One of my local friends there tells me a coffeeshop near Central Station which decided to lose the alcohol and go with the cannabis sales.
"What's that you say?", says Heineken. "You're only five years into your ten year contract. You'll have to pay a handsome sum to get out of it".
Apparently they signed the contract to get favorable pricing, and now there is a problem. I understand that's the way it works there. Additionally, I was told it is not uncommon for the brewery to invest in a new operation.
In the U.S. that is not permitted, at least for the mega-breweries. The micros are allowed to brew their own, sell it in their own pub, and that's not a problem. Back in the late 1800s and up into Prohibition in the U.S., large breweries actually owned pubs. Anheuser-Busch owned dozens in the St. Louis area. Today, that's not permitted.
I find this interesting. Don't know what the CS will do, but they definitely have to pay to get out of five years of a ten year contract.
FWIW
Interesting Dilemma for a CS come 1 April 2007
Of course, but the question is how much margin and net profit in cannabis, vs. margin and net profit from alcohol.The obvious solution for a lot of places will be to stop seeling weed and just become a smoker friendly bar instead, that way keeping the brewery happy and losing minimal customers.
Bottom line is one could always (presuming no other legal problems) open a bar elsewhere and retain the cannabis license. Really, one has to wonder if giving up the cannabis license is wise at all, but then again there is always the Sword of Damocles hanging over the cannabis license: what if that goes away or is even more severly restricted?
And if it becomes a smoker friendly bar, what if the "smoking in public" issues raises its head, as in Ireland as DC pointed out. After all, if that can be accomplished in Ireland, is any place safe?
And again back to this establishment's particular situation, if not for the Heineken contract, it would be much simpler :-)
Its defintely an ineresting situation, as you say there will definitely be some CSs that open a new bar, possibly just next door to the existing premises. I heard that Nes plan to open a new venue but that may just be hearsay.
I assume that the mark up on alcohol is higher than that on cannabis and therefore the profit margins are greater, but that is based on guesswork more than any evidence, I'm sure DC can correct me. It will be interesting to see how the law is specifically worded and how much of a separation is needed between the nar area and coffeeshop, would it be possible to operate 2 separate venues on different floors but under the same company? What about 2 adjoining premises with an interlinking door?
As for the smoking ban, we can do nothing but cross our fingers and hope for common sense to prevail. I work in the licensed trade in England and have done extensive reearch into smoking bans, specifically in Ireland and Scotland. A smoking ban in the Netherlands would shake the country's liberal cannabis laws and could lead to a re-criminilisation of our beloved herb. However, I feel that more than likely coffeeshops would simply redesign themselves as vapo cafes and the culture would simply evolve.
I assume that the mark up on alcohol is higher than that on cannabis and therefore the profit margins are greater, but that is based on guesswork more than any evidence, I'm sure DC can correct me. It will be interesting to see how the law is specifically worded and how much of a separation is needed between the nar area and coffeeshop, would it be possible to operate 2 separate venues on different floors but under the same company? What about 2 adjoining premises with an interlinking door?
As for the smoking ban, we can do nothing but cross our fingers and hope for common sense to prevail. I work in the licensed trade in England and have done extensive reearch into smoking bans, specifically in Ireland and Scotland. A smoking ban in the Netherlands would shake the country's liberal cannabis laws and could lead to a re-criminilisation of our beloved herb. However, I feel that more than likely coffeeshops would simply redesign themselves as vapo cafes and the culture would simply evolve.
Or is the possibility of a "private club", at which one must pay a fee to "join" feasible? In some counties in Texas as recently as 8 years ago, the way the liquor laws in various counties worked was if one wanted to even have a beer at a restaurant, a one dollar "membership fee" could be paid and a "one day pass" was granted. It's stupid as hell of course, but that was the way common sense business people found around an incredibly stupid law.However, I feel that more than likely coffeeshops would simply redesign themselves as vapo cafes and the culture would simply evolve.
Perhaps that could work in Amsterdam? Pay a Euro or two (or whatever :-) and be granted membership to a private club at which the "public smoking" laws do not apply. Smart money says if that's allowable, our Dutch friends will be capturing some extra coin at the door. And I don't blame them at all... :-)
We shall see how this plays out.
Then everywhere would just become a 'members club' making the law obsolete. The only thing that would get round it would be if staff signed disclaimer forms, though I can't see government even goin for that. As for the place mentioned, business is buisness I 'spose. But, I don't understand why the owner got into the contract when he must have known this time was coming. The other locations in town that have to split their licenses will have separate premises and continue doin both, most already do seeing they're the bulldog, grasshopper and Rokerij. Anybody else will choose to stay a coffeeshop rather than a bar....unless they're bonkers. 
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back2thedam
- Posts: 225
- Joined: Mon 12th Dec 2005 05:59 pm
- Location: Dorset
if you consider that on a conservative estimate
of a small grow you can get 500 grams
of a 9 to 11 Euro per gram weed, the margins
look pretty good. I'm sure selling beer and
other alcohol is very profitable too.
