Starting a grow operation in Alaska

[KodiakStoner]

Delacruz,
Wow May 16
that's pretty late into the year. What do you think about capping the amount of pot or growing space per license? The thing is that three 20,000 electric light indoor operations could produce all the pot needed in Alaska. Just 1000 sf of lighting cost about $60,000, not to mention the fans and heat and building, if I did the math right. I'm kind of hoping that we are restricted to outdoor or green house growing. Im fearful that if they allow too much grow space the price of weed will drop so far that just the $50 tax and the electricity needed will wipe out most all growers profit after investing a lot of money. The thing about forcing us to grow outdoors or at least awarding us with more space for growing outdoors or in a greenhouse, is that we will have a better chance to compete with the illegal grow operations that would have to stay indoors and pay steep electric bills. I'm really afraid the state is going to screw this thing up and cause a lot of bankruptcies. What are your thought on this? It would be a real shame if this new industry gets taken over by big business.

 

[delacruz]

It will be hard to figure out anything until we can see the direction they are heading once they roll up their sleeves and get to work on it. They could use a basic model of Colorado or Washingtons rules and go from there. Alaska is a bit different from other states with its large area and low population. Kodiak, in particular, being an island, and with our small population wouldn't need much in the way of product. I would thing one or two growers and one dispensary would more than handle the needs here. I would assume licenses would be distributed according to community size. x growers and x dispensaries per x capita. Guess we'll find out. Not much to do except hone our growing skills and be informed and ready without investing too much capital.

 

[KodiakStoner]

A woman named Cynthia Franklin is the head of the Department of Alcohol and Tobacco. She's in charge of making the new rules. If you have any concerns you can find her email by a google search. If enough of us make our feelings known, perhaps we will get something that benefits us all. Right now Washington is sitting on a huge surplus of weed and the price has dropped so sharply that many growers are already fearful of losing their investments. (Story on Yahoo news today). It will be interesting how they decide whether I get a license or you get a license if only one grower is required for Kodiak, especially when there could be another 20 that want that license. Currently there are over 2000 wanting a license in Washington that won't get one. One story I read stated that around 300 licenses to grow would be awarded in Washington and I think that translated into about 1000 lbs average per grower. I'd be tickled pink to have enough room to grow 200 lbs in Alaska but only if the number of growers are restricted. I'm not sure if it's better to be a grower or a retailer though, since the grower is assessed the tax and if too many growers are involved the retailer will be getting product for next to nothing. It's a tricky thing they are trying to establish. I can't fault honing your growing skills but I think the real value right now might be in lobbying people like Ms. Franklin and getting the word out to other wannabe growers. I think the number of ounces they expect to be marketable in Alaska per year will come in somewhere near 400,000 oz. If we have 200 growers state wide that would translate into 2000 oz per grower. If we profit $50 per oz (which might be on the high side) That's $100,000 gross per year. It's not a lot but at least it might be enough to create a living for a few hundred families.

 

[delacruz]

Found Ms Franklins email on the alcohol control board website. Dropped a note letting her know my concerns and ideas. There was a sign up page on their site to be notified of how the process is going. There was also a projected timeline.

 

[Weaselcracker]

That sounds way better than the situation I had. And one thing about the north, the long daylight hours allows crops there to catch up with the southern ones mid summer. A greenhouse (obviously) brings with it a bunch of work- mostly in that you probably have to do more watering and climate control. I think the right strain would be the very most important thing. Has to be auto. Other members should be able to help you with that. When I grew it was for personal fun- a dozen different mostly mystery strains. Summer temps never got above 20 Celsius ("very hot day") and probably down to about 5 at night. They grew fine. Just had mold troubles once the buds got half size. A buddy of mine did well up there last summer with some strain he claims is called Northern Indica (?) & he's sending me some seeds. If that happens in the next couple months I can mail you some, assuming we will have the honour of being allowed to pm by then.

I re-read the 420 rules because this was something that I wasn't 100% sure about when I wrote it, and got this. "Posts pertaining to the buying/selling/trading/swapping/testing/giving of seeds, clones, pollen, cannabis, hash, mail order Marijuana or any other substance or article are not permitted. "
Seeds are legal where I am and presumably in AK too but I can see why they wouldn't want the forum to get overwhelmed with buying selling and trading.
Anyway...just something that was niggling at me. I hope you keep posting with info re the North.

