How do you figure small scale licensed growers wont be able to compete against big grows.
How does one know the economies of scale for large growing vs small grow shows?
Whether its 50 lights vs 500 light shows
1) The program is just starting - Meaning everyone is at the same point and has to find customers
2) commercial grade electricity is charged pretty much the same rates
3) Just because you can produce say 50,000 pounds of product can you sell all of that vs a small show that may produce 5000 pounds of product.
4) In business Push/Pull strategies work best, meaning as inventory lowers new product is coming along.
5) Most people would rather get from mom and pop boutique style then say Major Corps.
and its a large market?
FROM 50,000 people say one has 50 - 100 patients
@ 1 gram a day or 1 oz per month
Selling rate of $5 gram
30 grams x $5 = $150
$150 x 50 people $7500
$150 x 100 people $15,000
So 100 oz where sold or 6.25 pounds of product.
My point at bare minimum,
Your selling at health Canada's rate $5
1 gram a day value for 50 - 100 patients.
Now what if you have patients that have 3 grams per day or 5 grams per day @ $5 selling rate?
that now turns into
90 grams x $5 = $450
$450 × 50 people = $22,000
just based of 3 grams per day x 50 people.
NOW what it cost to produce those pounds there is more then doable, and if you cant make a profit, you shouldn't enter this business venture.
So come again with another argument besides economies of scale, because your cost are not mines and this is more then doable.
Small scale licensed growers won't be able to compete with the big corporate growers...It's just not possible, they have economy of scale which the little guy does not.
Add to this, the pretty small market for medicinal marihuana, and, it's going to be dog-eat-dog in that space.