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Is It Expensive to Grow Weed?

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The legal cannabis industry may seem like a lucrative cash cow to outsiders. Although there is potential for significant profits, the expenses associated with running a cannabis business can be pretty high, especially for those at the bottom of the supply chain – the growers.

 

In addition to the costs of labor, utilities, and fertilizers used in crop cultivation, farmers must also pay for the transportation of their products to different parties, such as processors, distributors, and retailers. They must also pay numerous taxes and fees frequently deducted by state and local authorities to receive a cultivation license.

Cultivation Costs: Indoors vs. Outdoors

The cost of indoor cultivation is generally higher, primarily due to exorbitant rents, which can be as much as $75 per square foot in specific locations. The average cost of greenhouse and combination cultivation across the country is approximately $50 per square foot. Indoor operations are also more costly because they require complete control of the environment, necessitating various equipment such as grow lights, temperature, humidity control systems, and automated water and nutrient technology.

 

Cutting-edge lighting systems alone can cost small growers up to $120,000, while security systems may exceed $50,000, and other essential equipment can amount to around $150,000 in expenses. Depending on the size and location of the business, a lean operation may only yield a gross profit margin of 55 to 57 percent.

 

In contrast, outdoor cultivation relies on natural sunlight, allowing Mother Nature to regulate environmental conditions. But due to the unpredictability of natural elements, this can both be a blessing and a curse. Land for outdoor growing is priced between $10 to $17 per square foot, though it can be substantially more in some locations. Automating tasks is also more challenging in outdoor grows, which can result in higher labor costs.

 

Sun-grown operations can yield multiple harvests annually in states with a moderate climate like California. However, in states with shorter growing seasons, like Illinois, Ohio, Colorado, and New York, cultivators must cultivate at least some crops indoors to ensure year-round production.

The cost of making a profit by growing marijuana varies from state to state. Cultivators, suppliers, and consultants have shared rich insight into fees, challenges, and strategies for managing expenses to determine estimated figures.

 

Nevada

Nevada faced a significant concern when transitioning to recreational marijuana: whether the supply would meet the demand. This was partly due to the state’s high taxes and fees, such as the $5,000 application fee for cultivators, a $30,000 charge for the initial recreational grow license, and a $10,000 yearly renewal fee.

 

Medical cannabis production has an application price of $5,000, a $3,000 initial licensing fee, and additional costs of $1,000. The Nevada Department of Taxation also levies a 15% tax on medical cannabis goods. Local cities and counties are also allowed to impose taxes and levies. Operating a cannabis business runs into hundreds of thousands of dollars before making an initial sale when additional costs like utilities, labor, and fertilizers are evaluated.

 

Oregon

Oregon first had supply shortages, which led to an increase in license grants. However, this resulted in a drop in flower prices, which forced smaller boutique growers out of business. Larger producers are consequently pressured to run lean to stay competitive. Considering that Oregon’s application fee is only $250, it is good and evil that it is one of the lowest in the nation. Furthermore, the state only taxes the retail sales of recreational goods.

 

According to Jazen, a cultivator working at Wisely Organics, approximately 20% of the revenue generated from the 20,000-square-foot indoor cultivation is paid in federal and state income taxes. The grow allocates 5% of its budget towards cultivation licensing and regulatory fees, 10% for utilities such as water and power, and 15% for rent and supplies.

 

Labor accounts for the highest cost, at 42%, for Wisely, similar to most other cultivators nationwide. Despite the state’s inclination towards technology as a replacement for workers, Wisely places great importance on its employees. Jazen stated that they intentionally avoid high-tech solutions, and their most advanced machinery is a skid steer tractor. Although they experimented with a trim machine to substitute workers, they discovered that the product’s quality was superior to manual operation. Currently, the device is only used for 2% to 5% of the harvest batches.

 

Ohio

The cultivator licenses issued by Ohio are divided into two levels. The first level, level I, permits a canopy area of up to 3,000 square feet. Growers must pay an application fee of $2,000, an initial license worth $18,000, and $20,000 yearly for renewal to own a license. Level II growers must pay a $2,000 application fee, an initial license fee of $80,000, and a $200,000 annual renewal fee to cultivate cannabis on  25,000 square feet.

 

Buckeye Relief’s CEO, Andrew Rayburn, stated that for their 60,000-square-foot farm, he allocates 2% of the estimated annual revenue for payroll taxes, 3% for licensing fees, 3% for water and power, 24% for labor, 17% for rent and supplies, and 1% for technology.

 

California

In the largest and most established market, the annual fees for application and cultivation licensing are relatively low, ranging from $135 to $8,655 and $2,420 to $77,905, respectively. In addition, there is a weigh-master license fee of $155. However, taxes can be a heavy burden.

