worse than pulling teeth for some people to toss a $$$ out there for shits and giggles. To many years hiding in a closet maybe.

The point being that it is fairly inexpensive to grow. Period.

This exercise is not meant to cut out the big time grower and the massive profits to be had. Just a note to those of us with half a brain and the quasi legal ok to grow our own.

I love the numbers. Makes me look hard at what I am doing ... and gives me a point to make when talking to other grumpy old men.

:

 

[Pythagllio]

Alright Herer, no one has answered your question straight up yet, so I'll take the liberty to. I spent a little while calculating all the costs for a start-up grower who plans to a)grow indoors, b)be stealthy, c)has good knowledge, and d)uses 400w lighting

(edited for bevity, post appears in its entirety above)

You need to amortize the cost of equipment over it's useful life. You can probably give the waterfarms a 20 year amortization, lamps 5 years, bulbs 1 year.

You didn't include a cost for the space to grow the crop. That's a very real expense even if it's non-cash. Yes, you only charge the grow for the space used, not you're entire rent bill unless you rent the space exclusively for growing. Even if you own it, a rent equivalent charge is needed to make the costs accurate.

No reserve was included for possible legal costs such as bail, lawyer's fees, fines, drug rehab. These costs depend very much on the area which you work. I recall interviewing a lawyer in the suburbs of Louisville KY in '05 and how he explained to me what a big shot, well connected, first class, high priced lawyer, then leans back in his chair, puffs up his chest and looks at me and says, and I charge $125 per hour. I swear I don't know how I kept a straight face, I really wanted to laugh so hard that tears should have been rolling off my face. I had moved there from the suburbs of DC and you can't even get a third rate paralegal fresh out of college billing $125. But he was right, he was expensive. I ended up hiring a killer lady lawyer who billed at $75. Also, no bail bondsmen in KY you place your 10% directly with the jurisdiction and it's returned when you show up for court, whereas in many parts of the country you kiss that 10% goodbye as a fee to the bonding agent. Everything is dirt cheap in Kentuckiana, from land to fresh produce to lawyers to housing, of course at the expense of having to live in the land of the inbred. I swear I regretted every joke I made at the expense of the noble, intelligent people of West Virginia after I met the people of Kentuckiana.

No reserve for potential and unexpected equipment failure, nor for ongoing maintenance and repairs. Also potential mitigation of pests and mold is a cost that needs to be included.

No reserve or costs included for security features such as carbon scrubbers, motion detectors, alarms, etc.

No costs accounting for administrative cost though this could be almost nil depending on you're op. That and it's also probably not a great idea to keep any detailed records.

No costs accounting for labor. The plants don't grow or trim themselves, and the grow doesn't magically get set up by itself. If you want a true accounting for costs you have to reasonably account for your labor. No, typing out posts like this or time spent browsing pothead grow forums don't count as labor and neither does the time you spend in the grow looking at the plants and grinning obscenely.

10cents a KWH is way cheap. Back in Oakland electricity can reach almost 50 cents per KWh once you use your pathetic little allowance of cheap KWh's. I know there are places where you can get it that cheap, but in my new local 18cents per KWh is the expected price after they get through adding on extra taxes, fees, and administrative cost. Are you sure you're only paying 10 cents per KWh? Also seems you've only accounted for lighting the bulbs when you have at least 10% more in electric costs for peripherals, and unless you're damn lucky living in the right climate there's going to be costs for managing temps and humidity.

You can cut your electric bill substantially by giving the plants only 6-8 hours a day of *direct* light. Of course you need to be running more than one light for this to work but honest to god all they need is 6 hours of direct light. I know most potheads suffer from the more is better syndrome, but reality is that sometimes less is more, or at least enough. But for example if you were running 2 lights side by side you would turn on the first light and have it on for 8 hours. 4 hours later you turn on the second light and let it run for 8 hours. This results in a very similar yield to running both for 12 hours, helps keep ambient temps down, and extends bulb life. A light meter is also a fantastic investment because I found out I was taking perfectly useful bulbs out of service and at $80-100 per bulb it adds up to substantial savings. Though it might increase costs for the cheapskates who let their bulbs burn for too long, and end up raising a crop or two under substandard lighting. Either way unless you have a very talented eye you can't tell just by looking, and either way costs more than doing it just right. Replace them too soon and you're spending money you don't need to on extra bulbs. Let them burn too long and you reduce your crop yield, and it doesn't take a big reduction in yield to make the new bulbs a good buy.

I don't know why you're buying seeds for subsequent crops. Until I'm ready to add a new variety it's clones, because quite frankly not only does it cost money for seeds but the plants that come from seeds can be quite hit or miss. Example, I'm ready to start a crop of Anesthesia and have 70 beans which I'll sprout, 35 expected to be male, and unless I get lucky 30 of the females would be substandard. I'll pick the best girlfriend and be growing her for years to come. I've also got some Jack Herer F6s which should produce more uniform offspring but the caveat is if I don't like the plant the entire purchase will be a waste. If I do like the F6s it's possible that I could see buying seeds for each grow, but getting the seeds in hand presents risk ranging all the way from just having them lost in the mail to having LEOs kicking in your door because they heard you ordered seeds. It doesn't happen much but it does happen, and clones obviate any risk.

No costs included for curing, but that's really minimal and again depends on your ambient temps and local humidity. But if you don't cure it right you can end up with a pile of molded buds that might not even produce oil extract that's useful.

I think I got it all. Hope this helps someone, I'm not trying to be confrontational but felt compelled to point out actual costs you're not including and that non-cash expenses are still rightfully accounted for as costs. True GAAP accounting assumes that you hire out every aspect of production and rent any space needed. If you don't have to make an expense with money it helps viability of the business but it's still an actual cost.

 

[Pythagllio]

reia, and 'Scrogger my man!

Thank you both for the numbers. I wont even try to guess(!) why it is worse than pulling teeth for some people to toss a $$$ out there for shits and giggles. To many years hiding in a closet maybe.

Actually I just don't keep track anymore. One has to document what they're doing to get an accurate accounting, it doesn't change the going price a nickle, and adds some serious risk to your operation. I just know it's a hell of a lot better for my bottom line and my state of mind.

 

[Emperor Herer]

pythagllio!

Great write. I have been making a list of all the expenses as close to GAAP as my fried feeble brain can go. You added a few more points to add in.

And what an add in too! Some expenses are just to fleeting and tenuous to add in before hand so it is nice to have access to 'cash on hand', with never having cash and produce in the same place and, needless to say, no bang-sticks even if it is muzzle loading flint lock.

But, I guess that may be the dividing line between walking that grey area and running that hard black.

Still the point is, spread out over time and with all expenses factored in, it is still rather inexpensive to produce a gram.

And that would allow us, the consumer, to make informed choices as to who we would like to support, why, how often and for how long.

I also know that any one, or ten, of the afore-said expenses can not be applied... Hard cash going not into sustainability 'real bills', but into instant life style... for somebody else.

It still comes down to who I choose to support?