For both sides
Cultivation cost-per-pound calculator
Federal and state law current as of September 2026 — verify with counsel.
The cultivation cost-per-pound calculator divides a grow's annual fully loaded cost by the pounds it sold, then compares the result with the wholesale price per pound. The gap between the two is the margin, or loss, on each pound. With the default inputs, $1.8 million of cost over 2,000 pounds is $900 a pound against a $700 wholesale price, a loss of $200 a pound.
Key takeaways
- Formula: cost per pound = annual fully loaded cost divided by pounds sold; gap = wholesale price per pound minus cost per pound.
- Grown Rogue reported indoor flower costs of $277 a pound in Michigan, $326 in Oregon, and $670 in New Jersey for the quarter ended 30 June 2026.
- Glass House Brands reported greenhouse production cost of $122 per equivalent dry pound and an average selling price of $211 for the second quarter of 2026.
- The Cannabis Benchmarks U.S. Spot Index was $1,088 a pound on 4 September 2026, while Colorado's state-set average flower rate was $607 for April to June 2026.
- Buyers compare all-in cost with today's local wholesale price first; a grow that cannot clear that test is valued on its assets and license, not its earnings.
What the cost-per-pound calculator computes
The tool answers the first question any buyer asks about a cultivation business: does it make money on each pound at today’s price? It returns three figures: your cost per pound, the wholesale price you entered, and the gap between them. A positive gap is margin. A negative gap is the loss on every pound sold.
The formula
- Cost per pound = annual fully loaded cost / pounds sold
- Gap per pound = wholesale price per pound - cost per pound
If pounds sold is zero or blank, the tool asks you to enter a weight greater than zero instead of showing a result.
Inputs
| Input | What to enter |
|---|---|
| Annual fully loaded cost | All costs of growing, processing, and selling the crop for twelve months, including facility cost, depreciation, and overhead. Exclude income tax. |
| Pounds sold | Dry, saleable pounds actually sold in the same twelve months. Reconcile to your track-and-trace transfer records. |
| Wholesale price per pound | Your realised average price across those sales, net of discounts and returns, not a list price. |
A cost checklist so that nothing is left out:
- Direct labour, including trimming, with payroll taxes and benefits
- Utilities: power, water, gas
- Nutrients, media, pest management, clones or seed
- Packaging, testing, and transport
- Rent, or property taxes, insurance, and a market rent equivalent if you own the building
- Repairs, maintenance, and equipment depreciation
- License fees, security, and compliance staff
- Management and administration allocated to the grow
Worked example
Illustrative, using the tool’s defaults: annual cost $1,800,000, 2,000 pounds sold, wholesale price $700 a pound.
| Step | Arithmetic | Result |
|---|---|---|
| Cost per pound | $1,800,000 / 2,000 | $900 |
| Gap per pound | $700 - $900 | -$200 |
| Annual result | -$200 x 2,000 | -$400,000 |
This grow loses $400,000 a year at current prices. Three levers change that, and the calculator lets you test each:
| Change | New inputs | Cost per pound | Gap |
|---|---|---|---|
| Raise yield 30% at the same cost | 2,600 pounds | $692 | $8 |
| Cut cost 25% | $1,350,000 | $675 | $25 |
| Better price through quality or branded sales | $1,000 a pound | $900 | $100 |
Yield usually moves fastest, because most cultivation cost is fixed. Consultant Ryan Douglas put the commercial floor at 30 to 35 grams of dry flower per square foot of canopy per harvest, with 50 to 70 grams marking strong operations (November 2020).
Benchmarks to compare against
Reported figures, with dates. Company cost figures are as defined by each company and may exclude items in the checklist above.
| Measure | Figure | Source and date |
|---|---|---|
| Indoor flower cost, Michigan | $277 a pound | Grown Rogue, quarter ended 30 June 2026 |
| Indoor flower cost, Oregon | $326 a pound | Same |
| Indoor flower cost, New Jersey | $670 a pound | Same |
| Greenhouse cost, California | $122 per equivalent dry pound; average selling price $211 | Glass House Brands, Q2 2026 |
| U.S. spot wholesale price | $1,088 a pound | Cannabis Benchmarks, 4 September 2026 |
| Colorado average market rate, flower | $607 a pound | Colorado Department of Revenue, April to June 2026 |
National averages hide wide state differences. Use your own state’s price, because flower cannot lawfully cross state lines. More benchmarks are on cannabis benchmarks: cost per pound, basket size, margins.
