My apologies to regular readers of this blog for the hiatus in my postings. I have been traveling a lot recently and just haven’t had time to write. However. I intend to go back to my regular posting schedule, and hope that you will continue to enjoy reading this blog. Thanks.
So, if you are involved in building a new Cannabis growing operation, or are working on developing one, or even if you already have one in operation, you may want to consider this unusual little strategy for enhancing your long-term profits.
First let me set the stage for you.
Copper has just dropped below $2/lb. in commodity markets. It is expected to drop further to $1.50 or less. $2/lb. is a huge drop from $4/lb. in 2008/09, but is still above the 1980’s $1/lb. or so. So a further fall in price to nearer $1.50/lb. sometime in the future would probably put a floor under further price drops and set the stage for an eventual rise in price.
A bar of pure, solid copper measuring 2” x 4” x 36” weighs 93 pounds. At $2/lb. that bar costs $186. A vertical column of these bars standing 48” tall would take 24 bars costing $4464.
So as you can see, a solid copper wall 30 feet long and 4 feet high and 4” thick would incorporate $44,464 worth of copper @ $2/lb.
Now, here’s the sweet spot.
Question: why would anyone want to spend $45K on a copper wall or equivalent structure in their grow operation?
Answer: because you can depreciate the cost of that wall or other 100% copper structure just as you depreciate the other materials costs of your commercial building, and wait a few years until the price goes as much higher as you would like and the copper wall has depreciated as much as you want, and then tear out and sell those industrial-grade pure copper bars for a nice little piece of cash.
If you’re building or upgrading your commercial grow operation with this solid copper wall, or an equivalent structure, it could serve any purpose as long as it can easily be torn out down the road. If your expense is ever questioned, which seems highly unlikely since it will be only one of hundreds of building materials, and these building materials are not depreciated on separate schedules but as a whole. So basically, who is going to know what you are doing – unless you can’t resist telling others how smart you are. There are also all kinds of reasons for wanting a metal wall – everything from physical and electronic security of the premises to serving as a heat sink for temperature stabilization.
You could use any kind of metal – even precious metals – and get the same results, but of course if you were using Gold or Silver bars you would potentially have greater security issues. Still, wouldn’t it be fun to own a huge stash of precious metal that was 100% paid for by the US government through completely legitimate depreciation?
If you appreciate out-of-the-box thinking and you would like to have this this kind of brainpower on your side I am available as a consultant. Just drop me an email & we can talk.