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What Is Reasonable Compensation?


slvrvetteragtop

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It is not based on street value or going rate.  It is based on your costs and your time.  Look at your electricity, rent, nutrients, etc, then take a look at what your time is worth.  Be reasonable.  The Act approaches it from a 'covering your expenses' rather than 'commercial farmer' angle.

 

If you want to make '$50,000' a year as a caregiver (I've seen that advertised) you have to make $10,000 'profit' per patient above your costs per year or around $800 a month.  Do you have patients willing to pay you $800 a month to grow their meds, PLUS pay for the meds to cover your expenses?

 

The only way to make $50K a year as a caregiver is to grow more than you are allowed, for more patients than the Act covers.  Don't do that.

 

Set your goals reasonable, like making your expenses and maybe a car payment a month from your 5 legal patients and you should be ok.  I don't grow myself, but I can read the law.  That is what is allowed.

 

Dr. Bob

 

PS, the calculation is rather simple, use your own numbers, these have no basis in reality as I don't pay these expenses myself.

 

House Rent Per Month $600, part that covers the grow area $300

Electricity for House $400, part that covers grow room $300

Cost for nutrients $200 per month

Cost for car payment $400 per month (this is for your time in the garden- your 'profit')

 

Subtotal is $1200 per month.

 

Add to that you have 6 light bulbs, costing $100 apiece, that need to be replaced yearly ($50 per month)

Ballasts and other grow equipment is $150 per month on a yearly basis.

 

$1400 per month total for cost of grow,

 

If your patients need 7 ounces per month, you can charge them $200 per ounce.  You have to grow enough to assure they have 7 ounces available, say 10 ounces to take into account longer grow cycles, losses due to mites, etc.  If they need 14 ounces, you charge them $100 an ounce.

 

Alternatively you can charge them $1400/5 or 280 per month for 1/5 of your monthly output.

 

Another way you can do it is charge each of your 5 patients $200 per month, every month, which comes with a free ounce.  They can buy additional ounces for $100.  Some months you might sell 4 extra ounces and make your 'nut', others you will sell none and lose $400 that month, still others you will sell 8 extra and make $400 above your costs.

Edited by Dr. Bob
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It is not based on street value or going rate.  It is based on your costs and your time.  Look at your electricity, rent, nutrients, etc, then take a look at what your time is worth.  Be reasonable.  The Act approaches it from a 'covering your expenses' rather than 'commercial farmer' angle.

 

If you want to make '$50,000' a year as a caregiver (I've seen that advertised) you have to make $10,000 'profit' per patient above your costs per year or around $800 a month.  Do you have patients willing to pay you $800 a month to grow their meds, PLUS pay for the meds to cover your expenses?

 

The only way to make $50K a year as a caregiver is to grow more than you are allowed, for more patients than the Act covers.  Don't do that.

 

Set your goals reasonable, like making your expenses and maybe a car payment a month from your 5 legal patients and you should be ok.  I don't grow myself, but I can read the law.  That is what is allowed.

 

Dr. Bob

That's where the $200 an ounce comes in. I think that's the very lowest a person can go when they add up all the bills and time spent. It's like minimum wage. Some fantastic quality strains only produce an ounce or two a plant. If you are following the rules it's really hard to make $200 work for that but patients are usually your friends and you don't want to charge them anything, let alone more than $200. This isn't a very good money making adventure. When you are a patient that has to have a grow to afford it, or want to be your own source to know exactly how it is grown, then everything you can do to offset the cost of the grow is good, even when you aren't covering your expenses.
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Under recent CoA rulings, the caregivers are under the microscope.  They have to know who certified their patients (and that certification doctor holds the keys to their jail cell, so it better be one that can convince the court there was a bonafide relationship).  They have to know what is wrong with the patient.  They have to know why they chose a particular strain to treat a specific symptom in their specific patient, and roughly how much is needed to treat those symptoms.  

 

Using a logical, financially sound strategy for pricing of your output not only shows you are in compliance with the Act, it shows you are a PROFESSIONAL caregiver in the eyes of the court and can only help your case if you find yourself in court.

