Marijuana business hard to figure

First-year estimates wildly different

The business plans of the state’s 20 medical marijuana licensees are a study in sharp contrasts. Each of the companies was set up to grow and sell marijuana for medical use, yet many of their first-year projections about revenue, plant production, and customers are wildly different.

For example, New England Treatment Access, which plans to open a Brookline dispensary, is forecasting that it will grow 2,400 pounds of marijuana at its cultivating facility in Franklin during the first year. By contrast, a Holyoke firm going by the name of Debilitating Medical Condition Treatment Centers is projecting that it will grow only 25 pounds. The average for all 20 firms is 480 pounds.

Despite its low production, the Holyoke firm estimates nearly $3.8 million in sales in its first year.  By contrast, Good Chemistry, a firm opening a dispensary in Boston, expects to grow 588 pounds of marijuana yet bring in only $3.5 million in revenue. On a per-ounce basis, the Holyoke firm expects to collect a whopping $9,400 an ounce compared to $373 an ounce at the Boston company.

Green Heart Holistic Health & Pharmaceuticals of Boston is expecting to draw 8,316 patients in its first year, while Patriot Care of Lowell is forecasting only 362. The average first-year patient number for all 20 firms is 1,826.

Brighton Health Advocates of Fairhaven is projecting its revenue will exceed expenses by nearly $1.9 million in its first year, while Medical Marijuana of Massachusetts is forecasting expenses will top revenues by nearly $1.3 million at its location in Mashpee. Overall, 11 of the 20 companies expect to lose money in their first year and nine expect to make money.

The numbers all come from filings made by the companies in their license applications, which are posted on the state Department of Public Health’s website.

Most of the controversy surrounding the approval of medical marijuana licensees has focused on whether the Department of Public Health properly vetted the applicants and checked out their claims of community support. There has been remarkably little scrutiny of the actual business plans of the applicants and whether they are realistic.

Some of the differences in company projections can be attributed to differing approaches. New England Treatment Access, for example, which was awarded two licenses in Brookline and Northampton, plans to grow its marijuana at a 60,000-square-foot facility in Franklin. The enormous size of the facility probably explains why it expects to grow 2,400 pounds of marijuana for its Brookline shop in its first year.

 Yet other facilities closer in size are expecting to harvest very different amounts of marijuana. Debilitating Medical Condition Treatment Centers is using a 12,000-square-foot building to harvest an estimated 25 pounds of marijuana, while Brighton Health Associates in Fairhaven says in its application that it plans to use 10,000 square feet of space to grow 1,180 pounds.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Officials at the Department of Public Health declined comment on the numbers contained in the applications.