The average Commercial Grow Room Setup Cost is around $42 per square foot. But your cost can fluctuate based on many factors, from building type to workflow design. How can you cash in on this fast-growing industry while keeping your costs low?
We’re breaking down the average startup cost of indoor and outdoor grow operations in the US.
Why a Medical Marijuana Growth Facility?
As the legalization of marijuana has become a hot topic across the states, for medical or recreational use, you’ve more than likely seen hundreds of articles about this lucrative industry. We’re no longer talking about a million dollar industry. Try billions. But before images of ROI dollars begin dancing through your mind, make sure you understand the risks and the commercial grow room setup cost associated with a commercial medical growth facility.
Starting a wholesale cannabis grow room is a substantial commitment. Add licensing fees to the list of expenses you’ll run into. This comprehensive state-by-state guide breaks down the licensing fees associated with a marijuana growing operation in every state. For example, as of February 2019, these were the fees related to licensing in California alone.
Annual license application fees:
Annual license fees:
Should I start an indoor grow room?
Starting an indoor grow house will be your most expensive option. The average cost per square foot for an indoor wholesale operation is about $75, according to Marijuana Business Daily. The reasoning is clear – it will cost you to artificially maintain the ideal environment for cannabis growth. Temperature and humidity control systems and grow lights will undoubtedly make an impact on your grow room startup costs. However, indoor growth comes with benefits. Maintaining control over your growth environment gives you the power to cultivate a higher quality product to sell at a premium price. Additionally, some states like Connecticut and Illinois only issue licenses for indoor grow rooms. Stay on top of your local regulations to see which cultivation type works for you.
How can grow room design impact my overall costs?
When choosing a grow room design plan, you’ll want to keep one word in mind: efficiency. It’s about more than keeping your costs as low as possible. As marijuana continues to be legalized and grow operations pop up across the nation, prices for the crop will drop. Keeping your costs low is the best way to stay competitive in the growing market.
Start with the initial setup of your facility. For example, LED technology can save nearly 50 percent on HVAC costs. For large scale grow rooms, labor efficiency can make or break your overall costs. Follow an obvious workflow to keep travel to a minimum. This example workflow is a great way to ensure that employees follow efficient assembly line protocols. Which drives down commercial grow room setup cost as a result.
Mother Room >> Clone Room >> Trim Room >> Dry Room >> Cure Room
Your building should also be designed to prevent one issue from affecting your entire crop. By having separate rooms rather than one open concept workspace, you can quickly stop a pest or fungus from spreading across your entire crop. Additionally, prefabricated metal buildings are resistant to pests, decreasing your chances of a small bug becoming a much larger problem. Choosing the wrong building materials and design could cost you several hundred pounds in lost crops. When designing your prefab metal grow room, opt for custom walls and sealed doors rather than curtains for maximum protection. Although this will impact your commercial grow room setup cost, you will be happy you did. Your layout can also be custom designed with viewing windows for each grow room and workspace to prevent contaminants from spreading through open doors.
Typical Commercial Grow Room Setup Cost
- Warehouse rent (per year) – $50,000+
- Build out– $60,000
- Growing equipment – $150,000
- Lighting system – $120,000
- Alarm & Security System – $45,000
- Licensing & legal fees – $55,000
- Direct costs (first months before profit) – $200,000
- Administrative expenses – $50,000
- Salaries – $100,000 – $150,000
Total = $830,000 – $980,000
There are many costs, direct and indirect, associated with any Medical Marijuana Growth Facility. The average cost to produce a pound of cannabis between an efficient, well-managed facility and the average grow facility is almost $250 per pound.
What are my outdoor options for wholesale cannabis cultivation?
While outdoor grow operations are not legal in every state, they do come with benefits. Avoiding the initial expense of HVAC systems and lighting lowers your startup costs. Additionally, plants grown outdoors tend to be larger than those grown indoors, adapting to different environmental conditions. While you may only be able to grow in ideal seasons, you may yield a more abundant crop within that timeline.
As far as your average startup costs are concerned for outdoor cannabis growth, it’s worth mentioning that you may need a combination facility for wholesale operation. For example, while the Mother Room may be suited for outdoor growth, you may need an indoor facility for drying and curing your crop. Mother rooms and clone rooms generally have the most expenses by way of necessary equipment for controlled growth. By outsourcing this part of the operation to the outdoors, you can lower your startup costs to about $17 per square foot.
Greenhouses also provide a happy medium between both options. The typical startup cost for a greenhouse average at around $50 per square foot, a substantial jump from the $17 per square foot outdoor-only option. But less reliance on your local weather conditions means more efficient growth and higher quality harvests.
For more information on Prefabricated Buildings, CLICK HERE or give us a call 888-783-3535.
You can also reach us on Twitter at @coastalsteel.
Also, don’t forget to subscribe, share and comment!
Follow us on: