Cannabis Edibles Break-Even Analysis: $92K Monthly Revenue Target

Fixed costs $67.9K/mo Monthly base load

Contribution margin 81% After variable costs

Break-even revenue $84.1K/mo Revenue to cover

Break-even timing Month 25 Model ramp point

Break-even calculator

Use this to test monthly revenue against variable costs and fixed overhead for a cannabis edibles business.

Lean Base Full

Monthly revenue Revenue is the cash pool that has to cover variable costs and fixed overhead. $ Low sales High sales Variable expenses Use costs that rise with sales, like ingredients, packaging, commissions, and promos. $ Low costs High costs

Money available to cover fixed costs $76,217 $96,333 revenue - $20,116 variable expenses

Margin ratio

79%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead your margin has to cover, like rent, wages, licensing, and testing. $ Lean base Heavy base

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with sales in this edibles model?

Cost classification

Break-even only works if rent, testing, labor, and packaging are split by how they behave. Blend them into one margin, and Month 25 break-even can look safer than it is.

Expense	Cost	Break-Even Treatment	Common Mistake
Production Facility Rent	Fixed	Use $10,000 per month as fixed overhead in the break-even base.	Spreading rent across units and hiding capacity risk.
Mandatory Lab Testing Fees	Fixed	Use $3,000 per month as fixed in this model.	Treating testing as a per-unit charge without model support.
Packaging Material	Variable	Apply per unit, from $0.35 to $0.70 depending on product.	Burying packaging inside one blended gross margin.
Cannabis Extract	Variable	Apply per unit, from $0.70 to $1.50 depending on product.	Using one extract rate across all products.
Direct Production Labor	Variable	Apply per unit, from $0.20 to $0.40 depending on product.	Mixing direct labor with salaried staff payroll.
Utilities	Semi-variable	Use $1,500 per month fixed plus 0.8% of revenue as production utility allocation.	Calling all utilities fixed and missing usage drag.
Salaried Staff	Semi-fixed	Model payroll in steps as full-time equivalent staffing rises by role.	Assuming payroll scales smoothly with every unit sold.

How does break-even change from a lean two-product launch to a full five-product rollout?

Scenario table

Lean stays below break-even because the first two products do not spread the rent, compliance, and payroll load far enough. The base case gets close, and the full rollout gives the first real cushion.

Planning assumptions only; actual break-even will move with batch yield, staffing pace, and compliance load.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean two-product launch	$32.8k	$7.0k	$67.9k	78.8%	-$49.5k	Still below break-even; overhead outruns the launch mix.
Base three-product mix	$96.3k	$20.2k	$72.4k	79.1%	-$6.4k	Near break-even, but the model still shows a small loss.
Full five-product rollout	$270.5k	$51.9k	$84.6k	80.8%	$116.0k	Clear cushion; higher volume covers fixed overhead.

What breaks the Year 2 break-even plan for this cannabis edibles business?

Stress test

Year 2 has only a thin monthly cushion, so a small sales miss or cost creep can push the plan below break-even. The main risks are wholesale price compression, higher packaging and lab costs, spoilage, and compliance staffing creep.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$92,600	$3,700 cushion	Only a thin buffer sits above break-even.
Revenue shortfall	Monthly revenue falls 10%.	$92,600	$3,800 gap	A small sales miss pushes the plan under water.
Fixed cost rise	Fixed costs rise 10%.	$99,800	$3,500 gap	Rent, testing, or payroll creep moves break-even above plan sales.
Margin pressure	Variable expenses rise 5 percentage points.	$97,400	$1,100 gap	Packaging, spoilage, or lab rework can erase the cushion.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expenses add 5 points.	$111,800	$15,500 gap	Stacked pressure turns a thin cushion into a monthly loss.

What should you verify before you lock the lease and buy the first production line?

Founder checklist

Before you sign the lease or buy equipment, prove monthly sales can clear at least $92,000 and cover the $67.9K fixed load. If sales run light, delay noncritical hires and stage equipment spend instead of locking the full build.

1Demand Proof$92K/mo

Verify monthly sales can reach at least $92,000, or the fixed payroll and facility load will outrun demand.

2Fixed Load$67.9K/mo

Check rent, utilities, insurance, licensing, lab testing, software, security, and payroll stay near this floor before signing long leases.

3Unit Margin79% CM

Verify packaging quotes stay in the $0.35 to $0.70 range and that direct costs plus 5.0% sales commissions and 3.0% marketing still leave room for overhead.

4Capacity Ramp18K / 46K units

Test whether the line and staff can hit 18,000 units in Year 1 and 46,000 in Year 2 without overtime, scrap, or quality misses.

5Capex Lock$550K

Lock the production workflow before committing the full $550,000 in planned capex, because rework after install is expensive and slows launch.

6Cash CushionMonth 25, -$54K

Hold enough cash for the Month 25 trough, since minimum cash falls to negative $54,000 before break-even arrives.