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The Economics Of A Grow

Sonora

New Member
:welcome:

Hi! So, I'm an economist, which means I think about things like money, time, return on investment, etc. a little bit different than most people - that is, formulaic-ly, rather than emotionally (my colleagues might say 'correctly' vs 'incorrectly', but that's kind of arrogant, yes?). Anyhow, I thought I would lay out some of the economics - as in the classical sense - behind starting a new grow. In doing so, I hope I allow people to understand what is the best way they can maximize their investment, and to not get discouraged and to stick with growing.

To start, I think we should dispel a major myth:

the horridly incorrect "rule of thumb" that an efficient grow achieves 1 gram/watt. This is very easy to disprove - say you have 2 methods of growing, method A and method B.
*Method A costs $25/month, and gets you .5g/watt;
*Method B costs $100/month, and gets you 1g/watt.

Which should you choose? Well, assuming you can afford both methods, you should choose method A, and run 4 of them in parallel - this would get you 2g/watt/dollar, as opposed to 1g/watt/dollar using method B. If you know anything about math, you'll also see we can cancel the watts from our units of comparison, and we end up with the factor g/$ spent.

This is a MUCH better metric for growing efficiency than g/watt - and, in fact, when you start looking at grows in the grow journals through the lens of grams/$ spent, as opposed to gram/watt, you start to see why so many people swear by their CFL or LED set-ups. Someone can get 75 grams of weed for $20/month in electric bills over 3 months - so, for the equivalent of $60 in a 3 month grow, you get ~2.5 oz of weed; taking the going (Massachusetts) rate of ~$300/oz of primo herb, that's a final grow valued at $750. In other words, those poor producing, weak CFL grows can give an ROI of 12.5 to 1! Compare that with a typical HID grow, which in the same space and time might result in a harvest of 125 g , but with a cost of almost $40/month to operate - a crop valued at $1300, which gives you an ROI of 11 to 1. The CFL has a better ROI ratio, while carrying less risk; less risk of fire, less risk of exposure to the authorities, etc. That is not to say CFL's are better than HID's, per se - only that there is more involved in the economics of the choice than g/watt.

So, we've established that a better metric of the returns on growing are grams/dollar. How do we calculate what is the most effective rate of return for our material? I'll use my grow-set up as an example:

* Mars II LED Grow Light 1200W, $450.
* Grow Tent 3' 3'' x3' 3'' x6'', $100
* 6 inch In-Line Fan 400 CFM, $80
* Carbon Filter, $75
* Fan speed adjuster, $20
* Growology nutes, $60
* 2 black widow grow buckets, $100
* ph kit, ph meter, tds meter, comes in a bundle, $50
* 10 lbs hydroton, $10
* rapid rooters, $10

Total cost: ~$1,000

This gives a grow tent with 3' x3' x6', in a DWC/SCROG grow under a large LED light with a real-world draw of ~535 watts. Going seed to smoke, two plants in this set-up will generate anywhere from 6 - 16 oz for me, depending on time of year, how much attention I'm paying, luck, strain, whether I'm trying anything new, etc. Let's take somewhere in the middle and say 11oz per grow is my average. (Note: the point isn't that my setup is the most economically efficient - I overpaid for the black widow buckets, for example, out of pure laziness - the point is just to get items and prices we can use in a formula).

So, the start-up cost of my grow is $1000. From seed to smoke takes me about 16 weeks; about 6 weeks germination/veg, and about 10 weeks flower (I should really put together a grow journal sometimes soon). I smoke, on average, about an oz/month. So, assuming 16 weeks = 4 months, then while I'm growing, I am "spending" 300/month smoking weed that either (A) I bought, at $300/oz, or (B) weed I grew that I could be selling at $300/oz, were I a dealer. So whether we're talking actual cost, or opportunity cost, the cost of my grow increases by $300/month in weed cost - over the course of a 4 month grow, we are now at $2,200.

But there's electricity, too! My LED draws at 535 watts - my electricity cost, here in Taxachusetts, is $.15/kwh. So, during veg, running at 18 hours a day, I spend about $45/month on electricity for that massive Mars LED (15 cents and hour times 18 hours a day * 31 days per month, divided by 1000 because I'm billed in killowats, and not watts). In flower, using the same formula, I pay about $30. So, in electricity, I pay about $135 over the course of a 4 month seed to smoke grow (it's less expensive when I use clones, but for most people starting up, their first grow will be with seeds, so I'm using that for this example).

So, all in, our first grow has a total outlay of about $2300. To get a positive ROI in our first grow, we need to grow about 8oz weed - (8oz * $300/oz = $2,400); anything less than that, and we're better off buying weed, rather than smoking it! So, how likely is it we can do that?

