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<br />Computer and Internet Expenses – These expenses encompass licensing costs paid to third party <br />software vendors to track and account for all acquired products, supplier information, and maintaining <br />required local and State patient information. Blüm SL estimates that the annual start-up cost would be <br />approximately $13,000, increasing to $36,500 by the third year for computer and internet expenses. <br /> <br />Conferences and Training – These are costs associated with continually educating staff so they may <br />better serve the patient community. There are conferences throughout California where staff will be <br />required to periodically further their education with respect to better serving Blüm SL‘s patients and <br />community. Blüm SL will initially invest approximately $25,000, increasing to $40,000 annually by year <br />three for training staff and leadership. <br /> <br />Depreciation Expense – These are allocated costs over the estimated useful life of an asset. The <br />assets that will be depreciated are improvements to the facility, including furniture and fixtures, <br />security equipment, and computers required for day-to-day operations. This depreciation and <br />equipment replacement schedule will be estimated at $150,000 in year one, increasing to $170,000 <br />annually in year three. <br /> <br />Insurance Expense – This is expense incurred and paid for property and casualty insurance, product <br />liability and general liability insurance to cover Blüm SL operation. At start-up this expense is expected <br />to be approximately $36,000, increasing to $42,000 annually by year three of operations. <br /> <br />Miscellaneous Expense – These are miscellaneous costs that arise in the course of business that do <br />not currently have a specific category outlined in the projections. Submitted calculations include a <br />miscellaneous expense line item at start-up of approximately $18,000 and growing to $36,000 by year <br />three of operations. Through this contingency Blüm SL would be able to address any unexpected costs <br />such as unforeseeable repair and alterations to the business. <br /> <br />Office Supplies – This includes office costs required to run the day-to-day operations of the dispensary, <br />including but not limited to computers, printer ink, paper, labels, etc. At start-up office supplies are <br />estimated to cost approximately $50,000 and grow to $60,000 by year three of operations. <br /> <br />Payroll Expenses – These are costs required to pay dispensary employees, including payroll taxes <br />and workmen’s compensation insurance healthcare insurance and 401k matching contributions. Blüm <br />SL will pay above market living base wages, in addition to providing full health benefits (medical, <br />dental and vision) and a 401k plan, with employer matching up to four percent (4%). Employees will <br />receive continual education including on the job training as well as attending conferences to better <br />enable them to serve Blüm SL‘s medical cannabis patients. At start-up Blüm SL expects payroll <br />expenses to be approximately $659,000, increasing to $1,078,000 by year three of operations. This <br />estimate is based on the payroll expense and operating experience at the start of the Blüm Oakland <br />facility.