Extraction is one of the most innovative sectors in the marijuana industry, with new forms and techniques developing each year.
To stay ahead of the curve, cannabis extraction companies need to be innovating constantly and researching new product types and processing methods.
When thinking about research and development, cannabis researchers should consider:
- The importance of product innovation to stay relevant in a competitive market.
- Allocating a portion of budget and facility space for research and development (R&D).
- Implementing testing procedures to determine quality before sending products to retailers.
“R&D keeps you relevant in the market,” said Mark Micallef, head of operations at Exclusive Brands, a vertically integrated cannabis company based in Ann Arbor, Michigan. The company makes many of the typical concentrates seen in retail stores—including shatter, wax and budder—and fills its cartridges and vape pens in-house.
Jim Parco, senior vice president of manufacturing for Colorado-based Schwazze, said he tries to foster a culture of risk-taking and allowing members of the extraction team to make mistakes when trying to develop new products.
“If something breaks, it’s OK,” he said. “We’ll fix it. “
Parco said he encourages employees to bring him bad news about experiments they’ve tried. “It’s that transparency of open, honest communication” that leads to innovation, he said.
Of course, both Parco and Schwazze still maintain quality standards and demand high levels of performance.
R&D and product innovation is built into the ethos of Glass House Farms, a cannabis company based in California’s Santa Barbara County.
According to company President Graham Farrar, one way Glass House develops new products is by looking at traditional agriculture and applying similar practices.
The company is experimenting with minor cannabinoids such as CBG, THCv and CBN to help consumers experience effects beyond the traditional THC and CBD results.
“We’re always open to new ideas, and we experiment a lot,” Farrar said.
The Art of Extraction
At Exclusive Brands, a small team of extractors is dedicated to developing new ideas and techniques to help the company get ahead. Two “extraction artists,” with the help of an assistant, spend about 30-40 hours a week making new products.
“We like to come out with something new every six months, even if it’s not groundbreaking,” Micallef said. “It’s always important for any company to develop new products.”
As consumers become more sophisticated, they start looking beyond simple potency numbers and seek out other qualities such as terpenes and other cannabinoids,
“They’re all expecting higher-level product,” Micallef added.
Set Aside Money, Time, Space
Parco said Schwazze allocates about 10% of both time and budget toward R&D.
“If you don’t want to pay for it, you don’t really want it,” he said.
The company doesn’t set aside space in the facility just for R&D. Innovation is built into every square inch of the process. However, if team members want to focus on something such as a new packaging solution, they’ll find a place to work on it.
Farrar estimates Glass House spends upwards of 10% of its budget for R&D.
The company doesn’t set a specific timetable for releasing new products.
For Micallef at Exclusive Brands, budgeting for research and development requires more time than money. “We probably spend about a good 40-50 hours a week on R&D,” he said.
The R&D room at Exclusive Brands takes up about 5% of the company’s 15,000-square-foot space.
In-House Guinea Pigs
After going through the regular hoops of compliance testing, Parco relies on family and friends as well as budtenders and manufacturing associates to help beta test new products.
For example, when the company develops a new vape pen, it asks testers to try to misuse it—leave it on the dash of the car, for example, or in a pocket or in the freezer.
They then send on the product to customers and record data based on their feedback.
“We listen to that, then go back to the drawing board,” Parco said.
Glass House uses budtenders, other employees and friends of the company to help test new products. After that stage, new items will be sent to the company’s four pilot stores in California to get feedback from consumers and budtenders, then sent out more widely.
Farrar said one of the company’s popular products, a strain it calls Jellyfish, was developed after listening to friends who said typical cannabis flower was too potent.
So the company grew a CBD-dominant strain and extracted it into a tincture and vape version.
“You really have to go into it with an open mind of where the data and the science lead you,” Farrar said.
Exclusive Brands relies on a group of employees who try out the company’s new products. The testers evaluate products for a variety of qualities, including how they taste and if the hardware is working properly.
Micallef said it helps to have budtenders on board with any new products so they can encourage retail customers to try them.
“R&D keeps you relevant in the market,” he added. “If you don’t (continue creating), all these other companies will be coming out with new techniques, and you don’t want to lose your market share to other companies.”