Concerns Over Cannabis Costs and Profits

I have been listening to more and more complaints from collective owners in WA and CO. NOt much different than the ongoing complaints of collectives in CA:

“We can’t do business under forms of legalization as the profit/costs are impossible”. Well, they are NOT impossible at all. Will some collectives fail – of course. Will some collectives thrive – of course. The collectives that look and feel just like recreational adult outlets, will all fail. Collectives that offer different and special medicine will thrive.

Below are some points and thoughts.

1. I have studied indoor growing for a number of years and specifically the costs. In my experience, the true COST, including reasonable labor, if you have 50 – 99 plants and grow efficiently. Indoor cannabis can be grown for under $1100/pound. This translates into $2.50/gram. I know it is being done and is for sure possible. If folks want to make a killing/profits, it does not work however. As we all know, the plethora of collective stores beat one another all the time and the patients are generally losing.

2. If cannabis is tested in large quantities by the growers, as it MUST BE, the cost of testing per pound is perhaps $100, so it adds at most another $0.25 per gram

3. The 25% markup times three for example in WA, is WAY less than the current markups on the semi-black market our collectives mostly work within. I would say that only a small percent of growers, at least in CA grow ALL their own cannabis. I doubt very many collectives are growing anywhere close to their needs. In most states where medical cannabis exists, the costs of the product are WAY too high. Even the doubling or at times tripling of cost JUST at the collective level is not so compassionate.

4. I am uncertain of this, but doesn’t the ballot initiative only refer to Adult Use? Does it also apply for medical use? Again, I don’t know for certain.

Smoking cannabis is awesome for many reasons, but it is VERY inefficient. At most, 15% of the medicine is taken in by the patient, with the rest going “up in smoke”. By recapturing the 85% – 90% waste, by using dosed extracts, the costs are kept down and most of the medicine stays where it belongs. Shouldn’t recreational use be more expensive than medical?? Of course it should. Beer should cost more than the medicines people desperately need. Sorry beer drinkers

I recently did an analysis for a group regarding the efficiency of of using CBD in the new generations of vape pens. When breaking down the math, it would have to cost WAY too much to produce efficiently. Nearly $200 worth of whole plant CBD would have to be used for each cartridge, when it is only really worth $15 or so in an extract.

What does this mean for collectives in Colorado and Washington? I THINK it means that the train is rolling through and maintaining “profitable” businesses at the growing level and collective level will only work with dosed cannabis medicines. Let’s forget about the cost of the flowers for a moment. The way, way bigger issue from my perspective is how in the world will collectives survive when they look and feel like Adult Recreational Stores?

Author
Allan Frankel, MD Dr Allan Frankel is one of the few physicians in the US who truly understands Cannabis as a medicine. All treatments suggested have been well studied. Every patient seen by Dr Frankel is given a personally created Treatment Plan created with the patient's specific issues defined. Plant medicine requires "tuning" of the dosing. Dr Frankel works with his patients thru a messaging portal. The use of this portal, allows quick and simple follow up contact with Dr Frankel. Patients are not charged for these messages, as this is how Dr Frankel has learned what he has learned. Follow up appointments in person or by phone/video are also available when needed

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