 

The state charges $9.25 for each dry-weight ounce of flower, $2.75 for every dry-weight ounce of cut, and $1.29 for each ounce of the fresh plant, up to a maximum of $5,000. In addition, cultivators are charged an excise tax of 15% market average value of their crops, whether or not such crops sell. A land use tax may be levied by some jurisdictions even while a field is fallow, and counties and towns may impose extra taxes and levies.

 

Conclusion

Although the legal cannabis industry can appear to be lucrative, many costs are involved, especially for producers. Depending on the type of cultivation used and the area, the cost of operating a cannabis business might be high. Because of the equipment requirement, indoor culture is typically more expensive; in contrast, outdoor cultivation is less expensive but more difficult to automate.

 

Due to different taxes and fees, the cost of producing a profit differs from state to state. To ensure they turn a profit, cannabis business owners must carefully consider their prices. Despite its difficulties, the cannabis sector still has promise for individuals who are prepared to put in the time and effort and manage their expenses wisely.

 

GROWING WEED WITH OR WITHOUT A LICENSE, READ ON…

COSTS OF GROWING MARIJUANA

HOW MUCH MORE EXPENSIVE IS IT TO A LICENSE AND GROW LEGAL WEED?



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Maintaining The Highest Level of Quality and Freshness for THCa Products

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When looking for food, the freshness and quality of the product are essential to the customer. Care must be taken with every product to keep its original qualities. This makes sure that customers have the best experience possible with every buy. Brands ensure their products stay potent and fresh, so to maintain they put them in airtight containers. This gives customers a premium experience that stands out in the market even if they are bought from thca flower clearance. This is especially important when it comes to cannabis goods. Keeping THC-rich flowers fresh ensures every person has a good experience that meets their needs.

The practice of storing things in air-tight containers is very helpful for maintaining their quality. These containers help keep out air, light, and wetness, which can all make the product fresh and effective over time. For people who use cannabis, how fresh the product is can have a big effect on how strong and how long the benefits last. When THC flowers are stored properly, users can expect a better experience that keeps all of the product’s benefits.

The chemicals that give weed its unique tastes and smells, don’t break down when it is stored in an airtight container. Terpenes are very important for improving the taste and making each type unique. The natural qualities of these terpenes can be kept safe by storing them in the right way. This way, every user can enjoy the full range of tastes and smells that the product has to offer.

Why airtight containers are important

Containers that don’t let air in are not only useful, they are necessary for storing things. Over the time, oxygen can break down the product’s cannabinoids and oils. When you use airtight cases, the product stays protected from the outside world. This keeps its chemical structure and makes sure it stays strong.

The users will trust the products only if they feel good about quality. Whether they are used for fun or medical reasons, THC flowers if not stored correctly may have less effect, giving a bad experience for users. To keep the level of quality, it is important to spend money on good storage methods like using airtight containers.

Make sure you have a great time

When a product has been carefully stored in the best possible ways, the experience is more powerful. Whether you are buying flowers to help you feel better or just for fun, they should always be live. With this care, users can get a product that works well like they bought the day it was packaged.

Freshness is at the heart of this process. By making sure that goods are kept in containers that keep air out, businesses can keep up the quality of the goods and make sure that customers can get the best items. Customers are happier and more likely to trust the brand to always provide better goods.

In the end, keeping the product fresh and high-quality isn’t just about keeping it safe, it is also about giving the customer a regular, good experience. Making sure that a product stays fresh and effective from the time it is packed until it gets to the customer is very important. One easy and very effective way to reach this goal is to store things in containers that keep air out. Looking at good storage methods will continue to be important for keeping the quality of THC products even as the cannabis business grows. Customers can be sure that this way of keeping things fresh and effective will make their experience better, whether they are looking for new types or taking advantage of thca flower clearance deals.



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Cannabis Code Enforcement Fines Must be Remedial, Not Punitive, Federal Court of Appeal Holds

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The Ninth Circuit Court of Appeal has reinstated a civil rights lawsuit against Humboldt County, California, that challenges the county’s practices in imposing punitive daily fines. It is the first time a federal appellate court has weighed in on local government’s enforcement of code violations involving cannabis farms.

The Court of Appeal decision

The decision, in Thomas v. County of Humboldt, comes after years of complaints by cannabis cultivators that local governments impose unfair fines for technical violations at licensed farms. That counties and municipalities have adopted and are enforcing large fines involving licensed properties is one of many reasons why increasing numbers of farms have given up their licenses and shut down completely or returned to the illicit market. This is hurting state efforts to bolster the legal market and suppress the illicit market for cannabis.