Well, where that aforementioned awful rule of thumb of 1g/watt comes from, is that on average, 100 watts/square foot of space will net 1g/watt of weed. No, a 150 watt HPS in a 1x1 tent would not net the average grower 150 grams; there is a point of diminishing returns at both the lower and upper bounds. But in general, this rule holds. So, to figure out the average returns of my set-up (and once again, here's where I prove my set-up is sub-optimal in some ways): take light, which is 535watts, and divide it by my 3 x 3 tent, which is 9 square feet, multiplied by the 100 watt/ft^2 ideal: 535/900. You get .594 grams/watt (much less than 1). Now, take that .594 gra,s/watt, and multiply it by my lights true wall pull of 535 watts, and you get 318 grams, or a little over 11 ounces. So the average grower, using my setup, will probably pull in slightly over 11 oz; a stud might pull a pound and a half (and in fact, if you look on YouTube, some people do even better than that). Sometimes I do extra shitty and only get 6 ounces. But on average, I can expect 11 and change. Since I needed to surpass 8 ounces on my first grow to get a positive ROI, I can conclude that this setup is likely to succeed, if success is measured in positive ROI within 1 grow. :cheer:

NOW - let's look at another option: the British Columbia Northern Lights BloomBox. The BloomBox runs $6500 new; when you include taxes and shipping, you're looking at $7,200. I have a friend who runs the bloombox, so I already know it costs just about the same amount to run the BB as it takes to run my grow (BB comes with 400 watt HID and a CFL germie/veg areas). So, your initial outlay for a similar seed-to-smoke BB grow would be $7,200 capital investment + $1,200 weed opportunity cost + $135 electricity over 4 months. Total cost: $8,535. To get a positive ROI at $300/oz, you would need to grow 28.5 oz of weed, or more than 1 3/4 pounds. That sounds awfully tough 0- is it doable? Well, according to the BCNL website, the flower area of 36" width, 28" depth, for a total area of 7 square feet. Using our formula to determine avg grow potential, we take the 400 watt HPS, and divide it by 700 (7 sq ft * 100 watt/sq ft), and we get .57g/watt avg potential. Now multiply that by the 400 watt HPS you have in the box, and you get...228 grams, or a smidge over 8 ounces. We need 28.5 ounces to reach ROI, which means we would need 5 average size grows grows to reach ROI in the BloomBox! Except...each 16 week grow still adds $1335 in expense - the cost of electricity, and the opportunity cost of the weed you smoke, at $300/oz. When you do the math, you realize it takes an astounding SEVEN 16 week grows to reach positive ROI with the BloomBox! 7 * 16 weeks = 112 weeks, or over 2 years!!!

So, in conclusion - do you know why the professionals don't buy BloomBoxes? because they are HORRIBLE deals. You're far better off buying the components I've listed above (or equivalents), paying someone handy you can trust $500 to put it all together for you, and running with that. Pre-built boxes are a SCAM, targeted at new growers who don't know any better.

I hope you've found this helpful - grow big, and grow profitably (whatever "profitably" means to you)! :Namaste: Thanks for reading! :thanks:
 
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Scarfinger68

New Member
:welcome:

Hi! So, I'm an economist, which means I think about things like money, time, return on investment, etc. a little bit different than most people - that is, formulaic-ly, rather than emotionally (my colleagues might say 'correctly' vs 'incorrectly', but that's kind of arrogant, yes?). Anyhow, I thought I would lay out some of the economics - as in the classical sense - behind starting a new grow. In doing so, I hope I allow people to understand what is the best way they can maximize their investment, and to not get discouraged and to stick with growing.

To start, I think we should dispel a major myth:

the horridly incorrect "rule of thumb" that an efficient grow achieves 1 gram/watt. This is very easy to disprove - say you have 2 methods of growing, method A and method B.
*Method A costs $25/month, and gets you .5g/watt;
*Method B costs $100/month, and gets you 1g/watt.

Which should you choose? Well, assuming you can afford both methods, you should choose method A, and run 4 of them in parallel - this would get you 2g/watt/dollar, as opposed to 1g/watt/dollar using method B. If you know anything about math, you'll also see we can cancel the watts from our units of comparison, and we end up with the factor g/$ spent.

This is a MUCH better metric for growing efficiency than g/watt - and, in fact, when you start looking at grows in the grow journals through the lens of grams/$ spent, as opposed to gram/watt, you start to see why so many people swear by their CFL or LED set-ups. Someone can get 75 grams of weed for $20/month in electric bills over 3 months - so, for the equivalent of $60 in a 3 month grow, you get ~2.5 oz of weed; taking the going (Massachusetts) rate of ~$300/oz of primo herb, that's a final grow valued at $750. In other words, those poor producing, weak CFL grows can give an ROI of 12.5 to 1! Compare that with a typical HID grow, which in the same space and time might result in a harvest of 125 g , but with a cost of almost $40/month to operate - a crop valued at $1300, which gives you an ROI of 11 to 1. The CFL has a better ROI ratio, while carrying less risk; less risk of fire, less risk of exposure to the authorities, etc. That is not to say CFL's are better than HID's, per se - only that there is more involved in the economics of the choice than g/watt.

