‘The Economics of Cannabis’ Keeping Weed Company CFO Up At Night

…it turns out that trying to make a profit in this business is harder than expected. When grown and sold legally, marijuana can be an expensive proposition, with high startup costs, a host of operational headaches and state regulations that a beet farmer could never imagine. In Colorado, for example, managers must submit to background checks that include revealing tattoos. The state also requires cameras in every room that has plants; Mr. Klug relies on 48 of them. Prices for pot, meanwhile, have plummeted, in large part because of growing competition. And bank financing is out of the question: Federal law doesn’t allow these businesses, and agents sometimes raid growers even in states where it is legal…Another outfit, La Conte’s Clone Bar & Dispensary, formed a partnership with another marijuana firm to share some costs. But it produced a profit margin of only 6% on revenues of $4.2 million last year, according to Chief Financial Officer Jeremy Heidl, who says he considers that an unacceptable return given the financial and legal risks. To expand the business, the firm has branched out to sell everything from smoke-free dispensers to body salves and brownies infused with pot. Still, he says, “the economics of cannabis are so difficult.” [WSJ]

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16 Responses to “‘The Economics of Cannabis’ Keeping Weed Company CFO Up At Night”

  1. guest says:

    Dude, credits and debits totally almost rhyme man. How can you expect me to keep track of all of them

    -CFO candidate #2

  2. Fire Jon Shazar says:

    Pot is a dopey business?

  3. Geoffrey Giraffe says:

    Maybe chocolate covered portabello mushrooms?

  4. Danker_Banker says:

    Competition in the industry is high so it's important to lock up suppliers with joint ventures.

  5. Quant me maybe... says:

    I really don't give a fuck. I just want in. It's an emotional thing. Hate away bitches, but even if you don't smoke, wouldn't it be nice to make a few thousand extra a year doing something agricultural? I mean like in my office — grow lights. Convert a conference room that nothing productive happens in anyway into a grow operation. Imagine the team building opportunities. I can see it now. Me yelling, 'take a break from that P&L model Jenkins! The weed needs to get watered!' Fuck, I'm getting hungry just thinking about it.

  6. Snoop Lion says:

    Puff Puff Pass Niggah

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