Rhode Island Projections Shed Light on Dispensary Startup Costs, Annual Revenues
Want to get an idea of startup costs, revenue potential and other financial data tied to launching and running a medical marijuana dispensary?
Look to Rhode Island.
Documents filed recently by two groups planning to open dispensaries in the state – the Thomas C. Slater Compassion Center and Greenleaf Compassion Center – provide a snapshot of the financial side of the medical marijuana business. The documents feature updated business plans that include everything from expected startup expenses, revenues and breakeven timelines to estimated number of patient visits annually.
The Slater center plans on a relatively large operation with a substantial grow operation, while Greenleaf is going much smaller and is buying its initial cannabis inventory from caregivers.
Here are some highlights from their estimates: (Note – For a detailed overview of financial information and exclusive data about the MMJ industry, check out MMJ Business Daily’s Marijuana Business Factbook 2013, which will be released March 20.)
Initial startup expenses
Slater: $1.6 million, including $660,000 in build-out costs, $500,000 in working capital and $440,000 for equipment
Greenleaf: $120,000, including $56,000 for payroll and $25,000 to purchase 200 ounces of cannabis
Startup expenses during ramp-up
Slater: $1.1 million
Sampling of startup expenses during ramp-up
Slater: Security ($434,375), payroll ($291,120), cannabis growing and processing ($97,200), leaseholding expenses ($73,333), community outreach ($72,842) and utilities ($28,800).
Greenleaf: Payroll ($241,872), leasehold expenses ($50,000), office expenses ($26,130), supplies ($20,800), equipment ($10,088) and consultants ($7,280).
Slater: $1.6 million loan from investor/board member
Greenleaf: $200,000 loan from principals/management team
Revenues in first full year
Slater: $2.6 million (including $2.4 million in cannabis sales to registered patients and $240,800 in sales of paraphernalia and other goods)
Greenleaf: $1.25 million (including $1.24 million in cannabis sales to registered patients and $12,000 in sales of paraphernalia and other goods)
Revenues in second full fiscal year
Slater: $3.9 million, or 50% growth
Greenleaf: $2.15 million, or 50% growth
Breakeven (note: the centers are nonprofits)
Slater: Second full fiscal year
Greenleaf: First full year
Number of patients in first full fiscal year
Number of patient visits in first full fiscal year
Size of center
Slater: 13,750 square feet, including 5,000 for retail cannabis sales and 5,600 for cultivation
Greenleaf: 2,800 square feet
Number of full-time equivalent workers (first full year)
Rhode Island initially approved three dispensary applicants, but the state’s governor halted the program in 2011 over concerns that it conflicts with federal law. Now the program is back on track, and Greenleaf and the Slater center are gearing up to open soon.
Both centers recently submitted changes to their initial applications from several years ago, providing detailed updates to their business plans as required by the Rhode Island Department of Health.
While startup costs and other financial data vary greatly depending on many factors including location, local regulations and the scope of the operation, these projections provide insight into the financial side of an industry where there’s a dearth of such information.
As the impending September timeframe looms for medical marijuana businesses to apply for operating permits [click to continue...]
A medical marijuana vending machine generating plenty of buzz in the media has made its [click to continue...]
The third-largest city in Colorado awarded 21 licenses for cannabis shops on Thursday, paving the [click to continue...]
More good news on the financial front for cannabis businesses: A company that sells self-service [click to continue...]
For four years, the Drug Enforcement Administration has allowed the federal government to grow a [click to continue...]
The Massachusetts dispensary licensing process has evoked the ire of several applicants who feel that [click to continue...]
Florida’s medical marijuana ballot measure will create an overlooked business opportunity: paraphernalia sales. Currently, it’s [click to continue...]
Washington State recreational marijuana shops have had it with the sky-high prices licensed growers are [click to continue...]
Two Canadian cannabis cultivation companies saw their share prices soar on the first day of [click to continue...]
Taxing recreational marijuana sales is a tricky business, as a Denver judge pointed out in [click to continue...]
The town of Port Angeles, Washington, has experienced a marijuana boom in 2014. But the [click to continue...]
Just because Oregon is poised to legalize recreational marijuana in November doesn’t mean everyone in [click to continue...]
A Denver medical cannabis company says it’s “befuddled” by obstacles it has encountered while trying [click to continue...]
Federal versus local control over marijuana. That’s the question at the heart of two lawsuits [click to continue...]