4 ms·

harborside, the bay area's largest purveyor of weed, recently opened a thousand plus-acre facility in the central valley, it's like any other crop dominated by

by tribby 9y ago

harborside, the bay area's largest purveyor of weed, recently opened a thousand plus-acre facility in the central valley, it's like any other crop dominated by big agriculture nowadays. it's the same people (mostly immigrants) working in every other type of ag in the valley. I have to so I'm surprised by how quickly it has normalized in the past few years. once federal law is sorted I hope it'll be great for the california economy. the cost will drop quickly as a result, and I wonder what that will do to startups in the space. wholesale costs are plummeting but retail seems price-fixed, which is unsustainable when you have enough competition. once retail starts to plummet too -- say we reach a point where 3.5g costs the same as what currently buys 1g -- the value proposition of things like leaf (the IoT grow box) dies, and eaze, meadow, and all the other uber-for-weed startups become too cost inefficient... it seems like a lot of startups in the general weed space are (literally) banking on the fact that prices haven't dropped yet, but I don't think that will last at all.

brianwawok 9y ago
People homebrew beer via kits which is not much cheaper than buying a Sam Adams. You can homebrew cheaply if you guy 50 pound bags of grains but most homebrewers do not.
- linkregister 9y ago
  The market for homebrewing hobbyists is a rounding error compared to the market of beer drinkers.
  - brianwawok 9y ago
    And the market for robotic weed growing machines is a rounding error compared to the market for drugs. So I am not sure you have really disproven my point that weed prices coming down will run robotic weed growing machines out of business?
mschuster91 9y ago
> the cost will drop quickly as a result, and I wonder what that will do to startups in the space. They'll scale massively. Someone has to supply all the states that are one day going to legalize weed - and I believe those who have already much experience in all aspects, from breeding over cultivating to harvest as well as legal and financial challenges, will also be those who will be the fastest to rush into any new open market. Also, they have (literally) wads over wads of cash readily available.
wcchandler 9y ago
I'm in the process of becoming a farmer. Weed is one of the crops I've researched. It could take a ~90% drop in price and still provide a sustainable profit. That's from a cultivators perspective.
- walrus01 9y ago
  This will depend on local regulations if you want to do it totally legit. WA state, for example, still does not allow farms to grow outdoors. It has to be indoors in a controlled-access facility and uses a huge amount of electricity.
  - wcchandler 9y ago
    Oh yeah, that's definitely using my more optimistic numbers. But if those costs are >10% of your costs (post first year) then you should definitely rethink some things. If I shoot for high yield (10 oz), 400w @ 0.17 per kWh * (18 hrs * (7 days * 4 weeks)) + (12 hrs * (7 days * 8 weeks)) = 400w @ $0.17 per kWh * (504 hrs + 672 hrs = 1176 hrs) = 471 kWh * 0.12 = $80.02. That's with Northern Lights which would probably go for $1500 per pound, or ~$900 per plant per season. Electricity (well just light, which should be >85% of your electrical costs) would only account for 8% of the production costs. Infrastructure costs would be amortized and recovered within the first year of full scale operation but just for arguments sake you can source a secure grow inside a $5000 insulated 40' shipping container. Conduit, outlets, panels, grounding, etc. would be $3000 if hired out through Angieslist but if you DIY it, $1000 is feasible. Including a sufficient ~4hr battery UPS. HVAC can then similarly take $1000-$4000 depending on needs and necessities. Totalling out to maybe $15,000? A 40' container would comfortably do 3 seasons of 40 plants in 1 year, effectively taxing each plant $125 for the first year. The yield would be about 75 lbs @ $1500/lbs = $112,500 in year one. As such, each secure building would only cut 13% of your first years profits... or put another way, 14% of your first years plants' expense. Granted, these are just Internet numbers. I can speak more candidly and openly offline, but I reiterate -- all of your expenses should be < 10% for an indoor grow op.

by tribby 9y ago

brianwawok 9y ago

People homebrew beer via kits which is not much cheaper than buying a Sam Adams. You can homebrew cheaply if you guy 50 pound bags of grains but most homebrewers do not.

linkregister 9y ago
The market for homebrewing hobbyists is a rounding error compared to the market of beer drinkers.
- brianwawok 9y ago
  And the market for robotic weed growing machines is a rounding error compared to the market for drugs. So I am not sure you have really disproven my point that weed prices coming down will run robotic weed growing machines out of business?

mschuster91 9y ago

> the cost will drop quickly as a result, and I wonder what that will do to startups in the space. They'll scale massively. Someone has to supply all the states that are one day going to legalize weed - and I believe those who have already much experience in all aspects, from breeding over cultivating to harvest as well as legal and financial challenges, will also be those who will be the fastest to rush into any new open market. Also, they have (literally) wads over wads of cash readily available.

wcchandler 9y ago

I'm in the process of becoming a farmer. Weed is one of the crops I've researched. It could take a ~90% drop in price and still provide a sustainable profit. That's from a cultivators perspective.

walrus01 9y ago
This will depend on local regulations if you want to do it totally legit. WA state, for example, still does not allow farms to grow outdoors. It has to be indoors in a controlled-access facility and uses a huge amount of electricity.
- wcchandler 9y ago
  Oh yeah, that's definitely using my more optimistic numbers. But if those costs are >10% of your costs (post first year) then you should definitely rethink some things. If I shoot for high yield (10 oz), 400w @ 0.17 per kWh * (18 hrs * (7 days * 4 weeks)) + (12 hrs * (7 days * 8 weeks)) = 400w @ $0.17 per kWh * (504 hrs + 672 hrs = 1176 hrs) = 471 kWh * 0.12 = $80.02. That's with Northern Lights which would probably go for $1500 per pound, or ~$900 per plant per season. Electricity (well just light, which should be >85% of your electrical costs) would only account for 8% of the production costs. Infrastructure costs would be amortized and recovered within the first year of full scale operation but just for arguments sake you can source a secure grow inside a $5000 insulated 40' shipping container. Conduit, outlets, panels, grounding, etc. would be $3000 if hired out through Angieslist but if you DIY it, $1000 is feasible. Including a sufficient ~4hr battery UPS. HVAC can then similarly take $1000-$4000 depending on needs and necessities. Totalling out to maybe $15,000? A 40' container would comfortably do 3 seasons of 40 plants in 1 year, effectively taxing each plant $125 for the first year. The yield would be about 75 lbs @ $1500/lbs = $112,500 in year one. As such, each secure building would only cut 13% of your first years profits... or put another way, 14% of your first years plants' expense. Granted, these are just Internet numbers. I can speak more candidly and openly offline, but I reiterate -- all of your expenses should be < 10% for an indoor grow op.