Cannabis extraction, sometimes referred to as processing, is one of the fastest growing sectors in the industry. In fact, over 50 percent of cannabis sales are concentrates and infused products created by extraction. To give you an idea, Illinois’ medical cannabis program in 2018 saw concentrates and infused products out-sell flower for the first time since its inception. Let’s take a closer look to better understand what extraction entails.
What is Cannabis Extraction?
Extraction refers to the conversion of target molecules in cannabis raw material into a usable form. The process removes the oil found in the trichomes from the cannabis plant and targets and collects the most potent compounds from the plants, including THC, CBD, and terpenes, among others.
Why is it Important?
For one, cannabis extraction creates versatility for products and methods of administration, providing many viable options for consumers. Cannabis extractions are also known as concentrates, and they are stronger than flower, presenting with higher cannabinoid and THC content. According to Maximum Yield, “Extraction is a common practice performed for a number of different reasons, ranging from increasing marijuana’s medical benefits to producing a more potent recreational product.”
What are the Methods of Extraction and Where does it Take Place?
The three most popular methods of extraction are CO2, hydrocarbon, and ethanol. CO2 extraction occurs when carbon dioxide is pressurized in metal tanks until it converts into a supercritical fluid. As MJBiz Daily describes it, “The fluid pulls out the desirable compounds from the flower. The fluid is then separated, leaving only concentrates.” During hydrocarbon extraction, butane or propane dissolves raw cannabis matter and collects cannabinoids and terpenes. “The solvent with the essential oils is then heated up to evaporate off the butane or propane, leaving behind the extract.” Ethanol extraction is performed by soaking raw cannabis in ethanol to capture trichomes into the solvent. “The cannabis is then removed; the liquid is filtered and the alcohol purged from the extracted material.”
The extraction method often depends on the facility. According to Leafly, “Some shops are devoted to CO2-based extractions, others operate mostly on butane-centric machinery, and a few employ machines of both stripes and more. Some will have large-scale machines for extracting cannabinoids—as well as other important cannabis compounds like terpenes—from big batches of flower, and smaller setups that let them conduct experiments on the side.”
“Every step of the extraction process demands a balance of art and science, beginning with the selection of starting material and ending with the purging and storage process.”
What Products are Created from Extraction?
Extractions gives cannabis users options when it comes to consumption. “Entrepreneurs have turned the full power of modern chemistry on cannabis,” according to Leafly. “Their goal has been to find ways to extract the cannabinoids giving the plant its character and effects, providing a way to enjoy the sensations associated with cannabis without having to smoke the actual flower.”
Products in highest demand include:
- Tinctures: Cannabis-infused liquid in bottles with droppers that are administered sublingually or under the tongue
- Capsules: Cannabis concentrates ingested orally in capsule form, ranging from single cannabinoid to full-spectrum or strain-specific oil
- Vaporizer Cartridges: Oil-filled cartridges that connect to a battery that are vaporized
- Hash: Vaporized, dabbed, or smoked, hash is a pressed concentration of the cannabis plant’s sticky glands
- Shatter, Wax, and Dabbable Oils: Ingested orally, these are oils refined by a solvent like butane or CO2
Just like with a cultivation and retail business, an extraction facility requires a license to operate. Extraction laws, licensing processes, and regulations vary by state and municipality. That’s the first step, and understanding the intricacies and nuances of extraction comes next. Per Leafly, “The knowledge and care that goes into extracting oils is as complicated as the art of growing the plants they are derived from. Every step of the extraction process demands a balance of art and science, beginning with the selection of starting material and ending with the purging and storage process.”
The green rush is on in the Sooner State.
Oklahoma–renowned for its once harsh possession penalties–is now a land of opportunity for medical cannabis businesses. Among the nation’s most progressive medical cannabis programs, Oklahoma has hit the ground running in only six months and is light years ahead of other states delayed by stagnating legislation.
One of Oklahoma’s greatest differentiators is its reciprocity program that allows patients with out-of-state medical cannabis cards to qualify for renewable, temporary licenses.
The Oklahoma medical cannabis market could realize $250 million in annual sales in its first few years. According to the Oklahoma Medical Marijuana Authority, more than 2,200 business licenses had been issued, with an approved patient pool of more than 24,000 as of December, 2018. This speed-to-market is attributed to the fact that SQ 788 bypassed a special legislative session likely to have imposed restrictions, but instead prioritized patient-needs to get immediate access to cannabis treatments. The result is that there is no limit on business licenses, and doctors are free to recommend medical cannabis to patients for any condition they deem appropriate. In addition, the program is all-encompassing, prohibiting municipalities, cities, or counties from opting out.
High Retail & Wholesale Prices
Though there’s no cap on business licenses, supply is tight and product demand high, which is good news for dispensaries. Patients are lining up en masse for the state’s program, creating premium value for inventory. An ounce of cannabis flower, for example, averages $400, double the cost of Arizona’s medical cannabis market. Cultivation is prospering as well, with wholesale prices averaging between $3,500 – $4,500 per pound–at least twice that of competing markets.
One of Oklahoma’s greatest differentiators is its reciprocity program that allows patients with out-of-state medical cannabis cards to qualify for renewable, temporary licenses. They cost $100, are valid for 30 days, and permit patients to purchase, use, and even grow cannabis in Oklahoma. This provision is especially enticing for Arkansan customers as a stopgap while that program ramps up.
Some industry insiders caution that the possibility of over-cultivation and low prices will drive down retail and wholesale prices as it’s happened in other markets. Still, with so much success in its nascent stage and the evolution of regulations, Oklahoma may find a way to stabilize supply, increase demand, and sustain momentum.