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.
A company that got turned down for one of the Illinois’ 21 medical marijuana cultivation [click to continue...]
A financial services firm that plans to serve the cannabis industry has secured $2 million [click to continue...]
Alaska marijuana entrepreneurs who want to specialize in infused products or extracts will have to [click to continue...]
With private marijuana use on track to become legal in Washington DC on Thursday barring [click to continue...]
Oregon is facing an interesting question tied to its medical marijuana law: Should evicted cannabis [click to continue...]
Institutional investors will put money into cannabis stocks this year, though many publicly traded MJ [click to continue...]
Alaska Gov. Bill Walker has sent a bill to state lawmakers calling for the establishment [click to continue...]
Canadian stock regulators have a word of warning for those investing in MMJ companies north [click to continue...]
At least half of Minnesota’s medical marijuana dispensaries will be unionized. The United Food and [click to continue...]
Dispensary owners in New York may have a niche customer base to tap when they [click to continue...]
A U.S. investment fund has cemented its second deal with a Canadian cannabis grower this [click to continue...]
Dispensary owners in San Jose, California, are in a dispute with the city over unpaid [click to continue...]
California Attorney General Kamala Harris, who plans to make a run for a U.S. Senate [click to continue...]
Oklahoma and Nebraska aren’t alone anymore in their fight to upend Colorado’s recreational marijuana industry. [click to continue...]