Here are some FACTS! Based on the UC Davis production cost studies. Out door cultivation under perfect conditions will yield 500 pounds per year per acre. If SMGD has 5 acres that comes to 2500 pounds (1,120,000 grams) far less than 3,500,000.
But based on UC Davis industry facts about MJ production, out door plants are routinely only 2.5% THC while indoor cultivation will yield more buds per plant and almost always over 15% THC.
The costs of outdoors cultivation is difficult to compete with indoor cultivation.
Higher end THC content buds sell for around $500 per pound per acre, that means that if each acre yields 500 pounds per year x $500 per pound, each acre will generate $250,000 per acre per year.
But that is the higher indoor cultivated THC product, an out doors cultivated farm that is only 2.5% THC more or less will only achieve a per pound price of $200 per pound maybe even less as people are finding that level of THC to be inadequate.
In the same 5 acres yielding 500 pounds each acre x $200 per pound, as per UC Davis, $500,000 is pretty much the maximum that will be achieved with each 5 acres of cultivation on a low level THC product.
That does not include costs to farm, process, package, market, labor and what is about 10-20% in losses due to pests, theft, weather damage and other factors.
Indoor plants grow year round 24/7 because of UV lights. At night, outdoor plants go dormant and reduce the growth process by up to 70%. Also UV light is directional while the sun moves further reducing the growth process.
The outcome is, if they did plant marijuana on only 5 acres and added in the overhead, security, marketing and processing costs that are estimated to be 30% of the gross, $500,000 x 70% would likely only net them $350,000 then reduce that by 30% from the lack of the growth process and you end up with about $250,000 net annually based on 5 acres.
Out door cultivation is far less THC that is hard to market when people are now buying upwards of 25 to 40% THC products.
This is industry data. If SGMD did achieve the goal on the 5 acres, $250,000 after costs and overhead and limited sales of a low THC product is still $250,000. not to bad. BUT!
The problem is, Selling shares cost them nothing and no labor or overhead. Selling $20,000,000 in shares vs. trying to make the same $20,000,000 growing MJ at $250,000 net per year comes to 80 years.
Given the choice would anyone really waste their time over 80 years to make $20,000,000 when they can make that much selling shares in just a few months?
