CBD Oil Production Break-Even: About $64K Monthly Revenue

Fixed costs $51.1K/mo Monthly overhead

Contribution margin 74% After variable costs

Break-even revenue $68.8K/mo Cover fixed costs

Break-even timing Month 2 Early ramp point

Break-even calculator

Test monthly revenue against variable expenses and fixed monthly costs to see how fast CBD oil production reaches break-even.

Lean Base Full

Monthly revenue Revenue sets the pool that covers direct costs and overhead. $ Lower sales Higher sales Variable expenses These rise with output: raw hemp, packaging, lab testing, ads, and fees. $ Lower costs Higher costs

Money available to cover fixed costs $81,333 $97,083 revenue - $15,750 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly costs that margin has to cover before profit starts. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which CBD oil production expenses are fixed and which move with sales at break-even?

Cost classification

Break-even only works if overhead is separated from batch-driven costs. Here, fixed monthly costs set the revenue floor, while materials, packaging, testing, ads, and platform fees move with units or sales.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility Rent	Fixed	Include $10,000 per month in overhead from Month 1 through Month 60.	Ignoring idle capacity when early batches do not fill the facility.
First-year payroll coverage	Fixed	Use $34,583 per month for first-year wages across planned roles.	Moving salaried coverage into unit economics and overstating batch margin.
Raw Hemp Material	Variable	Apply per unit, such as $1.50 per tincture and $1.80 per capsule.	Treating inventory purchases as overhead instead of matching usage to units produced.
Bottle, dropper, capsule shells, labeling	Variable	Apply unit-level packaging by product, such as $0.80 bottle and dropper for tinctures.	Burying packaging inside fixed overhead and hiding margin loss by SKU.
Third-party Lab Testing	Variable	Model as 0.6% to 0.9% of revenue, depending on product line.	Calling testing fixed when lots and revenue scale.
Production Utilities	Semi-variable	Use 0.5% of revenue for production utilities plus $1,500 monthly general utilities.	Combining all utilities as fixed and missing batch-level usage.
CO2 Extraction Equipment Maintenance	Semi-fixed	Start with $1,200 per month, then review capacity step-ups as production rises.	Assuming maintenance stays flat at higher throughput.
Digital advertising and e-commerce platform fees	Variable	Apply 7.5% of first-year revenue: 5.0% advertising plus 2.5% platform fees.	Burying freight, retesting, or sales fees inside fixed overhead.

How does break-even change from a lean launch to the Year 1 base plan and a fuller-capacity Year 5 run?

Scenario table

Fixed plant and payroll costs set the floor, while revenue mix and variable spend decide how much sales you need to cover it. The lean case sits at break-even, the base plan clears it in Month 2, and the full plan adds a wider cushion.

Planning figures are model assumptions, not guarantees; actual break-even will move with batch yield, product mix, and demand.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$64,100	$12,900	$51,083	79.7%	$0	At this level, break-even is basically flat.
Year 1 base plan	$97,100	$19,700	$51,083	79.7%	$26,300	Month 2 break-even gives a modest cushion.
Year 5 full-capacity plan	$598,300	$100,000	$74,417	83.2%	$423,900	Higher volume covers overhead well if demand holds.

What breaks first if sales soften or costs creep up?

Stress test

The base plan has a solid cushion, but a 20% sales drop, a 10% fixed-cost jump, or a 5-point margin hit can shrink it fast. Combined pressure leaves only a thin buffer, so failed lots and overhead creep matter.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$64,100	$33,000 cushion	Healthy cushion, but it depends on steady throughput.
Revenue shortfall	Monthly revenue falls 20%.	$64,100	$13,600 cushion	Slow sell-through starts to bite, even though break-even still clears.
Fixed-cost pressure	Monthly fixed costs rise 10%.	$70,500	$26,600 cushion	Unused facility hours and overhead creep cut room fast.
Margin pressure	Variable expenses rise 5 percentage points.	$68,400	$28,700 cushion	Failed lots, retesting, packaging inflation, and freight spikes drive this risk.
Combined pressure	Revenue drops 20%, fixed costs rise 10%, and margin falls 5 points.	$75,900	$1,800 cushion	One more miss here can flip profit to loss.

Can this CBD oil launch clear break-even before you sign the lease and buy equipment?

Founder checklist

Test the model against break-even before you commit. If early demand, margin, and cash do not support the Year 1 run rate, the lease, hires, and equipment will come too soon.

1Demand floor$64.1K/mo

Verify early orders can reach at least $64.1K in monthly revenue before you lock the facility, or break-even never has a fair test.

2Launch sales$97.1K/mo

Check that opening sales can scale to the Year 1 average of about $97.1K a month, because underuse will drag the plant below plan.

3Fixed load$16.5K/mo

Confirm rent, utilities, maintenance, insurance, professional services, software, and office supplies total $16.5K a month before wages, since that fixed load sets the break-even bar.

4Margin mix84% CM

Keep the Year 1 price and cost mix close to plan so contribution margin stays near 84%, because small pricing or input swings hit payback fast.

5Staffing ramp5.5 FTE

Match the first-year staffing plan of 5.5 FTE to actual throughput, and do not add extraction or production headcount until utilization proves it.

6Cash cushion$803K

Hold enough cash to reach the Month 6 low point of $803K, because capex and ramp losses peak before the business settles.