 

Dr. Bob

Edited by Dr. Bob
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It is whatever the market will bear and is in no way complicated. An hour at GC3 will bring you up to speed. Keep your ear to the tracks and hope the train does not come by too soon, and you nose in the wind and enjoy the fragrance. Circumstance will play in that affluent patients can be expected to pay more than others.

 

There is no profit in caregiving. Profit, in business and legal parlance, is the difference between the sale price and the cost to bring a good or service to market. Labor is a production cost. If a caregiver devalues their labor, it is only they who are screwed.

Edited by GregS
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If dude would have kept his mouth shut I don't see how there would even be discussion about newly perceived liabilities on the part of the caregivers. That seems to imply to me that there aren't any new liabilities at all. Don't talk to LEO. Nothing new.  

Shills and toadys for the COA still insist here that we have to take responsibilities that are clearly not ours under the law. Qualifications for caregivers are clearly spelled out in the act, Court of Appeals fantasy notwithstanding.

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Thank you Dr. Bob for the 'accounting refresher'.  I sort of wish I had not slept through my cost accounting courses, but they were always at 7:00am or 7:30am, and I am not a morning person!

 

Tracking the consumables (seeds, soil, nutrients, starter material); increase in electric usage (adjusting for degree heating days); and prorating reusables is easy enough.

 

The strains take variable amounts of time and work, and the output varies from plant to plant (even the same strain).  I do have the wherewithal to calculate all that, however that would take me away from what I enjoy.. gardening.

 

I guess I was hoping for something a bit simplier... like "a dispensary pays $200 per ounce, and charges $400"

 

GregS: I do not know what GC3 is.  I am new to growing marijuana.  I am an accomplished gardener, and can grow most anything... except jade plants.. they always die.  I have a 20 year old Poinsettia plant that blooms a couple times a year.

Edited by slvrvetteragtop
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Thank you Dr. Bob for the 'accounting refresher'.  I sort of wish I had not slept through my cost accounting courses, but they were always at 7:00am or 7:30am, and I am not a morning person!

 

Tracking the consumables (seeds, soil, nutrients, starter material); increase in electric usage (adjusting for degree heating days); and prorating reusables is easy enough.

 

The strains take variable amounts of time and work, and the output varies from plant to plant (even the same strain).  I do have the wherewithal to calculate all that, however that would take me away from what I enjoy.. gardening.

 

I guess I was hoping for something a bit simplier... like "a dispensary pays $200 per ounce, and charges $400"

 

GregS: I do not know what GC3 is.  I am new to growing marijuana.  I am an accomplished gardener, and can grow most anything... except jade plants.. they always die.  I have a 20 year old Poinsettia plant that blooms a couple times a year.

GC3 is the Genesee County Compassion Club. It is located in Flint, right behind Jester's Lounge, south of Richfield Rd. on Center Rd. You can learn a lot. Hope to see you there.

Edited by GregS
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So far hasn't that opinion only applied to the carded who were not compliant with the Act in the first place ?

I've never heard of a compliant caregiver forced to know to more than any vocal physician about treating the sick, cannabis effects, particular strain quantification, etc.

 

Nobody in science knows these things yet. Seems we're on our own concerning the scientific research of medical cannabis, as always. I've seen very little more strain specifics than  "Wow myan, sorry for the nausea, here try this one, it helped  this dude once I know online...." How can we even verify what "strain" we possess ? Expecting a self appointed medical cannabis grower to scientifically know which strain he would like to sell me for my ailment is a leap in my opinion, and not part of our law.

Under recent CoA rulings, the caregivers are under the microscope.  They have to know who certified their patients (and that certification doctor holds the keys to their jail cell, so it better be one that can convince the court there was a bonafide relationship).  They have to know what is wrong with the patient.  They have to know why they chose a particular strain to treat a specific symptom in their specific patient, and roughly how much is needed to treat those symptoms.  

 

Using a logical, financially sound strategy for pricing of your output not only shows you are in compliance with the Act, it shows you are a PROFESSIONAL caregiver in the eyes of the court and can only help your case if you find yourself in court.