 

[Dank420Girl]

Yes I guess there is a profit for the big guys if growers do in fact get $85 per ounce. I'm kind of hoping the State of Alaska takes a different approach then Washington. If the average Alaskan consumes .4 oz of legal pot per year, it translates into about 350,000 ounces. It wouldn't take too many 20,000 sq ft grow operations to chew through that amount of weed in a year. My guess is around just 3 growers each with 20,000 square feet would take care of the entire quota.

What Alaska should really do is make it only legal to have one (1000 w) grow light for starts in the spring and then limit growers to 4000 square feet of either in door (greenhouse) or out door growing space. The money wasted on infrastructure and electricity consumption
would be enormously reduced and the amount of future bankruptcies would be hugely diminished. In 4000 square feet, growers would have a happier life with a half year growing routine. With each grower using all 4000 sf of grow space they would produce about 6000 ounces per year, at $85 per oz and $50 tax per oz they would earn $220,000 each. It would produce a community of about 58 growers if they all grew 4000 s.f. of weed. My hunch is that Alaska will no doubt create a quota system and indeed restrict the number of permits (as they have in commercial fisheries) Most likely they'll issue around 100 grower permits and half the growers will produce a lot less then 6000 oz's per year.

I would not venture into the biz, unless something along these lines does not become law. I don't want to be road kill trying to compete against huge corporations with big grow operations. Am I wrong to assume the cost of just the lights of an indoor grow operation will be more than $60,000 per every 1000 s.f.? The biggest problem for legal Alaskan growers that are saddled with a $50. per oz tax is to displace the growers that are now growing illegally. Most of these folks are growing indoors with lights now and would benefit hugely if electric grow operations become the norm. They already have the infrastructure built. It may be that the state of Alaska will realize this. They really don't want to create a lot of bankruptcies. My thinking is that the state would love to come up with a plan than would hurt rather then help the pirate growers. Don't get me wrong, I don't blame illegal growers for what they've been doing but a bureaucracy that awards the same characters that they've been trying to stop for years, is not likely. I think the public would scream bloody murder if they did.

In Kodiak, electricity is about .14 per kilowatt hour (lower than most places in Alaska because we have wind turbines and a hydroelectric dam. At those rates, just for the lights and not including heat and fans, the cost of electricity in just a 1000 sf grow space would be over $3000 per month. Maybe a grower with 1000 sf of grow space might get lucky and produce 6000 oz indoors in that 1000 s.f. per year. If he is netting $35 per oz. His gross income after taxes and before electricity, labor, seed, fertilizer etc. is $210,000. The average Alaskans electric bill would certainly be over $50,000. With the other fixed expenses it's possible that a grower with a 1000 s.f. indoor operation working with just 2 helpers might be able to survive. But 100 grow operations like this will be wasting $5 million dollars worth of electricity a year. It wouldn't surprise me if the bureaucrats prefer to contribute to global warming and bankruptcies but it sure doesn't make sense to me.

If you are looking to profit you should be focusing on QUALITY not quantity. $85 dollar ounces sounds like low quality weed I wouldn't even look at it if I went to collective and they said it was an $85 ounce, I'd be looking at the top shelf. If you grow high quality weed people WILL pay a premium for it. I sold my outdoor 818 Headband and Blue Dream for $2,600 per pound here in California legally to the collectives which is $160 per ounce. Then the collective will put top shelf label on it and sell it for $40 an eighth and $75 dollar quarters. Which translates to $5183 per pound at $40 an eighth before taxes. So the collective just made 2,400+ dollars off my pound and sold it all in 4 days calling me back to try to buy more. Other people are barely lucky to get 80$ an ounce for their weed if it is just average weed. You could have 100 pounds of average weed and it be nearly impossible to sell because just about anyone can grow average weed, but I'd make more money with my 50 pounds of top shelf and it's a lot easier to sell. It's a messed up system but that's how it works.

 

[KodiakStoner]

Dank420girl,
I certainly hope the price stays up and it has the chance to if we don't over supply the market. If there is twice as much pot available as the market can absorb the price will drop. Thanks for the tip on the high quality weed. Maybe it's smarter to grow indoors and avoid the auto flowering strains that rarely reach 20%THC

 

[KodiakStoner]

delacruz,
glad you found Cynthia's email. If enough of us small time people contact her maybe we can bend her ear in our favor. I'm thinking about a letter to the Anchorage daily news sometime in the future.

 

[KodiakStoner]

Weaselcracker,
good point! we do deed to be careful. Thanks for the head-up.