As the variety of cannabis products expands, so does the opportunity for cultivators to expand their list of services. Extraction is one such area in which a business owner can diversify and find success. Here, Precision Extraction Solutions’ Co-Founder Nick Tennant—whose work and expertise has been featured by CNN, CNBC, TIME and more—outlines what a cultivator should know to get started in this rapidly growing segment of the cannabis market.
1. What is the growth rate/future prospects of the extraction industry?
The growth rate of the extraction industry as a whole is expected to outpace the marijuana market in general. Most statistics are indicating more than a 50-percent and up to 90-percent CAGR for extraction-based businesses. As more states continue to come online with friendly marijuana laws and commercial extraction licensing, the market will continue to grow at a robust pace.
2. What are the different areas of focus for an extraction company?
Extraction businesses can focus on a number of different products like wax, shatter, budder, distillate, vape pens or infused products, such as edibles or topicals. The variety of consumer products is virtually endless and continues to grow. As in any other business, there must always be a focus on good production practices such as cost and quality control, as well as producing products for a well-defined and targeted market segment.
3. How much will it cost and how long will it take to get extraction startup operational?
Small startup labs may commence operations for less than $250,000. However, for larger industrial operations the startup cost may easily extend to the seven- and eight-figure range. Depending on scale and complexity of construction, 120 to 180 days is a typical timeframe to get from concept to completion.
4. What are the benefits of choosing a hydrocarbon extraction method?
Hydrocarbon extraction (butane and propane) is the most efficient and effective method of extraction. This is because the hydrocarbon solvents bind directly to and strip the active cannabinoids and terpenes from the plant. And unlike other methods of extraction, the hydrocarbon process picks up very little of the undesirable components of the plant. Hydrocarbon solvent is simply the fastest, most economical and commercially viable method of cannabis extraction.
5. How can an extraction business stay competitive?
Extraction business can become and stay competitive by properly planning for market demand and product matrix at startup. Hiring key talent for product development is essential, since extraction is, in essence, an art of production. Like any other industry, focusing on product quality and the marketplace ensures the extraction business will have a higher chance at long-term success.