 

Dr. Bob

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bob, you are not an accountant, a lawyer, a cg or a pt... why do feel the need to contibute outside

of your area of expertise?

I know what you mean. Some might call it a personality or character disorder. Ya think? I wonder what the DSM-5 has to say about it. OCD maybe?

 

This could make for a fun case study.

Edited by GregS
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hmmm,

 

Great logic both of you.  Question?  Does it take an accounting degree to run a successful business and balance the checkbook?  Didn't think so.

 

As usual, thank you for your valuable contribution to the discussion.

 

Dr. Bob

 

ps, hope those that actually want information found my post helpful.  It was designed not only to help with the actual question, but put you in a good position to justify your actions if you are called into court.  Do it and you will shine before a jury. 

 

That last comment isn't from a lawyer, but IS from someone that has actual courtroom experience.  Take it for what it is worth.

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Per the MMMA, a CG can receive "compensation for cost."  The word, "reasonable" doesn't appear at all, so it might lessen the confusion if we avoid use of the term altogether and determine what does "compensation for cost" actually mean?

 

Per Webster:

 

Cost:

1
a :  the amount or equivalent paid or charged for something :  price
 
b :  the outlay or expenditure (as of effort or sacrifice) made to achieve an object

 

 

Clearly, "cost" would include out-of-pocket expenses (rent for space, equipment to include interest and/or depreciation, consumables, seeds etc.).

 

Cost also includes effort.  What is your effort worth?  The sacrifice you make to have the available time to work the garden, makes deliveries, etc.  What exactly is that sacrifice?  It varies from person to person.

 

I know an ER Doc who grosses about $250k/year for working about 24 hours per week - roughly $200/hour.  He could spend as many hours in the ER as he wants and make more money.  But if he decided to spend 10 hours per week caregiving rather than those 10 hours ER Doc-ing, the cost/sacrifice to him is $2,000/week.  Another guy I know is a construction worker making $20/hour.  He is also a caregiver and gives up overtime in order do his caregiving tasks.  So his sacrifice is $30/hour in order to sit there and trim meds.  I have another friend who works in a factory for $8/hr and is also a CG.  When he gives up overtime ($12/hr) in order to have time for his caregiving, his cost/sacrifice to caregive is $12/hour.

 

It is fairly easy to track out-of-pocket expenses.  But once a CG starts charging for his time, he needs to be able to justify how much he charges.  So let's say there is an average of about 3 hours of labor per oz of meds produced/delivered.  The Doc could probably justify $600/oz for his time good luck with that LOL)....the construction worker $90 per oz, and the factory worker $36.

 

Where folks might run into trouble is if the going rate for their labor is $20/hour but they want to charge $50/hour for their time caregiving.  There is no justification that their time is worth/costs that much.

 

So I generally believe that a CG should not make any more (net) per hour caregiving than he could make at a job he is qualified to do.

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What you are leaving out is that if the doc takes a job at McDonald's, he cannot get $200 an hour simply because he is a doctor.

 

Different jobs have different values.  What reasonable compensation for a caregiver/grower is depends on what folks are willing to pay for those services.  I would venture a guess that $10 is too low and $200 is too high.  One way of looking at it is the replacement cost of a caregiver.

 

I did that once with a secretary at a clinic.  She wanted $50 a patient, I replaced her for $10 an hour.  What she did was worth $10 an hour.  That is simple business economics.  If a caregiver feels they are worth $50 and hour and others feel they are worth $30, patients and the market will decide if their meds are worth more.  If they are, they will come, if not, they will go.

 

I charge a certain price for my services.  Others are cheaper, yet folks continue to come to me.  The market speaks and acknowledges quality and price.

 

Dr. Bob

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I think the part "Reasonable" is for the courts to determine, and for you to be prepared for.. if you grew one plant under ten 1k watt bulbs, produced one ounce of meds, you find yourself in court, and explained it costs five thousand dollars to grow that one ounce and sold that ounce for a thousand dollars, you should be alright.. But if you grow one plant under a 13w fluorescent and sold it for 300 an ounce, your making profit and they won't like that.. just my opinion..  I don't think the judge would like it if you gave meds away for free... but that's my thought.  

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