To the outside world, the legal cannabis industry appears to be one big cash machine. While it’s true lots of money can be made, the price of doing business can be steep, particularly for those at the pyramid’s foundation—growers. Beyond direct cultivation costs like utilities, nutrients, and labor, farmers must move their crops from fields to distributors, processors, and retailers. And let’s not forget state and local jurisdictions’ off-the-top cuts in the form of taxes and fees.
The so-called “green rush” has been tough on smaller, boutique growers as the focus has shifted to large-scale cultivation. In fact, facilities larger than 250,000 square feet, capable of yielding more than 50,000 pounds of flower, are not uncommon anymore. For example, Arizona is home to the largest greenhouse complex in the United States: 300 acres, or 13 million square feet.
Although expensive, cultivation—or at least cultivation licenses—can be extremely profitable. For instance, Florida, with a population of more than 21 million, has licensed only thirteen companies, all for seed-to-sale operations. In 2017, one of those licenses sold for $40 million before the company earned its first cent. Another license sold for $53 million in 2018. New York, with a population of 20 million, has issued ten vertically integrated licenses, one of which fetched $26 million pre-revenue.