How Much Should Your Cannabis Business Budget for Clones and Seeds?

Trying to decide how much to budget for seeds and clones amid your other startup costs? This is a line item that is often overlooked and/or underestimated. Allocating cash for quality and relevant cannabis genetics is essential for both new operations entering the market, and on an ongoing basis, if cultivators expect to attract and retain loyal buyers, and avoid bottom-tier pricing.

This said, it’s easy to get overwhelmed when browsing the myriad of online clone nurseries. It’s also understandable that many new operators often overpay for the newest and most “hype” strains, and why they often fail to put a system in place that ensures their customers keep coming back to check out the latest greatest flavor of the week/month. So how much should you plan to spend on strains? The best place to begin is by asking yourself how many strains you want to cultivate at any given time.

Much like the length of vegetative growth cycles can be used to inform facility design choices, working backwards from the number of strains you ideally want to grow at any given time helps reveal a strategic path forward to meeting sales and production quotas, while building up a loyal customer base, growing market share, and building an element of customer anticipation and product exclusivity/scarcity from the get-go. 

Creating a Lineup of Profitable Commercial Cannabis Strains

Generally speaking, you want roughly 30% of your strains to be reliable, high-demand cultivars that you will harvest nearly every cycle. These are your “workhorse strains” and help to consistently achieve reliable quality and yield, every harvest. These “workhorses” may rotate or change over time. Still, the idea is to have close to half of the yield and potency quota for each harvest be an absolute layup, leaving the majority of your efforts dedicated to making exotics more exotic. 

Then we recommend keeping about 60% of your strains on rotation—produced every second or third harvest—to create a sense of consumer anticipation and avoid market saturation. Good varieties for this group include customer favorites that may not yield as much as the grower may like, or strains that require special attention. 

This leaves roughly 10% of your available benchtop for new varieties. Think of this group as the rookies on the team - unpredictable and hard to count on, but the bet is that, if you’ve done your research and your genetic source is legit, a good number of those rookies will become starters, and some of them will turn out to be allstars!

Some cultivators whose business models are focused on creating hype around their strain drops may dedicate as much as 25% to 50% of their cultivation benchtop to new strains. As with any smart wager, though, you shouldn’t bet more than you can afford to lose on unproven varieties. But do invest in the best quality genetics your budget will allow—and be sure you trust your genetics source!

Once you have a loose idea of the number of strains you’d like to grow based on your facility’s production capabilities, you can begin figuring our how many strains you’ll need for each category. A good rule of thumb is no more than 4-6 varieties per room, and/or no more than 1 strain per irrigation zone.

Strategizing Your Commercial Cannabis Cultivation Budget

Quality clones can cost hundreds of dollars apiece—even more if they’re ultra-exclusive or there’s a lot of buzz around them. Every pro team needs its superstars, but it would be hard for any team to recruit only players as talented and highly paid as, say, Dak Prescot or Davante Adams. You should also factor into your budget how long it will take to turn one premium clone into a full crop. 

It saves money to buy a smaller number of clones and turn them into mothers, using cuttings from those plants to eventually fill your benchtop. The downside here is that this process can take months, during which you won’t be turning a profit unless you have other strains headed out the door while you finesse your strain library.

This in-house method of raising mothers can work well for a garden with an established strain library and consistent genetics sourcing and onboarding program, where experimental strains are in various stages of mothering and testing. It’s also a fine way to budget for hobbyists who don’t need to report their profits or growth to investors. 

Another option is to purchase a larger number of nursery-grown cannabis clones or cuttings to stock your grow. Cuttings are easier and cheaper to ship and don’t require waiting on mother stock to mature. If you work with a reputable source, you can have all the strains you need delivered to your facility, rooting and ready to fill your flower rooms in as little as two weeks - a huge financial advantage and time savings

Budgeting Startup Time for a Commercial Grow

Starting and filling a facility with sourced clones can benefit operators significantly by achieving full harvests in around three months (depending on the cultivar), rather than the typical six to nine months it would take when starting with seeds or mothers and building plant stock in-house. 

Buying in bulk has advantages too. When growers source thousands of cuts for their new operation, they are usually charged an access or licensing fee for the genetic itself, and then pay a set dollar amount for each cut thereafter. 

So what do all of these budget considerations look like in practice? For example, let’s say a new operation chooses to start with eight strains. The cultivator chooses two high-demand and “hype” strains that cost $2,500 each to access, three “workhorses” that cost $1,000 apiece and four more “classic” strains that each cost $500. That’s a budget of $10,000 for accessing the eight cultivars. Think of this “access fee” as the cost for the first clone/cutting of that genetic. Once the cost of the genetic is covered, expect to be charged $10 (or more for exotic/hype varieties) for each cutting thereafter. If that same cultivator requires 4,000 clones to fill its first flower rooms (500 per each of the 8 strains), they would be looking at $40,000 in cuttings, plus the cost of the genetic access ($10,000). This would equate to a $50,000 order, and full flower rooms within weeks.

An order like this would have a new grow up and running and harvesting full rooms of desirable and sought-after strains months sooner than competitors starting from scratch. That headstart can translate into real profits—especially when you consider the months-worth of harvests you would be missing out on while you grow out enough mothers to produce the clone stock for your first crop. It can also mean the difference between securing significant market share out of the gate, vs coming into the market later, and needing to capture customers back from the winners of the speed-to-market race. 

Once you have an established and quality strain library, you can go into maintenance mode, where you are bringing a couple of new strains into the production schedule every month or two, to keep things fresh and entice the customers asking “what’s new?” Once the foundation is in place, a good grow facility can afford the time it takes to buy individual clones of the newest, hype flavors, establish mothers themselves and create new plant stock from those mothers.

FYI: Next Big Crop is not a nursery. We are part of a nationwide cannabis collective that helps cultivators get started the right way. Learn more about our commercial services, including cannabis genetics sourcing.