CBD and Cannabis Products Break-Even Analysis: $346K/Month

Fixed costs $7.6K/mo Base overhead

Contribution margin 81% After variable costs

Break-even revenue $34.6K/mo Full monthly base

Break-even timing Month 26 Model payback point

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against the point where the business breaks even.

Lean Base Full

Monthly revenue Revenue sets the cash available to cover direct costs and overhead. $ Low sales High sales Variable expenses These are the direct costs that rise with each sale, like product, payment, and shipping costs. $ Light costs Heavy costs

Money available to cover fixed costs $48,000 $60,000 revenue - $12,000 variable expenses

Margin ratio

80%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead the business must cover even before profit. $ Lean overhead Higher overhead

Break-even chart Revenue Total costs

Which expenses stay fixed and which move with sales in this CBD products business?

Cost classification

Classify costs before you calculate break-even, or Month 26 can look safer than it is. First-year fixed overhead is $7,600/month before payroll, payroll adds $16.25k/month, and sales-linked costs start at 19.0% of revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Monthly fixed overhead	Fixed	Use $7,600/month for e-commerce hosting, lab verification, storage, software, legal, accounting, utilities, and internet.	Mixing one-time setup spend into monthly break-even.
Payroll	Semi-fixed	Use $16.25k/month in the first year, then step up as staffing rises in later years.	Treating headcount as fully variable with orders.
Annual marketing budget	Semi-variable	Model $50,000/year in the first year with $40 customer acquisition cost.	Calling all marketing fixed and ignoring CAC.
Wholesale product cost	Variable	Apply 10.0% of revenue in the first year, improving to 8.0% by Year 5.	Using the $30,000 initial inventory purchase in monthly break-even.
Packaging & fulfillment	Variable	Apply 3.0% of revenue in the first year, improving to 2.0% by Year 5.	Leaving pick, pack, and materials out of gross margin.
Payment processing fees	Variable	Apply 2.5% of revenue in the first year, improving to 2.0% by Year 5.	Forgetting card fees when setting the contribution margin.
Shipping & handling	Variable	Apply 3.5% of revenue in the first year, improving to 2.5% by Year 5.	Burying carrier charges without a sales-volume driver.

How does break-even change from a lean launch to a full build?

Scenario table

Break-even gets harder as fixed costs scale, but the margin improves too. Year 1 and Year 2 still show EBITDA losses, while Year 3 turns positive, so the real test is whether channel sales and repeat orders outrun payroll.

Planning assumptions only; actual results can move with channel mix, compliance costs, and payroll timing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$5,460	$1.0k	$280k	81%	-$264k	Needs about $346k of revenue to cover fixed load.
Base build case	$5,993	$1.1k	$424k	82%	-$170k	Needs about $517k of revenue; this is the tightest break-even point.
Full scale case	$6,510	$1.1k	$534k	83.2%	$628k	Needs about $642k of revenue, but Year 3 EBITDA turns positive.

What breaks first if sales slip or costs rise?

Stress test

The base plan makes about $44k a month on $400k revenue, but the cushion is only about $54k over break-even. A 10% sales miss, a 5-point margin hit, or a 10% fixed-cost jump can wipe most of that room.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$345,679	$54,321 cushion	Base case still clears break-even.
Revenue shortfall	Revenue falls 10% to $360,000 a month.	$345,679	$14,321 cushion	A small sales miss leaves only a thin buffer.
Fixed-cost pressure	Fixed costs rise 10% to $308,000 a month.	$380,247	$19,753 cushion	Overhead growth cuts into profit fast.
Margin pressure	Variable expenses rise from 19% to 24% of revenue.	$368,421	$31,579 cushion	Fees, shipping, and discounting push break-even up.
Combined pressure	Revenue falls 10%, variable expenses rise to 24%, and fixed costs rise 10%.	$405,263	$45,263 gap	The model flips to a monthly loss.

What should a CBD and cannabis founder verify before locking platform spend, inventory, and hiring?

Founder checklist

Test the break-even math against the first real commitments: customer acquisition, fixed burn, margin, staffing, cash, and launch stock. If those numbers don’t hold at the model level, delay the spend.

1Demand Proof$40 CAC

Verify the Year 1 marketing budget can buy customers at about $40 each, because $50,000 only funds roughly 1,250 new customers before repeat sales help.

2Fixed Burn$7.6k/mo

Confirm platform, lab, warehousing, software, legal, bookkeeping, and utilities stay near $7.6k a month, because that burn hits before product profit can help.

3Margin Stack81% CM

Check supplier certificates of analysis, card processing setup, and shipping terms before you rely on the 19% cost stack, since the model only leaves about 81% contribution.

4Hiring Ramp$195k Y1

Phase hiring so Year 1 labor stays close to the model and the extra operations role waits for demand, because payroll can outrun sales fast.

5Cash Cushion$368k cash

Keep enough cash to reach Month 25 with at least $368,000 in reserve, because breakeven does not land until Month 26 and payback takes 38 months.

6Launch Stock$30k stock

Verify the first $30,000 inventory buy matches early order flow, so you don’t tie up cash in product before the 1.2-unit order pattern proves out.