Marijuana Business Factbook 2019

198 Marijuana Business Factbook 2019 Chapter 3 | Financial & Operational Data: Wholesale Cultivators © 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. Nevada: Survey respondents in the Silver State reported the highest median operating costs but also the highest median revenue. Nearly all grow operations in Nevada are indoor or greenhouse because of the state’s dry, hot climate. All responses to our survey were from indoor cultivators , which is likely reflected in the high costs of operation. Until recently, the state had limited licenses available and, coupled with Nevada’s booming tourist economy, this has allowed most growers to remain profitable. California: Golden State respondents exhibited the second-highest median revenue but the most favorable ratio of median revenue to median operating costs. More indoor growers from California responded to the survey than other grow types, while the balance of respondents was split between outdoor, greenhouse and combination (outdoor/greenhouse) grows. More than half of growers indicated 2018 revenue greater than $1 million, while one indicated revenue in excess of $10 million, demonstrating that cultivation in California can be quite profitable ― especially for large operations. However, the business climate in California is still very much in flux as the state continues its transition to legalized adult-use marijuana. Oregon: The impact of Oregon’s oversupply issue is clearly illustrated by comparing median revenue and operating costs. Median costs outstrip median revenues by $90,000. No growers responding to the survey indicated their business was profitable in 2018, and several recorded no revenues at all over the course of 2018. Rhode Island: Wholesale cultivation is a relatively new license type in Rhode Island, as previously the state had only three vertically integrated licensees. (Dispensaries are still required to be vertically integrated, although they are allowed to purchase from stand-alone cultivators.) Rhode Island is a relatively small market, and most cultivators are operating around break-even at this point. Michigan: Cultivation licenses granted under the new regulatory scheme are still few and far between, and most growers in the state remain small. Expect more consolidation and more highly capitalized businesses to enter the state in the coming years as the adult-use market comes online. Illinois: The largest players in Illinois are vertically integrated businesses, while wholesale growers supply a relatively small number of retailers and processors at this point. This could change in the near future as Illinois recently began to allow doctors to recommend MMJ as a substitute for opioid painkillers. Adult-use marijuana could be a huge boon for wholesale growers in Illinois as well, something newly elected Gov. B. Pritzker has promised to deliver.