How to Calculate Cost per Unit in Infused Pre‑Roll Manufacturing
When it comes to making infused pre-rolls, understanding your cost per unit isn't just a financial formality; it's the foundation of a sustainable cannabis business. Every dollar you spend on flowers, concentrate, labour, and packaging directly impacts your pricing, profit margins, and long-term growth.
Whether you're a craft operator producing small batches or a large-scale manufacturer scaling up rapidly, having a clear breakdown of your production costs helps you make more informed decisions. It gives you the confidence to set prices, improve efficiency, and prepare for market shifts.
In this blog, we'll walk you through a practical, step-by-step approach to calculating your actual cost per unit. From raw materials and infusion systems to labour, overhead, and even waste adjustments, we'll cover it all.
Identifying Direct Production Material Costs
First, you must establish all direct material inputs for a single infused pre‑roll. These are costs that occur each time you produce a product, so every gram, cone, and package counts.
Key material components include:
Cannabis flower: Calculate the cost per gram and multiply by the amount in each pre‑roll.
Infusion concentrate: Whether using distillate, rosin, or resin, measure cost per unit of weight or volume.
Rolling materials: The cost of cones, filters, papers, tips, and every other piece must be included.
Packaging inputs: Child-resistant tube or bag, tamper seal, printed label, broken down per unit.
Why this matters:
Materials typically account for 50–70% of your total cost.
Tracking changes reveals opportunities to negotiate better rates or switch to a more favourable supplier.
Accurate material cost ensures you don't underprice or overprice products.
Direct material costs form the foundation of your cost model. The next step is layering in labour and overhead.
Calculating Labour and Overhead Expenses
Once material costs are clear, it's time to account for the people and facilities involved in the production process. These are indirect costs, but they are essential for accurate unit costing.
Labour cost breakdown:
Track the hours spent rolling, infusing, and packaging.
Multiply by wage plus benefits per hour.
Divide the total labour cost by the number of units produced.
Overhead cost items:
Rent, utilities, insurance, cleaning, and any other expenses tied to the production space.
Equipment maintenance and depreciation include machines used for infusion.
Administrative support, supervisors, managers, and quality control.
Distributing overhead:
Calculate total overhead per month.
Divide by the total units in that period.
Add that per‑unit number to your labour-included material total.
For example, if the labour cost per unit is $0.40 and the overhead per unit is $0.25, your labour-overhead add-on is $0.65. Pairing it with materials, you now have a more complete cost that reflects both physical and human resources invested.
Allocating Equipment Infusion Technology Costs
If you're using automated infusion tools like Jiko or Jiko Plus from Sorting Robotics, you need to spread their costs appropriately across production.
Include these variables:
Depreciation or finance cost: Divide the equipment cost over its expected life.
Consumable supplies, including needles, tubes, and cleaning wipes, all require tracking.
Maintenance and repairs: Even self-cleaning machines incur upkeep.
Operational labour: Staff time for setup, monitoring, and cleaning.
By integrating infusion machine costs, you recognise automation benefits while ensuring financial accuracy; otherwise, you may overestimate savings or understate investment.
Adjusting for Waste and Yield Variability
No production runs perfectly. You must factor in loss during processing; otherwise, your per‑unit cost looks artificially low.
Sources of waste:
Spillage or residue loss during infusion.
Trimming or defective pre‑rolls.
Purging amounts during QC or lab work.
How to calculate adjustments:
Analyze historical yield: e.g., out of 1000 grams used, only 950 grams end up in completed units, resulting in a 5% waste rate.
If the material cost is $10 per unit, adjust as follows: $10 × 1.05 = $10.50.
Similarly, adjust labour and overhead if staff spent time on failed units.
These adjustments reflect the actual cost of production, not just ideal scenarios. This step is vital to avoid underpricing or reduced margins.
Including Packaging and Fulfilment Cost
The final layer is styling and delivering your product. Packaging and fulfilment may feel secondary, but often represent 10–20% of the cost.
Breakdown of packaging costs:
Primary packaging: Tin, tube, glass jar, per unit charge.
Labels and tamper seals: Printed with potency, warnings, and often regulatory information.
Outer packaging: Shipping cartons for bulk orders.
Fulfilment costs:
Labour for final packing.
Automated labelling or case forming.
Shipping logistics, box weight, and handling.
Add up these costs and divide by the total run quantity to reach a per‑unit figure. Combine with previous layers (materials, labour, infusion, waste) to get your full cost per unit.
Frequently Asked Questions
What is "cost per unit" in infused pre-roll manufacturing?
The cost per unit is the total expense incurred to produce one infused pre-roll. It includes all materials, labor, packaging, and overhead, divided by the number of units made. This figure helps you set prices, track profitability, and make informed production decisions.
What are the main components of the cost per unit for infused pre-rolls?
The core components include raw materials (flower, concentrates, papers), labor for rolling and infusion, compliant packaging, facility overhead, and applicable taxes. Each of these factors directly affects your final unit cost and should be closely tracked.
How do you calculate the cost per unit for infused pre-rolls?
Add up all fixed costs (rent, equipment) and variable costs (materials, labor, packaging) for a given production period. Then divide that total by the number of infused pre-rolls produced. The result is your actual cost per unit.
What factors can impact the cost per unit in infused pre-roll manufacturing?
Costs are influenced by factors such as material quality, production scale, automation, packaging choices, and location-specific regulations. Higher volume and automation usually lower costs, while premium materials and stricter compliance rules can raise them.
What are the typical cost and price ranges for infused pre-rolls?
While production costs vary, retail prices generally range from $10 to $30 per unit. Materials and labor are the most significant contributors to the cost. Brands can reduce costs through bulk production, automation, and careful supplier management.
Use Data to Build Profit
Calculating the cost per unit in infused pre-roll manufacturing is crucial to achieving profitable operations. By examining material, labor, equipment, waste, packaging, and fulfillment, your numbers accurately reflect actual value and reveal opportunities for efficiency.
If you're ready to automate infusion and gain real‑time data on usage, yields, and costs, check out Jiko and Stardust by Sorting Robotics. These systems seamlessly integrate production analytics with infusion operations, helping you control quality and price at scale.
Contact Sorting Robotics to schedule a demo and discover how precise cost tracking can enhance your infupre-roll business.