So, we've established that a better metric of the returns on growing are grams/dollar. How do we calculate what is the most effective rate of return for our material? I'll use my grow-set up as an example:

* Mars II LED Grow Light 1200W, $450.
* Grow Tent 3' 3'' x3' 3'' x6'', $100
* 6 inch In-Line Fan 400 CFM, $80
* Carbon Filter, $75
* Fan speed adjuster, $20
* Growology nutes, $60
* 2 black widow grow buckets, $100
* ph kit, ph meter, tds meter, comes in a bundle, $50
* 10 lbs hydroton, $10
* rapid rooters, $10

Total cost: ~$1,000

This gives a grow tent with 3' x3' x6', in a DWC/SCROG grow under a large LED light with a real-world draw of ~535 watts. Going seed to smoke, two plants in this set-up will generate anywhere from 6 - 16 oz for me, depending on time of year, how much attention I'm paying, luck, strain, whether I'm trying anything new, etc. Let's take somewhere in the middle and say 11oz per grow is my average. (Note: the point isn't that my setup is the most economically efficient - I overpaid for the black widow buckets, for example, out of pure laziness - the point is just to get items and prices we can use in a formula).

So, the start-up cost of my grow is $1000. From seed to smoke takes me about 16 weeks; about 6 weeks germination/veg, and about 10 weeks flower (I should really put together a grow journal sometimes soon). I smoke, on average, about an oz/month. So, assuming 16 weeks = 4 months, then while I'm growing, I am "spending" 300/month smoking weed that either (A) I bought, at $300/oz, or (B) weed I grew that I could be selling at $300/oz, were I a dealer. So whether we're talking actual cost, or opportunity cost, the cost of my grow increases by $300/month in weed cost - over the course of a 4 month grow, we are now at $2,200.

But there's electricity, too! My LED draws at 535 watts - my electricity cost, here in Taxachusetts, is $.15/kwh. So, during veg, running at 18 hours a day, I spend about $45/month on electricity for that massive Mars LED (15 cents and hour times 18 hours a day * 31 days per month, divided by 1000 because I'm billed in killowats, and not watts). In flower, using the same formula, I pay about $30. So, in electricity, I pay about $135 over the course of a 4 month seed to smoke grow (it's less expensive when I use clones, but for most people starting up, their first grow will be with seeds, so I'm using that for this example).

So, all in, our first grow has a total outlay of about $2300. To get a positive ROI in our first grow, we need to grow about 8oz weed - (8oz * $300/oz = $2,400); anything less than that, and we're better off buying weed, rather than smoking it! So, how likely is it we can do that?

Well, where that aforementioned awful rule of thumb of 1g/watt comes from, is that on average, 100 watts/square foot of space will net 1g/watt of weed. No, a 150 watt HPS in a 1x1 tent would not net the average grower 150 grams; there is a point of diminishing returns at both the lower and upper bounds. But in general, this rule holds. So, to figure out the average returns of my set-up (and once again, here's where I prove my set-up is sub-optimal in some ways): take light, which is 535watts, and divide it by my 3 x 3 tent, which is 9 square feet, multiplied by the 100 watt/ft^2 ideal: 535/900. You get .594 grams/watt (much less than 1). Now, take that .594 gra,s/watt, and multiply it by my lights true wall pull of 535 watts, and you get 318 grams, or a little over 11 ounces. So the average grower, using my setup, will probably pull in slightly over 11 oz; a stud might pull a pound and a half (and in fact, if you look on YouTube, some people do even better than that). Sometimes I do extra shitty and only get 6 ounces. But on average, I can expect 11 and change. Since I needed to surpass 8 ounces on my first grow to get a positive ROI, I can conclude that this setup is likely to succeed, if success is measured in positive ROI within 1 grow. :cheer:

NOW - let's look at another option: the British Columbia Northern Lights BloomBox. The BloomBox runs $6500 new; when you include taxes and shipping, you're looking at $7,200. I have a friend who runs the bloombox, so I already know it costs just about the same amount to run the BB as it takes to run my grow (BB comes with 400 watt HID and a CFL germie/veg areas). So, your initial outlay for a similar seed-to-smoke BB grow would be $7,200 capital investment + $1,200 weed opportunity cost + $135 electricity over 4 months. Total cost: $8,535. To get a positive ROI at $300/oz, you would need to grow 28.5 oz of weed, or more than 1 3/4 pounds. That sounds awfully tough 0- is it doable? Well, according to the BCNL website, the flower area of 36" width, 28" depth, for a total area of 7 square feet. Using our formula to determine avg grow potential, we take the 400 watt HPS, and divide it by 700 (7 sq ft * 100 watt/sq ft), and we get .57g/watt avg potential. Now multiply that by the 400 watt HPS you have in the box, and you get...228 grams, or a smidge over 8 ounces. We need 28.5 ounces to reach ROI, which means we would need 5 average size grows grows to reach ROI in the BloomBox! Except...each 16 week grow still adds $1335 in expense - the cost of electricity, and the opportunity cost of the weed you smoke, at $300/oz. When you do the math, you realize it takes an astounding SEVEN 16 week grows to reach positive ROI with the BloomBox! 7 * 16 weeks = 112 weeks, or over 2 years!!!

