The marijuana supply in Colorado is keeping up with demand, which means that prices are decreasing. On average, wholesalers are looking for prices around $1,300 per pound to put on their shelves. Growers are working tirelessly to cut growing costs to stay in business with the decreasing costs for wholesalers.
Focusing on efficiency, growers can cut costs to $300 per pound or less, according to comments made to The Denver Post by John Chandler of Urban-Gro. Retail prices are falling, but the wholesale market is falling much faster. In November 2016, the average price per gram was $6.61.
Troy Dayton of Arcview Group said, “Anybody that is investing in this sector or is starting a business in this sector needs to be doing so with the understanding that the price of cannabis is going to drop precipitously. The agricultural technology space is already booming, and now they get to lay their hands on the cannabis industry.”
Chandler said, “If you want to compete on a price game, you have to use versions of our technology to do it. Everybody is putting in irrigation systems, so that’s good for us.”
Leif Olsen of Good to Great Consulting said, “Growing inside is definitely an antiquated concept. It’s coming out of hiding.”
Brandy keen of Surna Inc. agrees that efficiency is key for growers in cutting costs. Hybrid greenhouses using glass ceilings and insulated walls use less energy. Climate-controlled setups also help cut energy costs.
The owner of Smokey Point Productions in Washington, Brian Lade, says he is looking more at automation to help cut costs. His company uses machines to mix soil and put the right amount of dirt into the plants. Then, those same machines put holes in the dirt for plants. Pots are sent down conveyor belts where an actual human plants the marijuana plant. He’s also testing out an automatic trimming machine.
Lade said, “If you want to provide cannabis to your people, you’ve got to adapt or die. We are basically just going way bigger than adding efficiencies like the machines and computer software.”