How are profits split in the local med canna market ?

[Sun Ra]

Also what would be the difference between the cost of producing an ounce of bud to the final price ?

The bit in the middle there - how is that split up I'm wondering ?

Grower - a third - govt - a third - retailer - a third ? I've got no fucking idea.

 

[SAW]

My legal meds, it would be grower, prescribing clinic, govt and pharmacy. I’m sure the clinic is tied to the growing, hence special deal with chemist and cheaper than the imported medicine. I was going to try another clinic next time.

 

[Orb]

I too was curious about this so did a bit of searching with tools from work - margins are a healthy 20-30% for the major Australian growers based on limited available data (some are still privately owned so don’t provide full financials), indoors growing costs were around $1.10 per gram and excluding any licensing, sales and distribution costs. And tax story was the same as if u sold most things - corporate tax, gst and if they export there was another tax payable

 

[Sun Ra]

I too was curious about this so did a bit of searching with tools from work - margins are a healthy 20-30% for the major Australian growers based on limited available data (some are still privately owned so don’t provide full financials), indoors growing costs were around $1.10 per gram and excluding any licensing, sales and distribution costs. And tax story was the same as if u sold most things - corporate tax, gst and if they export there was another tax payable

Huh ? So if they produce at $1.10 per gram - let's round that up to the good old fashioned $30 an oz.
So are you saying 20-30% on top of that - for the grower ? - @ 20% they sell an ounce for $36 and @ 30% they
sell it for $39 ? Coz - if you are - I wouldn't have thought so.

 

[SAW]

Work back from the final price. Top tier is about $13/g, mine is $9/g.
So perhaps $3-3.50/g for grower ($85-95/ Oz). Big overheads in start up even outdoor setups.
Was the commercial grower in EnZed on this forum or another?

 

[Billygoat]

I would be very surprised if it is not government 80% or thereabouts...

 

[Orb]

did a little more digging and the report below provides modelling for all costs for an Australian medicinal canna business - full cost breakdown estimates on page 38 for indoor/greenhouse/outdoor, pages 34-35 go into compliance and regulatory costs

report is 8 years old so with tech changes etc. I’m assuming costs will have moved around somewhat but give u a feel for what’s what

https://www.deloitte.com/content/dam/assets-zone1/au/en/docs/services/economics/deloitte-au-modelling-cost-medicinal-cannabis-230916.pdf

 

[Mellow oldfark]

Thought I read somewhere most operations haven't turned a profit yet?
I believe over regulation and crazy inspection fees etc havnt made things easy.
Does anyone know how much Ozzie grown legal is actually consumed here and if the market will ever be free of crap import seconds.
Which is complete madness

 

[Orb]

again some older data points from 2020 but there are 40+ licensed Australian cultivators and the annual costs associated with government compliance and regulations would be in region of $30k-$50k each year so they make up a fairly small portion of costs and the agency that does all the work barely break even per detail below

Cost Recovery Implementation Statement (CRIS): Regulation of medicinal cannabis, March 2020

Information on how the Office of Drug Control implements cost recovery for regulatory activities associated with the direct costs of processing licence and permit applications for the cultivation of medicinal cannabis and the ongoing monitoring and compliance of the regulatory scheme.

www.odc.gov.au

turning a profit in first few years would like many sectors, be challenging as lots of upfront costs so wouldn’t be surprised to see many not being profitable for a while (or till they go bust)

 

[SAW]

What’s the requirements for monitoring through the supply chain. From my loose understand of US, they’re weighing and recording everything down to leaves removed? How is the THC measured? the presence of mould? I love the plant and cultivation, but full commercial would do my head in. I reckon tours would be awesome