Your Guide to Ethanol Extraction: Biology Brief

This article originally appeared in the July 2018 issue of Cannabis Business Times. To subscribe, click here.

For years, flower was king. As long as there was an established pipeline for flower distribution, it was almost impossible for investors to lose money in the early stages of this industry’s growth. While this might remain true in some markets, flower profits are becoming leaner. There has been a significant decrease in flower price in the most mature markets due to the expansion of outdoor growing techniques that produce high-quality flower in large quantities, as well as market saturation driving prices down.

Let’s create a fiscal example as a starting point. First, let’s assume, for this example, that the price of high-quality outdoor flower is wholesaling at $700 per pound. The second assumption is that two potential outcomes of yield exist from the extraction and refinement process (i.e., 10 percent and 15 percent of dried flower weight). The final assumption is the potential wholesale prices for high-quality refined oils, which we will estimate at two potential levels of $20 and $25 per gram.

At 15-percent extraction yield, an extracted pound would wholesale for $1,360.80 (at $20/g) and $1,701 (at $25/g). At 10-percent extraction yield, the wholesale price for a pound would be $907.20 (at $20/g) and $1,134 (at $25/g).

This example framework is somewhat simplified, but it characterizes the potential for a basic, value-added approach to dealing with the cannabis flower market’s rapidly expanding supply side. (A gram of marijuana flower can retail between $1 to $15, according to data from Leafbuyer.) More revenue can be gained through scale and the manufacturing of extracted products than through flower sales.

In the first two parts of this special three-part extraction series in Cannabis Business Times, we explored supercritical CO2 extraction (March 2018) and hydrocarbon extraction (May 2018); in this column, we will delve into ethanol’s properties, the different types of extraction strategies, safety considerations for ethanol systems and laboratory infrastructure considerations.

Ethanol and Its Guidelines

The Food and Drug Administration (FDA) classifies ethanol as a Class 3 solvent with low risk for acute or chronic toxicity in pharmaceutical manufacturing processes where the residual is less than 5,000 ppm or 0.5 percent. The FDA also implies that residual solvents in this category should be limited to 0.5 percent through rigorous quality assurance and quality control programs.

Despite those FDA guidelines, some states have adopted more conservative safety limits suggested by the Occupational Safety and Health Administration (OSHA) and the National Institute for Occupational Safety and Health (NIOSH). OSHA and NIOSH set the worker environmental exposure limit for ethanol at 1,000 ppm of Total Weighted Average (TWA) over an eight-hour work shift, which means that some states are allowing only 0.1 percent residual ethanol in extracted products.

To read the full article in Cannabis Business Times' July 2018 issue, click here.

Top photo: rachan ; rgbspace | Adobe Stock