The Top Costs You NEED to Know for Growing Cannabis Legally

Dec 16, 2020 | Small Cannabis Business

So you want to build a cannabis grow setup? While the rewards of cultivating crops are certainly worth the work, it’s not a new venture you can just leap into easily. But, with a little help and upfront knowledge, it’s certainly less confusing.

The first thing you’ll need to begin growing green – is green. Growing cannabis legally obviously takes money to get started, but just how much? We’ll answer this important question and more, in our in-depth guide on grow room set up costs.

Securing a License & Location

To be a legal cannabis grow, first, you’ve got to secure your license which requires a location. This is the first and foremost cost to start a grow operation. Especially, because it’s one of the most costly.

To give you an idea, here’s a breakdown of the annual initial costs it could take to become licensed State to State:

  • Alaska – $1,000 – $5,000+
  • Arizona – $10,000+
  • Arkansas – $100,000+
  • California – $135 – $77,000+
  • Colorado – $1,100 – $5,000+
  • Connecticut – $25,000 – $75,000+
  • Delaware – $5,000 – $40,000
  • Florida – $60,380
  • Hawaii – $5,000 – $75,000
  • Illinois – $25,000 – $100,000
  • Maine – $300+
  • Maryland – $6,000 – $125,000
  • Massachusetts – $100 – $25,000+
  • Michigan – $6,000 – $500,000+
  • Minnesota – $20,000
  • Missouri – $10,000
  • Montana – $1,000 – $5,000
  • Nevada – $5,000 – $30,000
  • New Hampshire – $3,000 – $80,000
  • New Jersey – $20,000
  • New Mexico – $10,000 – $30,000
  • New York – $10,000 – 200,000
  • North Dakota – $5,000 – $110,000
  • Ohio – $2,000 – $200,000
  • Oklahoma – $2,500
  • Oregon – $250 – $5,750
  • Pennsylvania – $10,000 – $200,000 (with a proof of liquid funds at $500,000)
  • Rhode Island – $5,000 – $80,000
  • Utah – $500
  • Washington – $250 – $1,480
  • West Virginia – $5,000 – $50,000

With some States requiring multiple licensing fees per grow – hence, the repeated +’s throughout. Individual license types and fees can be easily found on each State’s regulatory agency website so do your due diligence for upfront costs.

One thing to also consider for licensing fees is whether you’ll hire an attorney to assist with the application process and if you can suffice the cost for professional assistance.

Keep in mind that most applications do require a location too. So you’ll likely have to lock-in that cost at the same time.

  • Where do you plan on growing?
  • How much does the lease cost?
  • Are you in a position to mortgage or purchase?

No matter your personal answer to these questions, ensure it’s an indoor grow room set up cost that’s calculated early.

Supply Costs for Setup

Once you’ve got four walls, a roof, and a license in hand – It’s time to calculate the supplies it’ll take to get the crops up, running, and thriving. For licensed cannabis grow setups these are the top categories to consider carefully:

Equipment

For the necessary equipment, lighting is crucial for costs. Not only will you have the light equipment, and bulbs to purchase but you’ll also want to think about electricity use too.

Some lights are more energy-efficient but cost more initially. So ask yourself which is more important for just beginning, or if you can make upgrades later. In general, estimated lighting costs range from:

  • $40 – $600+ for 1-5 plants (more for upgraded systems)

Beyond just lights, you’ll need to decipher how much it’ll cost to install air intake/outtake systems, A/C units, dehumidifiers, or humidifiers depending on room climate. Depending on the amount of space you’re controlling, these items can range in costs from $30 – $250+ individually.

The number of plants you’ll be watering will also determine how much you should spend on watering equipment. For instance, drip irrigation kits start around $150+ or if your cannabis grow set up requires a reverse osmosis system, costs can range from $150 – $1,000.

Supplies

There’s a typical toolbox of supplies that a successful cannabis grow setup has. While the cost per item might seem cheaper than the rest, everything adds up fast, so they’re important grow room setup costs to keep in mind.

  • Carbon Filters and Fan – $100+
  • pH Testing Meter – $20 – $300+
  • Thermometer/Hygometer – $15+
  • Trimmers – $10+
  • Gloves – $10+
  • Electrical Timers – $8
  • Zip Ties, Stakes, Trellising – $50+

Security

Most license applications, require some type of security whether that’s just a locked door, or recording cameras. Regardless of what’s required, you’re going to want to keep your crops safe and secure.

While locks are pretty cost-effective to install, camera systems can range in quality and cost. Expect to pay $150 – $1000+ depending on your preferences.

Green for Growth

Last, but far from least is the green you’ll need for actual growth. The money it will take to get the seeds or clones of the cultivars you’d like to grow, the pots, soil, or medium they’ll grow in, and the nutrients that will help them thrive.

Individually, expect to spend the following for each per plant:

  • Nutrients – $20 – $100+ depending on nutrient schedule or type
  • Seeds – $10 – $20/seed with bulk discounts – packs ranging from $60-$150
  • Clones – $10 – $30+/clone
  • Soil – $5-$50/bag depending on mix or blend
  • Pots – $5-$30/pot depending on material type (fabric, plastic, etc.)

Finally, who will upkeep the maintenance of your grow room setup and what will it cost for their labor? If it’s yourself, you may not be so worried once you see the R.O.I next. But if you can’t manage the labor it takes you’ll want to calculate fair rates to pay employees in your initial grow room setup cost.

What about R.O.I?

Now that you’ve seen the costs that go into a grow room setup, consider the worth that will come out of the crop. Of course, any estimate is going to vary based upon the State and market value, the type of cultivar, quality, etc.

For the most part, per square footage and with a standard wattage of light you can expect a return of:

  • 4.5 to 14 oz with a 400-watt HPS lamp (3.5 x 3.5 x 7 ft. grow room setup)
  • 5 to 21 oz for experienced growers with a 600-watt HPS lamp (4 x 4 x 8 ft. grow room setup)
  • 9 to 36 oz with a 1000-watt HPS lamp (5 x 5 x 8 ft. grow room setup)

The Final Word

By seeing the top costs associated with starting a licensed cannabis grow room set up, you can better prepare your Cannabiz plan and budget for moving forward.

Of course, like in any business, make sure to always leave yourself some room to wiggle. While these are just the starting costs, with cannabis, equipment, water, and electricity combined, always be prepared financially for any issue that could arise as well.

About The Author

<a href="https://www.cannabistherapynetwork.org/author/courtneyt/" target="_self">Courtney Trzos</a>

Courtney Trzos

To Courtney, it’s always 420 somewhere… After attending Michigan State University and working in communications for over 10 years, she took her passion for cannabis, professionally. In 2017, Courtney began freelancing as a writer for cannabis brands across the globe, promoting the therapeutic and recreational use of the plant, while helping her partner cultivate crops full-time, and learning more about the industry from a seed-to-sale perspective. Get in touch with her and follow her journey at https://www.instagram.com/thecannaspace/
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