Marijuana Business Factbook 2019

197 © Copyright 2020, Marijuana Business Daily , a division of Anne Holland Ventures Inc. You may NOT copy this Factbook, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call (720) 213-5992, ext. 1. Financial & Operational Data: Wholesale Cultivators | Chapter 3 MJBIZDAILY.COM Experienced marijuana business owners caution that as cannabis becomes a commodity, the value of a company is more dependent upon brand reputation and products offered than price. Value- added production ― such as sustainable and organic production ― could emerge as key market segments similar to food markets. There will likely always be a market for low-cost and value segments within the cannabis landscape. There may be an immediate opportunity for growers to specialize in and provide low-cost cannabis. However, in a future where marijuana is legalized at the federal level, all but the largest and most efficient cultivators may be squeezed out of the market for value cannabis. If large-scale retailers such as big-box stores and grocery stores are able to sell cannabis in the future, it is likely that these outlets would compete on prices that small-scale producers could not match. WHOLESALE CULTIVATION KEY FINANCIAL METRICS CHART 3.14: Wholesale Cultivator Median Annual Revenue & Operating Costs By State Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Wholesale Cultivator Median Annual Revenue & Operating Costs By State $0.0M $0.5M $1.0M $1.5M $2.0M $2.5M $3.0M $3.5M Nevada California Washington Oregon Rhode Island Michigan Illinois $3,000,000 $1,800,000 $1,700,000 $860,000 $627,000 $455,670 $300,000 $390,000 $250,000 $240,000 $170,000 $135,000 $100,000 $60,000 Median Revenue Median Operating Costs Cultivation costs and revenue vary significantly from state to state, depending on financial barriers to entry. Operating costs are impacted by key metrics such as real estate rents, labor, energy and water, while revenue depends upon state demand and competition. Generally, the smaller medical marijuana markets offer less revenue potential than larger states and states with both recreational and medical sales.