So, in conclusion - do you know why the professionals don't buy BloomBoxes? because they are HORRIBLE deals. You're far better off buying the components I've listed above (or equivalents), paying someone handy you can trust $500 to put it all together for you, and running with that. Pre-built boxes are a SCAM, targeted at new growers who don't know any better.

I hope you've found this helpful - grow big, and grow profitably (whatever "profitably" means to you)! :Namaste: Thanks for reading! :thanks:
the horridly incorrect "rule of thumb" that an efficient grow achieves 1 gram/watt. This is very easy to disprove - say you have 2 methods of growing, method A and method B.
*Method A costs $25/month, and gets you .5g/watt;
*Method B costs $100/month, and gets you 1g/watt.

Which should you choose? Well, assuming you can afford both methods, you should choose method A, and run 4 of them in parallel - this would get you 2g/watt/dollar, as opposed to 1g/watt/dollar using method B. If you know anything about math, you'll also see we can cancel the watts from our units of comparison, and we end up with the factor g/$ spent.
If you don't have the grow room to do 4 parallel grows then this is kind of a mute point. But I get what you're saying.

Well, where that aforementioned awful rule of thumb of 1g/watt comes from, is that on average, 100 watts/square foot of space will net 1g/watt of weed. No, a 150 watt HPS in a 1x1 tent would not net the average grower 150 grams; there is a point of diminishing returns at both the lower and upper bounds. But in general, this rule holds. So, to figure out the average returns of my set-up (and once again, here's where I prove my set-up is sub-optimal in some ways): take light, which is 535watts, and divide it by my 3 x 3 tent, which is 9 square feet, multiplied by the 100 watt/ft^2 ideal: 535/900. You get .594 grams/watt (much less than 1). Now, take that .594 gra,s/watt, and multiply it by my lights true wall pull of 535 watts, and you get 318 grams, or a little over 11 ounces. So the average grower, using my setup, will probably pull in slightly over 11 oz; a stud might pull a pound and a half (and in fact, if you look on YouTube, some people do even better than that). Sometimes I do extra shitty and only get 6 ounces. But on average, I can expect 11 and change. Since I needed to surpass 8 ounces on my first grow to get a positive ROI, I can conclude that this setup is likely to succeed, if success is measured in positive ROI within 1 grow. :cheer:
This is where you got my attention. Figuring out how much weed you would smoke/buy and determining if your grow style/set up can produce that amount verses the cost of just buying the weed. The break even point. I like that very much. I need to figure that out for myself.

Thanks for the post.
 

Sonora

New Member
If you don't have the grow room to do 4 parallel grows then this is kind of a mute point. But I get what you're saying...This is where you got my attention. Figuring out how much weed you would smoke/buy and determining if your grow style/set up can produce that amount verses the cost of just buying the weed. The break even point. I like that very much. I need to figure that out for myself.

Thanks for the post.
Thanks! As you pointed out, space is itself a resource, much like money, or cost. Sometimes the maximum yield in measured in gram/$ will be the one that makes the best use of limited space. Great comment!


Check my diy in my sig. You can build your own cabinet and save lots ;-)
I agree with you though - bang for the buck is what it's all about.
You're right - however, I tend to think the people who would buy a prebuilt cabinet are people who are either unskilled in hands-on DIY activities, and lack confidence (or tools!) to make one themselves, or (B) lack time. In these cases, DIY instructions aren't generally much help unless they're targeted super, super low (like jr high woodshop level, with explicit material lists and costs).

I'm barely handy at all - I can assemble a chair bought from Ikea, but I couldn't assemble a DIY cabinet; for me it's a better deal (given the value I place on my time) to buy a grow tent; $100 is a pittance when compared to multi-hours with wood, hammer, and drill.
 

Scarfinger68

New Member
Cost of grow: gram/$

VEG: 200 watts @ (24 hrs x60 days)x .128 per kilowatt/hr
.2 kW x 1440 hours = 288 kW per hour x $0.128 kW/hr = $36.86
2 Month VEG = $36.86 (18.43 per month)
----------------------
Flower: 600w light + (fans 115w + 80w +90w LED)= 795 watts (12 hours x 70 days)
.885 kW (x) 840 hours = 743.4 Kw per hour @ $0.128 Kw/hr = $95.15

