At its core, white-label pricing reflects unit economics plus risk and market conditions. Manufacturers start with cost of goods sold (COGS)—inputs (biomass or bulk oil), labor, utilities, yield loss, packaging, and mandated testing—then layer on overhead allocation and a target margin. Robust COGS tracking is essential because cannabis producers juggle inventoriable costs that vary by product and process; getting this wrong distorts price floors and profitability.

Common deal structures

1. Cost-plus contract manufacturing (turnkey).

The producer supplies inputs and services, quotes a per-unit price, and adds a fixed markup. Minimum order quantities (MOQs), custom packaging, rush fees, and storage often appear as line items and materially change landed unit cost.

2. Tolling (“you bring the inputs”).

The brand provides biomass or crude/terpene blends; the manufacturer charges a toll (fee per gram, per batch, or per finished unit) for extraction, refinement, filling, and packaging. Tolling is distinct from contract manufacturing because material ownership and some process control stay with the client. Some providers also offer “splits” (finished goods are divided between parties) as payment in kind.

3. Royalty/licensing overlay.

When a brand’s IP or formulations are licensed, the factory price may be cost-plus, with an added royalty calculated as a percentage of sales. Industry practice centers on a percentage of wholesale or retail sell-through, though specifics vary by portfolio and leverage.

How markets and taxes shape the number

After cost and structure, market benchmarks and tax architecture influence where the final price clears. Recent wholesale data sets are particularly helpful for setting and defending price:

• LeafLink’s 2025 Wholesale Pricing Guide aggregates hundreds of thousands of SKUs across 18 markets, by category (flower, cartridges, concentrates, edibles/ingestibles, pre-rolls). Operators use it to anchor negotiations and sanity-check quotes against current market ranges.
• LeafLink’s market snapshots show how category medians move—e.g., platform flower averaged roughly ~$1,120/lb through March 2024, up ~10% YoY—context brands reference when locking multi-month white-label agreements.
• Pricing is also downstream of retail discounting: Headset notes sustained price compression and rising promos, with discounts peaking near 23% in April 2025. Each additional point of discount typically erodes gross margin, which can push manufacturers to sharpen cost or adjust quoted wholesale to preserve unit economics.

Tax policy indirectly affects wholesale math. In California, excise collection shifted from distributors to retailers in 2023; further rate changes (e.g., the scheduled move from 19% to 15% on Oct. 1, 2025) alter back-calculations for target retail and, in turn, what buyers can pay at wholesale while maintaining required margins.

A practical pricing method that holds up in negotiations

Step 1: Build a defensible COGS. Track actuals by SKU and batch (inputs, labor, utilities, testing, packaging) and include expected yield loss. This sets a real price floor.

Step 2: Choose the right structure. If the client controls inputs, favor tolling (clear fee table by operation and MOQs). If the factory sources everything, quote turnkey cost-plus with explicit surcharges (custom molds, compliance packaging changes, rush). If leveraging a recognized brand/IP, model an added royalty.

Step 3: Benchmark to market. Compare your quote to category medians and regional spreads using current wholesale reports; justify premiums with quality metrics (live resin vs. distillate, hardware specs, terpene load), service levels, and on-time performance.

Step 4: Stress-test for retail realities. Model retailer margin targets and expected promos; if downstream discounting is heavy, either lower COGS (process efficiency, packaging optimization) or redesign the deal (volume tiers, longer terms, or revenue share) to keep everyone solvent.

Step 5: Clarify terms that move price. Spell out MOQs, lead times, storage, payment terms, change-orders, and retesting triggers. Hidden fees are what sour relationships, not just headline price.

Bottom line

There isn’t a single “right” price for white-label cannabis—there’s a disciplined framework. Start with accurate COGS, select a structure (tolling, turnkey, or royalty-backed) that matches who controls inputs and IP, reference live market benchmarks by category and state, and solve backward from retailer economics and tax design. Do those consistently and the wholesale number won’t just be competitive—it will be defensible.

Learn More: Understanding Luxury Cannabis: How Premium Brands Influence Pricing