I wish they had allowed beer to remain and
only take away the harder stuff... I so enjoy
a cold one with a joint in the night hours
at least we will still be able to buy in one place
and go smoke it in other bars.
of a small grow you can get 500 grams
of a 9 to 11 Euro per gram weed, the margins
look pretty good. I'm sure selling beer and
other alcohol is very profitable too.
I wish they had allowed beer to remain and
only take away the harder stuff... I so enjoy
a cold one with a joint in the night hours
at least we will still be able to buy in one place
and go smoke it in other bars.
Religion Race Color Creed... Whatever
I'm pretty sure the profit on beer and the like doesn't touch what they make on weed.nytvd wrote:if you consider that on a conservative estimate
of a small grow you can get 500 grams
of a 9 to 11 Euro per gram weed, the margins
look pretty good. I'm sure selling beer and
other alcohol is very profitable too.
I wish they had allowed beer to remain and
only take away the harder stuff... I so enjoy
a cold one with a joint in the night hours
at least we will still be able to buy in one place
and go smoke it in other bars.
Being pedantic and knobbish since 1972
One CS I spoke with which was very forthcoming told me they pay 3000-3500 per kilo, and they are not selling "designer weed" if you know what I mean.
And this wasn't shaken shite weed, either.
Do the arithmetic.
3500 /2000 = 1.75 Euro per gram wholesale. That's about a 400-500% markup on 6.50 - 8.50 Euro per gram weed.
That's somewhat more than the markup on alcohol, at least what would be a normal markup on alcohol at bar prices around here (for beer). In some places, perhaps a 400% markup on beer depending upon what type of bar it is. Bottled beer, that is.
It should be easy enough to figure profit on a keg (15.5 gallons in the U.S.):
There are 120 pints (counting 64 oz or 1/2 gallon for spillage, etc) in a 15.5 gallon keg, and at my local watering hole, a pint of "regular" draft beer (similar to buying a Heineken or Amstel in Amsterdam) is $2.00. So that's $240 gross on the keg, and the keg costs the bar (roughly) $60. That's an approx. 400% markup on the draft beer, right in line with the kilo of cannabis described above.
Of course, there is a lot more labor associated with keeping the liquor flowing than selling the cannabis (washing glasses, changing kegs, taking keg delivery, restocking bottles, etc etc etc etc).
From a strict business POV, cannabis makes more sense IF nothing else changes, i.e. even more restrictive rules put into place. But there are no guarantees.
And this wasn't shaken shite weed, either.
Do the arithmetic.
3500 /2000 = 1.75 Euro per gram wholesale. That's about a 400-500% markup on 6.50 - 8.50 Euro per gram weed.
That's somewhat more than the markup on alcohol, at least what would be a normal markup on alcohol at bar prices around here (for beer). In some places, perhaps a 400% markup on beer depending upon what type of bar it is. Bottled beer, that is.
It should be easy enough to figure profit on a keg (15.5 gallons in the U.S.):
There are 120 pints (counting 64 oz or 1/2 gallon for spillage, etc) in a 15.5 gallon keg, and at my local watering hole, a pint of "regular" draft beer (similar to buying a Heineken or Amstel in Amsterdam) is $2.00. So that's $240 gross on the keg, and the keg costs the bar (roughly) $60. That's an approx. 400% markup on the draft beer, right in line with the kilo of cannabis described above.
Of course, there is a lot more labor associated with keeping the liquor flowing than selling the cannabis (washing glasses, changing kegs, taking keg delivery, restocking bottles, etc etc etc etc).
From a strict business POV, cannabis makes more sense IF nothing else changes, i.e. even more restrictive rules put into place. But there are no guarantees.
This is what happens when stoners try to do arithmetic.A kilogram is a thousand grams
as a kilometer is a thousand meters.
metric system.
D U H
So the net profit on the weed is actually half that, in my example.
Next time, I'll do this in the morning after coffee rather than in the afternoon after smoking!!!!!!!
No shit: kilo = one thousand
I presume none of this applies to the large seed/grow operations who supply their own. But for the little guys, it appears the weed margin is not as appealing as at first glance.
This is what happens when stoners try to do arithmetic.A kilogram is a thousand grams
as a kilometer is a thousand meters.
metric system.
D U H
So the net profit on the weed is actually half that, in my example.
Next time, I'll do this in the morning after coffee rather than in the afternoon after smoking!!!!!!!
No shit: kilo = one thousand
I presume none of this applies to the large seed/grow operations who supply their own. But for the little guys, it appears the weed margin is not as appealing as at first glance.
Lafe, I wasn't even checking your math...just impressed that you went thru the calculations...including the beer - I would have no idea how much a keg costs. I was answering 711's question regarding a kilo...And yes, after paying for lights and other hardware - pot growing is high margin.
Religion Race Color Creed... Whatever