What the result means in a sale
A positive gap that holds up under a lower price assumption supports an earnings-based valuation. A thin or negative gap pushes buyers toward per-square-foot and asset-based pricing, described on cultivation valuation: per square foot and per pound. In falling markets buyers also stress-test the price input; see how oversupply and price compression affect value. Broader context on buying and selling grows is on the cultivation license-type page.
Limitations
- One blended price and one blended cost. The tool does not separate flower grades, trim, or fresh-frozen material.
- No seasonality. Outdoor and greenhouse operators with one or two harvests should use a full year.
- No tax. The gap is before federal and state income tax and before any cultivation or excise tax you remit.
- Backward looking. It uses last year’s cost and price; a buyer will use next year’s.
- Garbage in, garbage out. Leaving out rent, depreciation, or owner labour is the most common way sellers understate cost per pound, and buyers add it back.
This page and the tool are educational and are not a valuation or financial advice.
Illustrative result will appear here.
Illustrative only. Defaults are commentary ranges, not a valuation or tax opinion. Federal and state law current as of September 2026.
Frequently asked questions
What costs belong in a fully loaded cultivation cost?
Everything it takes to produce and sell the crop for a year: cultivation and post-harvest labour with payroll taxes, utilities, nutrients and media, packaging, testing, rent or an equivalent facility cost, repairs, insurance, license fees, security, depreciation of equipment, and an allocation of management and administrative overhead. Leave out income tax and one-off items. Public companies often report a narrower cash cost, so compare like with like.
Should I use pounds harvested or pounds sold?
Use pounds sold, matched to the same twelve months as the costs. Harvested weight that sits in the vault, fails testing, or is sold later at a discount flatters the figure. If you sell trim or lower-grade flower, either convert everything to a flower-equivalent weight or run the calculator separately for each product with its share of cost.
What is a good cost per pound for an indoor grow?
It depends on the state price you sell into. Efficient public indoor operators reported roughly $280 to $330 a pound in mature markets and about $670 in a newer limited market in mid-2026. What matters is the gap to your realised wholesale price. A $600 cost is strong where flower sells for $1,500 and fatal where it sells for $550.
How do buyers use cost per pound when valuing a grow?
As a survival test. A buyer takes your all-in cost, compares it with current and expected local wholesale prices, and asks whether the facility earns a margin without the current owner's unpaid effort. If it does, the business can be valued on earnings. If it does not, the offer falls back to equipment, real estate, and any scarcity value in the license.
Does the calculator account for 280E?
No. It is a pre-tax operating measure. Cultivators can place most production cost into cost of goods sold, so section 280E usually hurts growers less than retailers, but federal tax still reduces the cash margin on each pound for adult-use sales. Estimate the tax separately before relying on the gap as take-home margin.
Sources
- Grown Rogue — Second Quarter 2026 Results (4 August 2026) — https://www.newswire.ca/news-releases/grown-rogue-reports-second-quarter-2026-results-897416630.html
- Glass House Brands — Second Quarter 2026 Financial Results (13 August 2026) — https://www.globenewswire.com/news-release/2026/08/13/3344909/0/en/glass-house-brands-reports-second-quarter-2026-financial-results.html
- Cannabis Benchmarks — U.S. Cannabis Spot Index, 4 September 2026 — https://www.cannabisbenchmarks.com/reports/u-s-cannabis-spot-index-september-4-2026/
- Colorado Department of Revenue — AMRs for retail marijuana effective 1 April 2026 — https://tax.colorado.gov/Marijuana_AMR_April_to_June_2026
- Greenhouse Grower — The 3 G's for Increasing Cannabis Yields, Ryan Douglas (13 Nov 2020) — https://www.greenhousegrower.com/production/the-3-gs-for-increasing-cannabis-yields/