Lessons for industry and regulators

A takeaway from the decision is that local governments need to keep the goal of remediation in mind in establishing penalties, must be more reasonable in allowing cultivators to fix violations, and more flexible in decisions to impose fines and settling disputes. The decision should motivate county and city attorneys, and cannabis licensees and applicants, seek assistance from a mediator with expertise in the cannabis market and regulation. The courthouse might not now be as friendly a venue for local government as it has been in the past.

Most cannabis businesses that run afoul of local codes pay the penalties, no matter how unfair they might seem, because they can’t afford a long legal battle and the administrative and court processes are tilted against the property owner. Administrative hearing officers routinely uphold notices of violations and the penalties imposed by code enforcement officers. Writs of mandate brought against local government in state court, particularly in smaller counties, are extremely difficult to win.

Background on the Thomas case

What has made the Thomas case viable is that several plaintiffs banded together in a civil rights class action in federal court under 42 U.S.C. § 1983, alleging that Humboldt County’s penalties for cannabis abatement violate the Eighth Amendment’s Excessive Fines Clause.

Humboldt County established a schedule of daily fines for illegal cannabis cultivation of up to $10,000, with a minimum of $6,000. Upon receiving a notice of violation from the county, the party has 10 days to abate all violations, subject to an appeals process, during which penalties continue to accrue. Violations included not just the illegal cultivation of cannabis itself, but also any other violation that facilitates illegal cultivation of cannabis. The Thomas plaintiffs contended that the county issues violation notices with hefty fines based on imprecise data (such as satellite and drone photos) and for code violations that originated with previous property owners.

The lower District Court dismissed the lawsuit on the basis that the plaintiffs lack legal standing, because they had not, at the time of suit, paid any penalties. But the Ninth Circuit held that the plaintiffs had concrete injuries, providing standing, because they suffered emotional distress and had incurred expenses with engineers and attorneys as they attempted to abate the alleged violations and defended themselves in hearings.

Getting to the merits of the lawsuit, the Ninth Circuit held that the plaintiffs had plausible claims under the Excessive Fines Clause because the penalties were punitive, not remedial. The Ninth Circuit agreed with the plaintiffs that the fines were unconstitutionally excessive because (1) the notices were vague, often inaccurate, or involved violations that pre-dated the plaintiffs’ occupation of their properties; (2) lesser penalties could accomplish the same health and safety goals; and (3) the alleged offenses caused no harm beyond a technical lack of compliance with the county’s permitting regulations.

Humboldt provides for an administrative appeal before a hearing officer who determines whether a violation has occurred or continues to exist. The hearing officer can only reduce the penalty for a violation in limited circumstances and cannot reduce it to less than $6,000 per day. Although the Ninth Circuit did not explicitly address it in the Thomas decision, a property owner in most circumstances also can be forced to pay the county or municipality’s abatement costs and legal expenses — including those incurred in a subsequent writ of mandate proceeding in state court. The Ninth Circuit agreed that the Thomas plaintiffs had come under:

“immense pressure to settle due to the County’s issuance of ruinous fines, . . . its undue delay in providing hearings, its denial of permits while abatements are pending, and the cost the County imposes to prove one’s innocence.”

The Ninth Circuit found that Humboldt County’s fines were “clearly punitive, not remedial as argued by the County.” The fines could reach millions of dollars, and, in the case of one plaintiff, the fines dwarfed the value of her property. The appellate court was untroubled by the involvement of cannabis, which remains unlawful under the federal Controlled Substances Act:

“[I]t seems clear to us that lesser penalties could accomplish the same health and safety goals,” and “the offenses here have caused no harm beyond a technical lack of compliance with the County’s cannabis permitting regulations.”

The Thomas plaintiffs’ strategy pays off

The Thomas plaintiffs’ strategy of going to federal court was fraught, because the court could have just as easily declined to hear the matter under the illegality doctrine, but it paid off here; the Ninth Circuit not only considered the case but also disregarded the problem of whether the plaintiffs were entitled to any remedy under federal law.

The Ninth Circuit concluded by acknowledging that local government is “often at the forefront of addressing difficult and complex issues,” but it should use “flexibility” in decision making and “cannot overstep its authority and impose fines on its citizens without paying heed to the limits posed by the Eighth Amendment.”

Note: This post was first published January 6, 2025 on the Alger ADR Blog



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Are Americans Shifting to Cannabis and Saying Goodbye to Cigarettes for Good?

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Are Americans Shifting To Weed And Saying Goodbye To Cigarettes?

 

We live in a time when people are more health-conscious than ever.

