To answer that question, I called up Anthony Franciosi, a budding entrepreneur who moved to Colorado from New Jersey when he was 18 to become a marijuana farmer. As he learned to grow, he worked as an irrigation specialist and did restaurant work in the resort town of Steamboat Springs.
“They weren’t really happy with the product they were gonna be able to come out with using that kind of money,” Franciosi says. “Basically that whole plan just flopped on its head.”
He found a second partner from New Jersey, however, someone with a bit more capital who was willing to spend $1.5 million to build a growing facility from scratch in a rural area. It’s set to open early next month, and it will employ five full-time employees as well as some auxiliary help, like trimmers. Those workers will earn around $45,000 a year, Franciosi says, which is a pretty good deal considering those jobs don’t require a college degree.
Darren’s been dealing for three years now, and he’s moving a pound or two every week and a half. The guy above him, he says, is moving anywhere from 20 to 50 pounds a week, but still doesn’t consider himself a kingpin, or even big-time.
Overhead is a lot more complicated for on-the-books businesses like his; Franciosi not only has to pay his employees, he has to fork over a ton in taxes, without a lot of the write-offs that many federally legal businesses enjoy. Still, he remains optimistic.
Because Darren was wiling to haul ass around NYC for the tiniest amount of money, people started hitting him up slowly but surely. The fact that he doesn’t smoke made it easier to turn a profit. When he and his partner doubled their money, they went back and asked for two ounces, and managed to haggle for a discount. Two weeks later, word had spread to other dealers in the area.
“I feel like the margins are shrinking, and that the people who got into the industry early were able to realize huge profits,” he says. “I think going forward it’s still a profitable business but practices just need to get better. I want to be a boutique facility—7,000 square feet as opposed to some in the state that are 200,000 square feet.” In the end, he hopes to produce 90 pounds per month in flower and have it retail for $200 an ounce in Denver and around $300 in the mountains.
On paper, Brian makes next to nothing, about $15,000 a year. He has an LLC officially set up in Delaware, where taxes are lower, and now employs an uncurious accountant and a handful of deliverymen to do the schlepping he’s grown tired of doing himself.
“There’s a guy I sell an ounce to for $200,” he tells me. “He’ll literally sell the ounce to some other dude for $220, and it’s an easy $20 for less than 30 minutes of his time, so he’ll come back and do it again right away. Sometimes it feels like you’re not even selling weed.”
When I was growing up, drug dealers always seemed to have cushy jobs that were a license to print money. But what are the actual economics behind the legal and illegal sides of the marijuana industry?