For cannabis cultivators, understanding your true cost per pound is critical to setting pricing, analyzing margins, and optimizing operational efficiency. This guide walks you through the process step by step, using free tools from BUD Calculator.

Step 1: Total Your Operational Costs

Start by calculating the full cost of a production run. This includes inputs like nutrients, water, electricity, testing fees, labor, rent, and post-harvest processing. Include both fixed costs (e.g., rent, equipment) and variable costs (e.g., soil, packaging).

Step 2: Divide by Yield Output

Split your yield into three main categories: Premium Flower, Smalls, and Trim. Use accurate wet-to-dry conversions if needed. You'll need the final dry weight in grams for each category to calculate the cost per unit.

Step 3: Use the Break-Even Calculator

Visit the Break-Even Calculator and enter your total cost and yield breakdowns. The tool will show your per-gram and per-pound costs for each product type, and help you compare them to your average sale prices.

Step 4: Review and Adjust Based on Market Prices

After calculating your true costs, compare them against your typical sale prices. This allows you to evaluate your margin per product type and determine whether you need to adjust pricing, improve yield, or reduce inputs.

Traditional Method: Quick Cost Per Pound Estimate

Some growers use a simplified model to calculate cost per pound. This typically includes only direct grow-related expenses. Here's a common formula:

(Electricity Cost + Labor Cost + Growing Supplies) / Total Pounds of Premium Flower = Cost Per Pound

This approach can be useful for small cultivators or home growers who aren’t tracking fixed costs like rent or equipment. However, it may severely underestimate actual cost in commercial settings where overhead and regulatory costs are significant.