Total Cost: Veg + Flower = $36.86 + $95.15 = $132.02 cost per grow

Total grams: 150 grams estimated / $132.02 = 1.14 gram/$

To buy weed estimated 28 grams / $300 = 0.093 grams per dollar

My grow: 150 grams /$132.02 = 1.14 gram/$

1.14g/$ – 0.093g/$ = (+1.043) grams in the black

So I can grow a lot more weed cheaper than I can buy it. My calculations don’t take in to account start up cost. I don’t really now the break even point either. But, … I do know it is cheaper to grow weed than to buy it so I should break even eventually. :)

PS: Also I didn't include cost of soil, fertilizers, seeds, and initial start up cost which would give a more accurate cost/break even point

PSS:
Or..it cost me $24.56 per oz. to grow my weed vs. $300 per oz. to buy
 
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iwltfum

New Member
I wish it could be that simple for me sonora, but I have a couple questions for you, being the economist among us. When you've paid off your initial costs, you can rule those out of the equation right? In that case, you would just be spending money on nutes and electricity so your cost would go way down.

My initial setup alone cost me 5 times what I spend per month on the supplies and electricity (and that's assuming I throw half-full bottles of nutes away at the end of the grow, which I don't) so now that I have paid myself off from original investment, my gram/dollar spent is considerably more and my break even point is much lower.

So originally my break even point was .5 grams/watt, but now that I'm not thinking about start up costs, the break even point is .33 grams/watt.

Another way to think about it is to include the time you spend working on the grow for the whole cycle and add that into the equation OR think of your harvest in terms of grams/hours, which would leave you with dollars/hour depending on how you value your herb.

about 6 grams/hour for me, so, minus running cost (and in an imaginary world wherein I needed to sell my pot), my plants would pay me about [9dollars/hour]/plant.
Looking at it this way, you realize, if you increase the number of lights (with an equal available footprint) by a factor of 2, you might only increase your hours spent by a factor of 1.5 or maybe even less, but you would theoretically be producing 2 times as much, so you hourly wage would have gone up by a factor of 1.25? (I'm not sure if my math is correct on that) This number goes up considerably as you increase the number of lights because it takes less time per plant to keep up with alot of plants vs just a couple.
 

Sonora

New Member
I wish it could be that simple for me sonora, but I have a couple questions for you, being the economist among us. When you've paid off your initial costs, you can rule those out of the equation right? In that case, you would just be spending money on nutes and electricity so your cost would go way down.

My initial setup alone cost me 5 times what I spend per month on the supplies and electricity (and that's assuming I throw half-full bottles of nutes away at the end of the grow, which I don't) so now that I have paid myself off from original investment, my gram/dollar spent is considerably more and my break even point is much lower.

So originally my break even point was .5 grams/watt, but now that I'm not thinking about start up costs, the break even point is .33 grams/watt.

Another way to think about it is to include the time you spend working on the grow for the whole cycle and add that into the equation OR think of your harvest in terms of grams/hours, which would leave you with dollars/hour depending on how you value your herb.

about 6 grams/hour for me, so, minus running cost (and in an imaginary world wherein I needed to sell my pot), my plants would pay me about [9dollars/hour]/plant.
Looking at it this way, you realize, if you increase the number of lights (with an equal available footprint) by a factor of 2, you might only increase your hours spent by a factor of 1.5 or maybe even less, but you would theoretically be producing 2 times as much, so you hourly wage would have gone up by a factor of 1.25? (I'm not sure if my math is correct on that) This number goes up considerably as you increase the number of lights because it takes less time per plant to keep up with alot of plants vs just a couple.
So I think it's true that on a long enough timeline, growing will always end up being cheaper than buying, at least at current market costs. For me, the question is one of efficiency, and ROI. Let's say you were a business - most of the time, you're looking to maximize your ROI on a fixed horizon. I would argue that we can't reasonably predict what the market for weed will look like 2 years from now; given the crumbling state of prohibition in the US, and reduced law enforcement efforts around it, we're seeing the market in flux as demand overtakes supply, causing a surge in supply as new growers try to get in on the high profits, causing a fall in prices, in a cycle that's in flux right now. Private equity is getting involved in the marijuana business - Colorado, Washington, Oregon, and California all have multibillion legal weed industries. It's reasonable to expect that at some point, weed prices will fall to the level of tobacco prices as more growing space is allocated to the former away from the latter due to surging demand. So any investment made with a time-frame of greater than 2-3 years seems to me to be unsound - there's too much future ambiguity. So ultimately, from a purely economic perspective (which is not the only way of looking at this, mind you) - the best setup is one that maximizes your ROI over 2-3 years. If I make a positive ROI over 1 grow 16 week, then over 2 years I will have an ROI of about 17, since my first grow paid for my start-up costs. If it takes you 5 grows to make positive ROI, then my grow is 17x more efficient than yours, over the time-frame in reference.

You can't really talk about ROI unless you place a time boundary - since theoretically I could take a loan of a hundred million dollars and create a weed output factory that might not get me positive ROI for 50 years, but after that makes me a billionaire.

