When establishing a cannabis extract business – either for hemp or marijuana – a crucial decision is choosing the method by which your company will obtain concentrations from the plant. Your choice will impact quality, price, speed, yield and more.

Luckily, the methods of extraction (though not necessarily all the techniques) are the same for both forms of cannabis. Unfortunately, that’s where the simplicity ends. Let’s explore the pros and cons of each of the three main methods.

But first, why are we extracting?

The rise in popularity of CBD has driven a boom in hemp processing, as the delicate trichomes on the flowers hold the highest concentration of major and minor cannabinoids, as well as terpenes. The same is true for most popular strains of marijuana, but in this case extraction is a means to concentrate THC as the primary output.

More than one hundred unique cannabinoids have been identified, and as markets mature, separating and studying the effects of individual compounds will become a business unto itself. Already companies have sprung up selling terpenes as stand-alone additives to enhance smell and taste. This growth will drive ancillary markets with means to separate compounds.

Three major extraction methods

There are three dominant methods of solvent-based cannabinoid extraction: CO2, Alcohol (ethyl) and Hydrocarbon (butane, propane). In this article we’ll touch on the history of each, and the pros and cons. There is no single “right way” – your choice depends on multiple variables.

 

Carbon Dioxide

CO2 was an early entry into the legal cannabis market, building on a strong history from similar industries. From the beginning, there was sophisticated equipment ready to use, leading to its mass adoption. It was the first method to produce shelf stable oil for vaporizer cartridges.

PROS

• Automated equipment
• “Tunable” solvent
• Ability to perform rudimentary fractionation

CONS

• High capital cost & low throughput in comparison to other methods
• Requires significant purification post-extraction to create a consumer-ready product
• Research & consumer preference are shifting to terpene-rich, full-spectrum; which CO2 cannot produce

Ethyl Alcohol

Alcohol has been used for years to separate cannabinoids, but professional grade equipment was late to the cannabis market. It has been popularized as both a professional and at-home method by the rise of so-called “Rick Simpson Oil.” In the cannabis industry, it is often used for high throughput production of distillate and isolate.

 

PROS

• Automated equipment
• High throughput compared to capital expenditure

CONS

• Requires multiple post-processing steps to produce consumer-ready product
• Low quality; cannot produce true full-spectrum extracts
• The boiling point of alcohol and terpenes are similar, thus terpenes are striped when removing the alcohol

Hydrocarbon

The most recent addition to the commercial extraction business utilizes hydrocarbons like butane and propane (or a blend) and had a rocky grassroots beginning. Cannabis connoisseurs experimenting for high quality created illegal homemade extractors, leading to serious accidents, and an ongoing stigma around safety issues.

However, professional engineers have taken this method and transformed the process into a safe one, with highly automated machines replacing home cooks. And as consumer education evolves, especially around the benefits of full-spectrum extracts, hydrocarbon is quickly gaining popularity.

PROS

• Fully automated systems
• Only method to produce live resin oil (see sidebar)
• Much higher throughput (per cap ex) than CO2
• Little post processing required

CONS

• Requires (C1D1) area for operation
• Lower throughput than ethanol if producing low-quality product
• Ongoing myths around safety and toxicity

What is Live Resin?

Known as “live resin” in the marijuana industry and “live oil” in CBD circles, this extract is made from fresh – or flash-frozen – cannabis plant material that was not dried or cured. The benefits include:

• 30% more natural flavor from preserved natural terpenes
• Highest quality strain-specific extracts
• No cutting agents (0% dilution)
• Best entourage effect: terpenes interact with cannabinoids to create a more complex and sought-after experience
• Product is usually dabbed, but can also be mixed with oils for tinctures and vapes

Considerations

In summary, there are various reasons producers would choose one extraction method over another. Capital and operating costs are obviously one, but the business plan should also consider what sector of the cannabis market is being targeted. What type and range of extract products are desired? What is the quality required? Are you willing to sacrifice speed and volume of throughput for quality? Physical space and safety requirements/permits needed should also be evaluated. And finally, consideration of the team’s experience and skill should come into play, as all methods described here should only be undertaken by professionals.