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.
Cannabis entrepreneurs who still hold jobs outside of the industry should proceed with caution. Many [click to read more...]
Dozens of Oregon communities are declining to roll out the welcome mat for medical marijuana [click to read more...]
Washington State has issued its first recreational cannabis license, paving the way for retail marijuana [click to read more...]
New Jersey’s three operating dispensaries can adequately meet current demand for medical cannabis despite complaints [click to read more...]
Home growers in British Columbia may escape Canada’s impending ban on grow-it-yourself marijuana. Politicians and [click to read more...]
Hundreds of entrepreneurs have applied for dispensary licenses in Oregon over the past two days, [click to read more...]
Medical marijuana has taken another step toward mainstream acceptance: It is now being advertised on [click to read more...]
People are still lining up around the block to work in Colorado’s recreational marijuana industry. [click to read more...]
New Mexico is considering a plan to boost the number of cultivation licenses significantly and [click to read more...]
Angel investors are flocking to the marijuana industry. The ArcView Group – which connects wealthy [click to read more...]
It appears there could be some truth to allegations that the largest marijuana provider in [click to read more...]
Mayors in Washington State want a cut of marijuana tax revenue, because they believe the [click to read more...]
A dispensary applicant in Massachusetts has filed a lawsuit alleging the state’s Public Health Department [click to read more...]
San Diego has finally paved the way for medical marijuana dispensaries, though it will cap [click to read more...]