Marijuana Business Factbook 2019

220 Marijuana Business Factbook 2019 Chapter 4 | Financial & Operational Data: Cannabis Product Manufacturers © 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. CANNABIS PRODUCT MANUFACTURER OPERATIONAL DATA CHART 4.14: Most Expensive Startup Costs For Cannabis Product Manufacturers: Breakdown By Business Type Source: 2019 Marijuana Business Factbook © 2019 Marijuana Business Daily, a division of Anne Holland Ventures Inc. All rights reserved. Most Expensive Startup Costs For Cannabis Product Manufacturers: Breakdown By Business Type Cannabis Producers/Processors Equipment Real Estate & Renovations Initial Inventory Permits, Licenses & Applications Professional Fees Staffing/Employees Cannabis Processors Equipment Initial Inventory Permits, Licenses & Applications Staffing/Employees Other 41% 36% 5% 9% 5% 5% 31% 31% 23% 8% 8% Percent Of Businesses Launching a cannabis product manufacturing company is an expensive endeavor. The equipment required to extract and process cannabis oil for cannabis-infused products is costly, and operating such equipment requires experienced labor. Some processing and extraction jobs will require a Ph.D. ― and a six-figure salary. Among producers/processors, the most expensive startup costs are equipment and real estate. Producers/processors must purchase not only extraction equipment but also cultivation equipment. They must find a physical location suited for processing and manufacturing cannabis as well as growing it ― or consider separate locations and the increased real estate costs that go with that. For manufacturers focused on processing only, the most expensive startup costs are equipment and initial inventory. Processors must purchase all the raw cannabis they use for extraction. A greater proportion of processors reported staffing and employees as their most expensive startup cost, again relating to the expertise required to extract oil from cannabis. Permits, licenses and applications were identified as the most expensive startup costs by just under 10% of both producers/processors and processors only. This speaks to the hefty fees administered at the state level in some markets, as well as the permitting fees levied at the municipal level.