Get Started with CO2 Extractions for Hemp & CBD

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CBD Crude

Ever wondered what hemp-derived extract looks like right out of the SFE Pro? Kind of like this…

Green Mill’s SFE Pro is the perfect machine for extracting oil from hemp using supercritical carbon dioxide. It is affordable enough and small enough to fit into a small extraction lab and powerful enough for a large one. Our system’s unique advances are discussed here.

But before you decide on an extraction machine you need to have things in order regarding your larger goals with the lab. Aside from whether you will grow your own hemp or buy it from a third-party grower, there are other key questions to ask when starting a new hemp/CBD operation:

  • What product do I want to make and what customers do I want to serve?

  • How much capital do I have available to build out my initial space and develop my product(s)?

  • What are the laws and market conditions in the state where I will operate?

  • How do I intend to scale the business?

What product do I want to make and what customers do I want to serve?

If you thought “CBD” was the product, think again. It’s merely the compound you’re targeting as the active ingredient in the final product you or your customer will sell. We have clients who’ve installed an SFE Pro in a souped-up shipping container to process third-party firms’ biomass, and others with large labs and multiple retail dispensaries where they sell their own product that they extract themselves. Here are just some of the products you could make in your extraction lab with the oil that comes out of the SFE Pro:

  • Crude oil (straight from the machine with no refinement)

  • Refined oil

  • Isolate

  • Wax

  • Crystals or Sheets

  • E-liquid

Be sure to thoroughly research them all.

You can then choose to either develop products under your own brand to sell retail, or you can sell the CBD in bulk to other companies who would use it to develop their products. These products could take the form of:

  • Tinctures

  • Creams and gels

  • Capsules

  • Sublingual sprays

  • Transdermal patches

  • Vapors

  • Food and beverages

The other consideration is who is your customer? CBD is commonly used in general “wellness” products, but it is also used to treat very serious illnesses. A health enthusiast who wants to supplement for energy or quality of sleep or mood optimization is one type of customer, but a parent looking for something to help their child suffering from epilepsy is completely different.

How much capital do I have available to build out my initial space and develop my product(s)?

All of the things above will determine what kind of investment is required to get your facility up and running. Be warned: this is expensive. A complete extraction lab can easily require more than $500k to set up. That’s not including a grow facility such as a hemp greenhouse or farm.

Our SFE Pro alone starts at $165k. This is a profitable industry but as the saying goes, you have to spend money to make money. Get your plan in place, find the financing, do your research, and then contact us. We can help you with a lot of the business details, but you have to have the basics on paper to get the full benefit of our expertise.

What are the laws and market conditions in the state where I will operate?

While the 2018 Farm Bill technically legalizes hemp in all 50 states, there is still a lot of ambiguity around how the law will be implemented and individual states are going to have different legalization landscapes. For example, in Idaho, hemp is illegal and they are still arresting people for transporting it even when it conforms to the Farm Bill’s requirements. And then there’s federal USDA regulations, which have not yet been written.

For some states the Farm Bill is the first type of cannabis legalization they’ve experienced, and for others there is either an existing medical or recreational market already in place. Be sure to assess the risks and rewards of both.

Try to determine how crowded the space is for the type of business you want to start. This factor can work against you or for you. A more crowded space means more competition but also more established rules around how to operate.

How do I intend to scale the business?

Cannabis is one of the fastest-growing industries in the world today, forecast to expand at a rate of 25-35% per year. There’s a lot of upside — if you can keep up. Like few in history, any new cannabis business has to be ready to grow from day one. You want to get in quickly but smartly. If super-fast growth is not something you’re interested in then you’d better make up for it in efficiency so you can keep your prices competitive as more players enter the market. Because they will enter.

One final thought

There is an infinite number of ways to approach your business. Creativity will be rewarded in this industry more than any that have come before because the rules are not set. We’re here to help you craft your own vision for a hemp business that is right for you. Reach out if you have any questions whatsoever. We love to talk extractions with anyone!

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