As the cannabis industry grows, so does the competition and the investment needed to start, and you will need a solid cannabis cultivation business plan. It is required to have an address on the application of where you intend to set up your facility. This allows the licensing committee to verify the location meets all the requirements and restrictions. However, this also means you will need to have the place rented out or purchased before the application is submitted.

Total production will depend on the strain selected, the growing method used, and how well growing conditions are controlled. Total revenue will depend upon the weight and the variety of marijuana grown. The most potent marijuana, with the highest retail price, does not necessarily produce the greatest amounts. There are some varieties that produce in huge abundance but are not as potent or as fragrant, so they don’t command the highest price per pound.

Roughly, there are three options to grow cannabis: outdoor, indoor and greenhouses. Outdoor cultivators produce one harvest per year in the fall, whereas indoor cultivators produce year-round and can generate between 4 and 6 harvests per year or use the perpetual cultivation technique.  Greenhouse cultivators combine elements of both – exploiting natural light, while leveraging infrastructure and technology – to produce between 1 and 4 harvests per year, though sophisticated, well-equipped greenhouses can run year-round on schedules analogous to indoor production.

The following scenario assumes a company sets aside 3,600 sq ft space for growing marijuana. As with the other financial examples, these numbers are examples only to demonstrate what might be a typical result. These numbers demonstrate the profit potential in marijuana cultivation.

GreenHouse Scenario

Greenhouses are showing cost savings of about 33% electric costs for growing marijuana.

Year 1Year 2
Capital Expenditures           185,000
Direct Costs
Cultivation Electricity              31,850              54,600
Cultivation Water                 1,212                2,080
Cultivation Labor            117,000            156,000
Growing Solutions               1,092                 1,872
Operating Expense
Legal Fees & Licensing             13,000                 4,333
Administrative expenses                4,680                4,680
Community Service, Improvements                1,300                3,120
Sales & Marketing              16,120              88,920
Misc.               5,850                7,800
Operating Cash Flow           (46,505)           369,265
Investments           185,000
Working Capital           143,000
Ending Cash Flow              96,495            465,760

Indoor Scenario

3,600 sq ft warehouse for growing marijuana, with about 15 lights of 1,000 watts each.

Year 1Year 2
Capital Expenditures           146,900
Direct Costs
Cultivation Electricity, incl. cooling             111,475            191,100
Cultivation Water                1,820                3,120
Cultivation Labor            117,000156,000
Growing Solutions                 1,456                2,496
Operating Expense
Legal Fees & Licensing              13,000                 4,333
Administrative expenses                4,680                4,680
Community Service, Improvements                1,950                4,680
Sales & Marketing             16,120             88,920
Misc.                5,850                7,800
Operating Cash Flow          (127,751)            314,090
Investments           146,900
Working Capital           201,500
Ending Cash Flow              73,749            387,839

How Much Does it Cost to Grow Cannabis Indoor?

Indoor cultivators produce year-round and can generate between 4 and 6 or even 12 harvests per year.

You can find a cannabis cultivation business plan sample at the following link. Should you have any questions, please do not hesitate to contact us.

Hemp Cultivation Business Plan Templates are available at hempcbdbusinessplans.com.