Additionally, there are costs outside of financial costs - as was stated above, space is also a resource, so sometimes adding more lights isn't feasible. Additional lights tends to mean more heat and higher electric bills, which means more risk of law enforcement attention. Finally, surplus weed is itself a problem; businesses don't want inventory for a reason; it's expensive. You may not think weed ina jar in your cupboard costs you money, but it does - storage space, as well as legal risk. The most efficient factory is one that produces product at the same rate as it ships it (so-called "Just In Time" factories). Likewise, the most efficient grow is one where your consumption and production rates are at equilibrium.
 

iwltfum

New Member
So basically, as your investment goes up, your return goes up (assuming you can handle an increased amount of plants without having to recruit and possibly pay someone to help you). But as the market deflates, your return would go down. With a changing market, you can't know where your break even point will be in a year or two. it might end up being more expensive to grow your own compared to buying it. I would still be worth it for me to know exactly what was used in and on my plants rather than just trusting some huge corporation with my health and safety.

I don't know if the market will ever realize this (I hope it does), but there is something to be said about weed that costs the same as tobacco. I don't think there is any way that a company could produce such a cheep product without loosing a huge percentage of potency and overall quality.

Indoor grown weed will always have a cap on how low people can price it, because it costs so much more for the grower to produce compared to outdoor weed. The question is, will people be willing to pay more for indoor weed when a pack of 20 joints from marlboro is 5 bucks. If not, you would have to be willing to pay more per gram than it would cost at the store in order to grow your own inside.
 

Onamatopeia

New Member
I thought a fair bit about this recently, as I just set up my first indoor grow.

I ended up spending $800 on lights, tent, soil, etc. My setup draws 300 W in veg and 375 in flower, plus 50-100 Watts for some small fans, etc. I calculate power to be about $ 0.50- 0.60/ day. My grow looks like it will take about 13-14 weeks total, lets say 14.

In that time I usually smoke about 3/4 Oz/ month at a prorated rate of $400/ Oz. So spending about $1000 for weed.

For my first grow to pay for itself fully, I would need to recoup the $800 on equipment, approximately $50 for power and $1000 for the weed I smoke during the grow. So, $1,850 worth of weed. In my area, that comes out to 4 and 5/8 ounces.

Going forward, each grow will cost me approximately $50 in power usage plus whatever I spend on new soil (say $50), nutes ($20-40), and anything that breaks. So future grows will be ridiculously cheap in that literally 1/2 ounce would pay for the items listed above.

Really, though, my goal is just to grow enough I don't spend any money on weed, just supplies. I figure I can do 3 grows per year. I want an ounce per month supply. So really I need 4 oz per grow to supply myself. At that point the economics will be I spend $100 three times a year to buy my grow supplies and that's my total expenses.

In terms of ROI, nobody really needs to pay for everything off their first grow. That's not how most of us are measuring things. Most of us I think want to maximize production and that's it. So costs are not necessarily the overriding factor.

Honestly, my thinking was not about ROI. It was: can I spend the money to do a garden setup and still buy weed until my first harvest? The thinking being that, once I get my first harvest, this grow will more than pay for itself. And then it will be easy street as my supply will come from me.

The ROI stuff is for people who are in business. For the rest of us, I think, it is just getting a solid means of production.

But absolutely cost on the market is a huge factor. If weed cost, say, $100 an ounce, there's no way I would go to all this trouble!
 

Onamatopeia

New Member
In Colorado I hear the weed is getting cheaper and cheaper, and much can be had for $200/ Oz. Just for fun, I want to redo my calculations because it is a big difference.

Right now I pay 50/ per 1/8th. So, 400/ oz.

My above calculations were $1850 expenses, so 4 and 5/8 ounces to break even.

If it cost $200/ Oz, and I smoked an ounce per month (what I would smoke if I could afford it), my expenses for the same grow would be about $1450. At 200/ Oz, I would need to grow 7 and 1/4 ounces to break even.

And if it cost $100/ Oz, I would need to grow about 11 and 1/2 ounces to break even. And at $100/ Oz I am only spending $25 per week at full retail, and I am no longer feeling the need to grow!

Here's another way to look at it:

Currently, my grow equipment cost about what 2 months of my ideal supply would cost. If it cost $100/oz, I would be spending the money for 8 months supply.

I really think that somewhere between $100 and $200 per month is a line, and below that line a lot of people would rather just go buy it than grow it themselves.
 

Marzbadrock

Plant of the Month: Sept 2015 - Nug of the Month: Jan 2016, May 2018
Damn prices are expensive, here in Montana you can't find anything over$240 a ounce, mostly going for $180 a ounce. This is premium smoke too. Between electric costs, nutes, dirt, bulbs, im looking at $300 per grow. With 600 to 700 grams per harvest, im not complaining one bit! Great thread here, love reading on economics of things.
 

iwltfum

New Member
In Colorado I hear the weed is getting cheaper and cheaper, and much can be had for $200/ Oz. Just for fun, I want to redo my calculations because it is a big difference.

