Browsing local constraints and emerging certifications in the extractive market


The cannabis extraction market is exciting. With the forecast that the US market will reach $ 5.94 billion in 2026 according to Facts and Facts, and the global market of $ 28.5 billion in 2027, according to Grand View Research, everyone is taking action .

What these compelling figures do not describe is the continued volatility and real-world limitations that cannabis extractors have in scaling up their production.

Growing up it is not always easy in the extraction space. Extractors must navigate the ever-changing landscape of new markets, regulations and consumer demands, while remaining profitable.

Growing an extractive business is a matter of flexibility and future investments. Because it is not always possible to spin as a processor, planning for growth from the beginning is the key to success.

So what can a concentrate maker plan for today to ensure that future growth is as smooth as possible?

Frustrations and pain points common in the mining industry

Photo courtesy of Nature’s Lab Extractions.

Each of the cannabis processors navigates unique sets of circumstances depending on the state and even the county where they operate. However, despite the high degree of regional variability, several common pain points are common.

First, it is the astronomical start-up cost. Almost all interviewees for this piece mentioned how tight the budgets are, not only restricted to the initial construction, but also to the future potential of an installation.

Cutting corners in the early days often puts significant limitations on future expansion.

Marcus Moates, owner and founder of Laboratory extractions from nature, has established operations nationwide, including California, Nevada and Oklahoma.

In their experience, “most multistate operators spend so much money that when they come in with the right set of consultants, they’ve already spent excessive amounts of money and just don’t want to spend more.”

If adjustments are needed, Moates has verified that these operators have run out and the capital has dried up. Facilities are forced to operate current systems, often to the detriment of product quality and future growth.

A second common frustration occurs during expansion into new markets.

Through the country, there is a mosaic of legislation and regulation that covers everything that is cannabis. Most multistate extractors face a whole new set of challenges in every state and often in every county.

For example, the local county fire commissioner plays an important role not only in determining how many cannabis operations (if any) there are in his district, but also in what types of operations they can perform.

Not all counties are open to all solvents, and many impose restrictions on volatiles such as butane.

Moates detailed how Nature Lab Extractions works with a type 6 non-volatile solvent extraction license in California because securing a type 7 volatile is almost impossible.

It is not the only processor that has discovered that the expansion of facilities is largely restricted by local regulation on the same solvents.

Plan to pivot according to local limitations

Spine. Photo courtesy of Timothy Revenko.

What is clear to all extraction facilities are the limitations of the local environment. What are the regional restrictions on the handling of volatile solvents? What does the local landscape offer for the raw material? Once the parameters are set, it is possible to scale them.

For example, if the plan is to expand a hydrocarbon extraction operation, there are likely to be regional limitations for on-site capacity. If there is no room to increase physical infrastructure because the local fire commissioner is wary of higher concentrations of butane on the site, what other options are there?

In this case, increasing production (and profits) can simply be a numbers game. Instead of new equipment, can new software help improve overall system efficiency across the entire supply chain? Backbone is one of these options: a supply chain and compliance tracking software that integrates directly into the production plant.

As Head of Product Erika Tingey explained, “Backbone is specifically targeted at manufacturing and the entire supply chain” to reduce the burden of compliance data input and help extractors make data-based adjustments to the whole supply chain.

Erika Tingey, Headbone Product Manager.

In another example, Moates opened up about another local limitation that forced a dramatic pivot. He strategically adjusted plans for Missouri due to the low quality of local raw materials.

He described how “the city is determined to help you get started. The state is determined to help you move forward. But the problem is that as soon as you get started, there’s no material. And a lot of the material available is of very, very low quality, we will say “. In this new market, Moates plans to focus on distillate, which does not require the highest quality inputs for the purity of the outputs.

While Nature’s Lab Extracts produces top quality high terpene full spectrum extracts in other markets, cultivation just starting out in Missouri. In this case, it is not the local regulations that dictate its operation but the available product.

Future investments in equipment

Kellan Finney, co-founder and chief financial officer of the Eighth Revolution.

As the cannabis market explodes, many equipment manufacturing companies have turned their marketing to industry-oriented. There is a lot of money to be made from cannabis, and these manufacturers are eager to get it
on board.

However, not all extraction equipment will operate in a mature cannabis market. Very soon, regulators are expected to double in particular equipment certifications for extractors.

Both Bryan Fields (co-founder and CEO) and Kellan Finney (co-founder and chief scientific officer) of Eighth Revolution warn against cutting costs on cheap, non-certified equipment.

Eight Revolution approaches the cannabis and hemp industry with an analytical mindset, to provide a quick approach to an industry facing ongoing change. Already, in their short two years of operation, they have helped several large extractors face many of these team challenges.

Fields and Finney expect several layers of certification to be required on every piece of equipment that touches the plant, including the UI, NRDL, and GMP. Much of the current extraction equipment used in the industry will not cut it.

As Finney detailed, “equipment manufacturers saw [cannabis] as an exciting opportunity to sell equipment in space. ”However, only equipment manufacturers with experience in food-related industries can understand the importance of certain components to safety standards.

For example, certification can cover everything from metal composition (316 grade steel) to welding maps, to clear visualizations of these features on each piece of equipment.

In the very near future, Eighth Revolution predicts that all ripe equipment in mature markets will have high requirements for equipment certifications. According to Fields, “a misunderstanding of what is needed will be revealing for the operations currently in space.”

Any processor that wants to scale must consider the upcoming certification requirements. It is often not possible to certify the equipment retroactively.

Bryan clarified, “It’s not as easy as putting a sticker on some of them. It will take a substantial amount of R&D to prepare and certify this equipment.” He has already witnessed how an extractor came with a six-digit paper clipper, expensive and without certification in hand.

Operators will need to plan to upgrade existing machines and ensure that all new purchases are within expected parameters.

Conclusions on the scale in the extraction of industry experts

Whether they are just starting out or preparing for growth, cannabis extractors face a complicated puzzle of regulation, limitations, and future variability. There are three critical conclusions from many conversations with industry experts.

First of all, cannabis extraction is a game that is best played by brands with deep pockets. Cutting corners in the early stages will not make it any easier in the long run. Regardless of the solvent or process, making smart investments in certified equipment will pay off as the market matures.

Second, take the time to understand and work on local limitations. Close collaboration with local firefighters is just one example. It is also crucial to understand the local supply of raw materials. Implement a detailed data analysis tool to intelligently scale parameters.

Third, plan for a future where cannabis extraction requires intensive certifications, such as UI, NRDL, and GMP. Buying temporary, non-certified machines can save you money today, but it could lead to headaches and nightmare scenarios of the six-digit paperweight in the near future.

Scaling in extraction is not as simple as adding more machines and more solvents. There are real and local limitations to navigation and an imminent regulation of a maturing market. Use all the tools available to operate with a tight and efficient operation and do not forget the investments in equipment. ⁇

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