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  1. #1
    Marijuana Growing Newbie
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    How To Share Costs & Profits - Industry Norms?


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    How To Share Costs & Profits - Industry Norms?
    I have partnered with a family member. We should be fully set up for a small 16 light indoor grow within a week. We will triple that size in Dec as we have the conditioned space, as long as the grower can handle the small grow first). My question is - profit split between investor (me) and grower (partner).

    To get things started, I funded the full set up of the facility, paid for all plants, nutrients, electricity, etc. My partner is 100% responsible for managing the day to day operation and selling product. I want to be fair to both of us. His suggested split is - me 60%-him 40% (after operation until all setup costs are recovered; then me 40%-him 60% with him covering all operational costs. This seems a bit over generous towards him, especially as I take all of the financial risk.

    I'd prefer to get my initial investment ($100k) back sooner. I'd like to know what is the norm in the industry for recoup of initial investment, allocation of costs and profit share?

  2. #2
    Marijuana Growing Member
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    If you aren't playing the silent partner and he is just participating giving time, rate it as a percent of new sales he generates. If he works miracles a high percent might be nice. Anything else and no millions he must be smoking dope. Look up sale bonuses and salaries for managers. If he is just arranging to get cleared of registering, rate that as a bonus payment set by you. You need to talk to other growers. Would figure he just gets paid as a grower that receives bonuses for sales goals made and bonuses equaling a percent of what he generates as new sales. Buyers can disappear. Laws can change like testing which jams things up and with his idea of taking the most you are stuck having already paid the big bills and all he would be doing is keeping a clean shop like he should anyway. Him saying 60% you better hire an outside book keeper. Call one up and ask what he thinks a manager should get. Isn't much.
    You stick a bunch of females together and don't want any problems? Good luck. They are going to mess you up.

  3. #3
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    I think you could go the way big business does and hire a grower as a manager of sorts, have him do all the work, you'd get the lion's share for just your venture capital

    Would he put his heart and soul into it?

    No...

    He will act like any other employee, and not much give a shit, bonuses or not. And the first offer of a better deal and he will be off doing that instead quicker than you can say bonus, leaving you with nothing but headaches and a desperate need to hire anyone you can at short notice mid-season because you don't have a clue how to grow pot, which will likely lead to more headaches as you probably hire someone less ideal to run it due to desperation

    I think something else you could do is recoup your investment with interest at a quicker rate than described, then once you are paid go with the 60/40 in his favour, because basically without a dude who grows with passion and care, you are simply another wannabe marijuana millionaire sitting there with a bunch of cash and nobody to do it right. There is already plenty of these guys apparently, and the market is saturated with mediocre product. Do you want that to be the legacy of your show, or do you wanna be known for the best

    So a large part of it will come down to your ethics and inherent fairness as a businessman, along with realizing your place in the paradigm properly. You will do very well by sitting on your arse basically after a while. Your partner will do all the work and run things for you, and as it's 60% his, he will give a shit a lot more than any employee on any possible salary ever would

    You could talk to other people and see who you could replace him with in order to get yourself a deeper cut, but if he is the right guy then he is the right guy and that is worth paying a premium for. You will sleep better at night knowing your investment is safe because you are working with the right guy in the first place

    That's my two cents eh

    good luck with it
    PO

  4. #4
    Marijuana Growing Member
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    Then the main part is surviving. You can grow great and massive quantities but by regs you have to deal.

    You stick a bunch of females together and don't want any problems? Good luck. They are going to mess you up.

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