“I feel like the margins are shrinking, and that the people who got into the industry early were able to realize huge profits,” he says. “I think going forward it’s still a profitable business but practices just need to get better. I want to be a boutique facility—7,000 square feet as opposed to some in the state that are 200,000 square feet.” In the end, he hopes to produce 90 pounds per month in flower and have it retail for $200 an ounce in Denver and around $300 in the mountains.
Franciosi, the grower, says that soon most of the weed on the market will be pharmaceutical grade, and that the people with 200,000 square-foot warehouses will be forced to use pesticides and other nasty chemicals to keep up. He hopes the people who want to deal with that will be motivated to buy his stuff, which he likened to small-batch whiskey. But he also thinks the black market will probably remain an option for the foreseeable future.
Brian’s been in the weed business for about three years and has watched it become even more lucrative in that time. A pound used to cost $4,500, but now he can get one for $3,330 or $3,800. “Retail prices haven’t changed at all,” he says. “That means a lot of people are making good money now because wholesale has gone down so much.”
The unbridled optimism, though, made me a little weary. If everyone followed Miller’s example, wouldn’t all those new businesses and all that VC cash create a marijuana bubble? And what about when a couple of companies make it huge and become the Mercedes or Starbucks of weed?
To answer that question, I called up Anthony Franciosi, the budding entrepreneur behind the Honest Marijuana Company, who moved to Colorado from New Jersey when he was 18 to become a marijuana farmer. As he learned to grow, he worked as an irrigation specialist and did restaurant work in the resort town of Steamboat Springs.
“Twenty years from now you won’t go into a store and ask for a gram of Khalifa Kush Bubble Hash, you’ll ask for a pack of it, or a box of it,” Miller says. “Everything will have been sized accordingly. The measurements by which it’s sold will have changed. As soon as there’s federal legalization, the tobacco, alcohol, and pharmaceutical industries will all get into cannabis.”
Nevertheless, even in hindsight, the weed merchants of my youth appear to have gotten off scot-free. As far as I know, no one I ever bought from got arrested, or even suspended. In my mind, selling weed would have enabled me to save more money than I did through my grunt labor at Panera Bread, Firehouse Subs, Pollo Tropical, and a litany of other fast food restaurants.
Illustration by Wren McDonald
He found a second partner from New Jersey, however, someone with a bit more capital who was willing to spend $1.5 million to build a growing facility from scratch in a rural area. It’s set to open early next month, and it will employ five full-time employees as well as some auxiliary help, like trimmers. Those workers will earn around $45,000 a year, Franciosi says, which is a pretty good deal considering those jobs don’t require a college degree.
When I was growing up, drug dealers always seemed to have cushy jobs that were a license to print money. But what are the actual economics behind the legal and illegal sides of the marijuana industry?