Guest Column: Due Diligence Important When Starting Cannabis Concentrates Product Line

By Andy Joseph

Medical marijuana is quickly transitioning into a mainstream industry, as evidenced by the growing acceptance of MMJ across the country and the passage of favorable cannabis laws in an increasing number of states.

A big reason for this trend is the growing popularity of alternative consumption methods that don’t scream “stoner,” such as vaporizing pens, dabs and infused products. All of these focus on derivatives of cannabis concentrates, the essential oil of the plant.

This part of the industry is growing rapidly: Some dispensaries are seeing sizable month-over-month revenue growth in concentrates, and a fair share report that these products account for as much as 50% of their sales.

Unlike the traditional food or natural product markets – which rely on large manufacturing facilities with nationwide shipping and distribution networks – the production of cannabis concentrates is largely being performed by small local or regional operations. In other words, many dispensaries start making their own concentrates even though they have little or no experience with the process or the equipment involved, which opens the door for mistakes and inefficiencies in an increasingly important part of their business.

If you’re looking to jump into the concentrates game, here’s a brief primer on the production process and some tips and questions to ask – as well as some potential pitfalls to avoid – along the way:

Methods of Concentration

The first thing dispensary owners looking to make their own concentrates need to know is that there are several methods that can be employed for botanical oil extractions. All of them require the same core process: extract the oils, waxes and/or other elements that contain the desired compounds from the bulk plant material.

There are basically two mechanisms in which the extraction can be handled – mechanical or chemical. Mechanical methods include pressing, water extraction, dry ice extraction and trimming specific flowers or foliage from the plan. Chemical methods generally employ a solvent that can dissolve the desired oils/waxes in order to separate them from the rest of the plant material. The solvent may be left in the oil mixture, such as when using butter, or it can be removed from the extracted oil. Removal of the solvent is typically required if the solvent will adversely affect the taste or quality of the product, is unsafe for consumption, or is unstable at atmospheric conditions. Ethanol, hexane, iso-butane, propane and carbon dioxide are examples of solvents that are typically removed from the extracted oil.

There are benefits and drawbacks to each method, so be sure to perform your due diligence before choosing one.

Equipment

Once you choose your desired method, the next step is to start looking for equipment. This is arguably the most important consideration after the extraction method itself. There are questions you should ask before purchasing concentrate equipment:

  • Experience – Does the equipment manufacturer have the necessary experience to safely engineer, design, build, test and refine the equipment to meet the specific extraction requirements?  An experienced equipment manufacturer will have well-rounded expertise in the areas of engineering, design and fabrication for the given process they are marketing.
  • Manufacturer vs. re-seller – Does the equipment supplier manufacture the equipment themselves, or are they reselling or private labeling another company’s equipment? Reselling can work if it is done properly and the manufacturer supports the reseller. This is especially important if the equipment is being imported due to time zone and language barriers.
  • Custom vs. production – Custom equipment, or “one-offs,” are great for a specific non-typical application but usually lack the field testing necessary for long-term reliability. How can you tell if a particular piece of equipment is a one-off? Long lead times and large down payments to purchase the system components are red flags. Documentation, or lack thereof, can be another indication. Don’t be afraid to ask for engineering drawings, documentation, operating and maintenance manuals, or performance data.
  • Food-grade – Is the equipment engineered and designed to support Good Manufacturing Procedures that are required for food-grade applications?  Materials that come in contact with products that are to be consumed should be stainless steel, easily cleaned, have no inaccessible areas, and be free of grooves and crevices that can trap materials and grow bacteria.
  • Warranty – The fine print matters. Read it. Are consumable items covered under the warranty? If not, ask for specificity regarding what items are considered consumable. How long will the warranty work take if it does become necessary?
  • Updates – Will the equipment be updated with newer technology and future improvements? Is there a cost associated with the updates?
  • Customer service – Is training and customer support included? How will questions be answered and issues be resolved?
  • Legality – Is the equipment legal in your state? This question has become more poignant since passage of Washington State’s adult-use rules, which require that all extractions be performed using closed-loop systems. Talk to your manufacturer regarding their systems process and verify that it is compliant with regulations in your state of operation.

Pre- and Post-Processing Requirements

After researching extraction methods and finding an equipment supplier it is important to also understand what additional handling the chosen extraction method will require. Will the material need to be dried before processing or ground to a specific particle size? Will the extracted oil be useable after the extraction or will it require post-processing? Nearly every extraction method will require some degree of both pre- and post-processing.

Other Considerations

If you choose one of the more commonly used cannabis extraction methods that rely heavily on equipment, there are other considerations to take into account:

  • Recirculating hydrocarbon extractions – Hydrocarbon extractions are popular due to lower cost requirements and higher extraction efficiencies. However, the flammability of a compressed hydrocarbon gas requires some additional equipment considerations. The equipment – as well as the tools required to operate the equipment – must not generate heat, sparks or flames that can cause ignition of the compressed gas. Electrical components must be rated according to the appropriate NEMA and NFPA hazardous material requirements. Operation of the equipment must also be conducted in an appropriate facility for flammable gasses according to NFPA 70 and other local requirements. Extraction and storage vessels must have proper safety equipment like relief valves or rupture discs, and the discharge must be vented to a suitable safe location or container. In addition, post-purging of the extracted oil is almost always required due to the low boiling temperature of hydrocarbons. The spent material also needs to be stored in a well-ventilated area while it outgasses captured hydrocarbons.
  • CO2 extractions – The high pressures required for CO2 to become a liquid or supercritical fluid require pressure vessels and components to be designed, built and tested in accordance with ASME codes. While CO2 is not flammable like hydrocarbons, the high pressures do require advanced manufacturing and inspection methods to maintain a proper safety margin. Like hydrocarbon systems, all CO2 vessels must have proper safety equipment like relief valves or rupture discs.

As the health and safety benefits of concentrates becomes better understood and continues to gain mainstream acceptance, the opportunity for cannabis concentrate processing businesses will continue to grow. Performing due diligence in the areas of equipment, process, and vendor selection will be crucial for long-term success.

Andy Joseph is president of Apeks Supercritical, which makes CO2 botanical oil extraction systems for the medical cannabis industry.

Daily News | Ancillary Marijuana Companies

 9 Comments

  1. Julie August 7, 2013
  2. Ean Seeb August 7, 2013
  3. Orlando C August 7, 2013
  4. Jeremy Anderson August 8, 2013
  5. Andy Joseph August 10, 2013
  6. Paul Coates August 14, 2013
  7. billy August 14, 2013
  8. Jeremy Anderson August 15, 2013
  9. jason deno August 20, 2013

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