 

For the first time in history, we’re seeing a downward trend in the consumption of cigarettes, especially among young adults and adolescents. Just a few decades ago, cigarettes were considered ‘cool’. The link between cancer and cigarettes were established by the 1950’s, though accepting that cigarette smoking was “bad” for you didn’t take root socially until around the late 1990’s.  

 

Now, we know that cigarette smoking is a dangerous, often fatal habit that leads to cancer, respiratory illnesses, and heart disease. According to the World Health Organization (WHO), over 8 million people die prematurely from tobacco use yearly.

 

In the results of a Gallup poll from early 2024, they found that more Americans are more likely to smoke weed than cigarettes, while young people are more than 5 times more likely to choose weed over tobacco. The poll found that 17% of Americans smoke weed, while 12% admitted to smoking cigarettes in the previous week. The more dramatic difference was observed among the 18-34 age range, where 26% admitted to consuming weed while only 5% of them still smoke cigarettes.

 

For the same poll, they also found that the older adults aged 55 and up were more likely to still smoke cigarettes compared to marijuana. “Americans’ reported marijuana smoking has more than doubled since 2013, when Gallup first added the question in its annual Consumption Habits survey,” explained Gallup. “That year, seven percent said they did,” they reported.

 

Improved Public Perceptions Leads To Healthier Choices

 

One can’t deny that there has been a massive shift in the increasing awareness of marijuana’s health benefits, as well as the dangers of cigarette smoking. This leads to changing public perceptions, better and more scientific research as well as clinical studies, and an improvement in the law.


The law, specifically, has been instrumental in mitigating the spread of cigarette use. For example, many governments worldwide have established strict no-smoking policies and placed a massive tax on cigarettes. Tobacco manufacturers are no longer allowed to freely advertise their product. All these have led to a downward trend in cigarette smoking habits and purchasing.

 

The proliferation of legal cannabis throughout North America, not just for medical use but also for recreational use has also contributed to a widespread cultural acceptance of cannabis, which has also improved the public perception of the drug. As we speak, it’s already become a part of society not just in North America but also in countries such as Thailand, several European nations, Uruguay, and Mexico to name a few.

 

In addition, people are also becoming more educated about the use of alcohol. While it may still be the most widely used intoxicant, its days me be numbered: there is a small yet growing number of people who are choosing to replace alcohol with weed, because of the sheer number of studies proving the dangerous link between fatal illnesses and alcohol. Not to mention that alcohol is linked to drunk driving and road fatalities, multiple different types of cancers, horrible hangovers, and so much more.

 

Even Gallup polls from as far back as 2022 revealed that people in the United States have already begun to smoke more weed than cigarettes. Gallup conducted the survey from July 5 through 26 of 2022. The results reveal that 11% of the population smoke cigarettes, while back in the mid-1950’s, 45% of Americans smoked them. Meanwhile, 16% of Americans reported that they smoke weed, and 48% tried it in the past. Back in 1969, just 4% of Americans smoked weed!

 

It’s clear that societal and cultural perceptions around both have changed dramatically. “Smoking cigarettes is on the decline and is most likely to become even more of a rarity in the years ahead,” explains Gallup Senior Scientist Dr. Frank Newport. “This reflects both public awareness of its negative effects and continuing government efforts at all levels to curtail its use,” he said.

 

Unfortunately, the Gallup poll also found that alcohol remains a popular substance for Americans. Despite the increasing studies being published right now that alcohol is a proven carcinogen, one can’t blame the population: it’s legal, easily accessible, and affordable for many.

 

Overall, it seems that the demand for wellness is slowly taking over. Wellness is no longer just a buzzword or a trend; it’s a real pursuit that more, especially young people, are seeking. And cannabis fits very well into that picture: whether CBD or THC, the components of marijuana have proven beneficial for the mental and physical health of people, across a wide age group. From pediatric CBD applications to therapeutic uses for the elderly, cannabis can be beneficial for many people.

It’s so easy to see why thousands of young adults commonly include cannabis as part of their everyday wellness regimen – the same generation that have shunned cigarette smoking for good.

 

Conclusion

 

If you really must have a smoking habit, choose weed over cigarettes. Even then, any type of weed is much healthier than tobacco. Marijuana is so much healthier for your mind and body, and it can function as a medicine and supplement as well.

 

For individuals who are struggling to quit smoking cigarettes, you might even want to consider using cannabis as a cessation aid. Many have found success using cannabis to quit cigarettes, with longer-lasting success rates.

 

CAN CANNABIS HELP YOU QUIT CIGARETTES? READ BELOW…

CAN WEED HELP YOU QUIT CIGARETTES

CAN WEED HELP YOU QUIT CIGARETTES? WE ASKED THE PROS!



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