Right now I pay 50/ per 1/8th. So, 400/ oz.

My above calculations were $1850 expenses, so 4 and 5/8 ounces to break even.

If it cost $200/ Oz, and I smoked an ounce per month (what I would smoke if I could afford it), my expenses for the same grow would be about $1450. At 200/ Oz, I would need to grow 7 and 1/4 ounces to break even.

And if it cost $100/ Oz, I would need to grow about 11 and 1/2 ounces to break even. And at $100/ Oz I am only spending $25 per week at full retail, and I am no longer feeling the need to grow!

Here's another way to look at it:

Currently, my grow equipment cost about what 2 months of my ideal supply would cost. If it cost $100/oz, I would be spending the money for 8 months supply.

I really think that somewhere between $100 and $200 per month is a line, and below that line a lot of people would rather just go buy it than grow it themselves.
200/oz is expensive in the part of colorado that I live. 180/oz is pretty much the highest prices that I find. Still, Rec shops are selling their 8ths for 60 somehow. I doubt prices will drop lower than 140/oz because everyone in the industry would loose alot of money and everyone knows it. Which is why, when the price drop happened a couple years back, it basically stopped in the mid 100's. 4 years ago, 225/oz was a good price for some premium. I believe an oz at most rec shops will run you 300-400 bucks, if you can find a private grower or caregiver to supply you for a good price, then you might be better off just buying from that person, plus you're keeping your money local that way. Which is always a good idea! But it IS fun to grow your own and it's also very therapeutic and stress relieving in my opinion. So in terms of preventative treatment, you might live a healthier life if you continue growing, even if you do end up spending a little more in the long run.

EDIT: Plus, you never know what's in it or on it when you don't grow it yourself. I'm almost embarrassed to say this, but I know several big time growers that use serious toxic chems on their plants to keep mites and mildew at bay DURING BLOOM. I don't even like to put my fingers on their herb that ends up getting distributed throughout the state and smoked by unknowing people
 

J189RFC

New Member
Well if you don't like having as much of your money and as much of your smoke as possible, then don't think of it as a business. I both envy and am sad for business people. It gets to a point where you start creating spreadsheets and ledgers for food cost. For no reason other than compare and contrast and to have a monthly expenditure report... ugg.

As soon as I've "Paid off" my equipment I write it off. If I was smart I would depreciate it. Taking 50% of the items totaly costs over a 2-3 grow period. Sure it sounds like artificial inflation of returns, but in my opinion it seems more reasonable to slowly use the investment over a bunch of grows instead of the first one. Especially if you add your weed costs right into that.

(EDIT) Sorry I roughed in all my math cause..... it's saturday and I'm lazy right now?)

So 2x 300 Mars Hydro $350 Dep at 33% 117.5
Carbon filter and fan $250 Dep at 50% 125
Misc nutes, soils, poly, tape $100 Not dep First grow 100% dep
Misc electronics $100 Not dep, first grow 100%
Re stocking cost for nutes and soil etc $50 every grow
4 Months of elec and time $10/m 40$
Rough expenditure for first grow 450~ Fixed weed cost 4 oz over 4 months @ 200/oz 800
Rough expenditure for second grow 350~ Fixed weed cost 4 oz over 4 months @ 200/oz 800
Rough expenditure for 3rd grow 200~ Fixed weed cost 4 oz over 4 months @ 200/oz 800
Rough expenditure for 4th 90~ Fixed weed cost 4 oz over 4 months @ 200/oz 800

This is of course if nothing breaks.
This system also means that to break even or to have a profit I can either grow less and less OR make more and more "profit"
Oz per grow to break even
1st = 6.25
2nd= 5.75
3rd= 5
4th= 4.5
If all the grows are near identical and I was able to meet my 1st goal I would need to grow ~187g or approx .5g/w of light. So lots of room for improvement.
All this just to show there is different ways of looking at business/growing and the economy of. Even with the most basic set up you can easily get over the investment cost, as long as you are aware and look for ways to increase your g/$ either through density, perpetual system etc. Imagine I used a 90w LED as a veg area BLAM! I double my profit instantly because I would use an extra sq/M of space,negligible elec costs and would save myself about 1.5 - 2ms every grow.

Ugg.... I could write a couple more paragraphs easy, but thank you Sonora! I did your calcs and glad that people occasionally think of these things. Let me know what you think about the idea of depreciating items slowly vs applying them to every grow/first grow.
 

