New rules for reefer

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As marijuana moves into the mainstream, with new business emerging and complex rules and regulations, here is what you need to know.

Cash crops The Weed Blog reports that the average indoor-grown marijuana plant will produce an average of 1.3 ounces of useable marijuana. The average length of time to produce that is three to four months. Robin Schneider, legislative director of the National Patient Rights Association, reports the average caregiver charges about $100 an ounce, whereas dispensaries can charge as much as $400 an ounce. Of course, outdoor cultivation offers much higher yields, often more than one pound per plant.

Before the new law A caregiver could grow up to 72 plants. That’s a shade under six pounds (93 ounc es) of useable product, roughly $9,360 in value. That can be repeated every four months, to produce a total $28,080 in income. The state law specifically prohibits caregivers from making money on the production and distribution of marijuana to patients.

With the new law The caregiver’s production amounts remain the same, with the same likely income rate. However, there would also be three new tiers of marijuana growers, who are the only ones who can supply product to the dispensaries.

500 plants Indoor grows of up to 500 plants would produce 650 ounces of useable product. At $100 an ounce, that’s $65,000 a crop, and with three crops possible, that would be an annual income of $195,000. Of course, the strain of marijuana grown will also play a role in price, and if the per ounce price topped the current dispensary rates of $400 an ounce it would result in $260,000 harvests, and an annual harvest income of $780,000.

500 to 1,000 plants Indoor grows of 500-1,000 plants could produce as much as 1,300 ounces (81.25 pounds) of useable product. At $100 an ounce, that’s $130,000 per crop, with an annual income potential of $390,000. Of course, the strain of marijuana grown will also play a role in price, and if the per ounce price topped the current dispensary rates of $400 an ounce it would result in $520,000 harvests, and an annual harvest income of $1.56 million.

1,000 to 1,500 plants Indoor grows of 1,000-1,500 plants could produce as much as 950 ounces of useable product. At $100 an ounce, that’s $195,000 per crop, with an annual income potential of $585,000. Of course, the strain of marijuana grown will also play a role in price, and if the per ounce price topped the current dispensary rates of $400 an ounce it would result in $780,000 harvests, and an annual harvest income of $2.34 million.

Testing Jake Idoni, quality manager for ACT Labs in Lansing, said his company charges $350 for a full battery of tests for marijuana growers in Illinois. They conduct about 75 of these a week, he said, and expects a similar workload in Lansing once the law goes into effect. That’s 3,900 batteries a year, equaling an income of $1.365 million.

Other costs Costs associated with processing facilities or secure transportation carriers are variable and still undetermined. Costs on the retail level dispensaries are unclear because the wholesale cost of medical marijuana and extracts will include growing costs, transportation costs, testing costs, processing facility costs and the costs of store front operations and security.

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