Sonora

New Member
Ironically enough, I just got hold of a used BloomBox after moving back to AZ, so I'm now going to be able to put my theory to the test. And it turns out my pricing was way off - a new BloomBox is more like $3500, not $6500, so a BloomBox is a much better deal that I first thought. Considering the time to assemble a box for the average Joe (assuming a $15/hr salary and 8 hours to assemble a cab), I think a BloomBox is looking more and more like a positive ROI option. We'll see - a journal is forthcoming!
 

uptheholler2

New Member
Hey Sonora I cant believe that it took me so long to find this thread. I am a 40 year plus farmer and weed grower. That means I am a skin flint....a penny pincher....a tight wad. All labels that I wear with pride. I constantly work with friends and neighbors to come up with more cost effective methods to supply their own medicinal and recreational needs. I always run with the idea that any grow system should pay for itself in 2 runs to make it affordable to most folks. I live in Appalachia and cash is tight. I have helped many people set up grow rooms in old discarded walkin coolers. They are heavily insulated and most come with lockable doors for security. Since they are heavily insulated they can produce in most weather conditions even in hot summer weather and cold winters. I have recently begun construction of a grow room using Structural insulated panels (SIPs). I think that these may revolutionize cost effective grow room construction. They are already revolutionizing home construction. Resulting in up to 35% savings per square foot over conventional constructional techniques.

I also always discuss with people to consider their personal budgets. One of my huge issues with the sustainable agriculture folks comes with the income side of the equation. If you don't make a profit then there simply is no sustainability. So therefore some of the green ideas from folks who have never turned soil for a day in their lives are simply not truly sustainable. This is true in weed grows also. I always encourage folks to answer some personal questions about their own lifestyles and financially what they can afford to both buy and operate. When we have shortcomings I help them source products at a cheaper cost or discuss methods to operate a system at a lower expense. ( Incidentally I never suggest theft of electricity as a way of accomplishing this. It's that pesky little Christianity thing) I do have several tricks that they can use to harvest a good quality crop at a cost that fit's into both their budget and life style.

I often find that by the time that I am done with my evaluation that we have come up with a common sense alternative approach that allows them to grow what they need on a yearly basis without attracting unwanted attention or unsustainable trains upon their families budgets and lifestyles.

Some of the things that I consider are not even expense related but are reality based questions. Questions such as, "What are your consumption needs?" What amount of personal time do you have to tend your crop?" What are the legal restrictions in your state? This last question I take very seriously because I always encourage folks to keep their plant totals in the misdemeanor categories. I have traveled to Illinois, Ohio, Indiana, West Virginia and Ohio helping folks attend to their own needs in a responsible discrete cost effective method.

I really encourage you and appreciate your efforts to bring out of the darkness the economic side of sustainable cultivation. In todays increasing trend of mining the miners I applaud you. Best of luck in all you grow!
 

uptheholler2

New Member
Hey Baron! It's the most enjoyable hobby in the world..all gardening is! You can't really count on a certain harvest or gram per watt. Any farmer will tell you don't count on a crop till the money is in your hand! And the personal reward and fun.......Priceless!
 

BonzaSeedBank

New Member
The most fun part is putting in the sweat and labor of it, seeing your creation come to life in front of your eyes, and then the end product of course. All these are events are priceless in my eyes.

David
 

Sonora

New Member
i also factor in the 'enjoyment' i get out of the grow itself. almost therapy
There's a form of economics called normative theory which tries to find ways to calculate the net benefit of pleasure less suffering, so that you can do deeper ROI calculations than simple dollars over time. It's most famous for the school of Utilitarianism - that is, the net good of an activity is measured in the utility it brings those involved. Profit then becomes simply a form of utility.

Unfortunately, we tend to be a math-centric bunch, and there's not a lot of hard math in Utilitarianism, so it faded as a school of serious thought.

Economics lesson o' the day.
 

Auggie

New Member
I too am formally educated in Economics. I have an undergrad degree in Managerial Econ - which is the 'art' of maximizing assets to produce the optimum amount of return. Easy enough to understand. I also have a degree in Marketing ... quite a mix eh? LoL

I am also a clone farmer. I turn out several thousands of babies a month, and my season is JUST beginning.

I clone using Oasis cubes, a quarter of an aspirin per gallon and potassium in Ph'd water. Simple. Cheap. I have tried many other methods. A collective owner client was in my garden the other day and she asked me what my percentage of successful sprouts were per sheet of cubes. I honestly told her that it was between 75% and 80% depending on genetic. She pointed out that she gets close to 99% and that if I changed a few things I might too.

I asked what those few things were and they added up to an additional cost in materials and time that took it outside the ring. It just wasn't worth what it would cost. If something only costs fifty cents more to make, and you make a thousand of them ... you've spent $500. Then the question is .. is it worth $500 for me to make an extra 50 clones which I sell for $300. Nope.

AND THEN there was last week; it was rainy and cold, windy. Awful weather. But, I got to go to work in a tropical jungle. Well lit, 78 degrees, 40% rh, oxygen rich, rocking to Pink Floyd, Steely Dan, ... When I went in to work I was stiff and sore, my arthritis really hurt. After working for an hour I sat down and leaned back with a cup of coffee and thought "Damn, I like my life." What else do ya want for a place to work? How much is that benefit worth?

To me ... priceless.

And THAT is why I left the corporate world; because I see value in things not taught in business school.

~ Auggie ~
 
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