Best Practices for Manufacturing Cannabis Concentrates

At its legal retail inception, the cannabis industry expected it would prosper with traditional flower sales, but concentrates have proven to be the industry’s dark horse and have dramatically changed the landscape for cultivators, manufacturers and retailers.

Concentrates can be consumed in their extracted form or they can be used in new intermediate product forms to infuse products such as edibles, balms and tinctures. Depending upon factors involved in the extraction method, concentrates can result in different final forms, such as hash oil, wax, shatter and crumble, among others.

Dabbing, a method of consuming concentrates, has received more play in the media than it has in the concentrates market; however, infused edibles have taken concentrates to new heights. For example, according to the Colorado Marijuana Enforcement Division’s Annual Report for 2014, “Retail marijuana product edibles accounted for approximately 59 percent of total units of edibles sold in 2014,” representing 2.85 million units. Concentrates, formally known as non-edible products, accounted for approximately 47 percent of total units of non-edibles sold in 2014, representing 359,000 units.

With this level of demand, the concentrates market is under intense scrutiny, and it is up to manufacturers to embrace and promote best practices as a means of demonstrating the industry’s legitimacy.

The standard operating procedures needed to manufacture cannabis concentrates could take up hundreds of pages, but for the sake of brevity, this discussion is limited to four best practices. And while these four practices are vital for manufacturers to understand, they are important for consumers, investors and entrepreneurs to understand as well.

 

Lab Testing

On its surface, lab testing seems simple enough; however, testing cannabis should be a multi-faceted process. According to Jeff Binder, CEO of CLS Holdings (OTCQB: CLSH), “The first best practice in extraction is to analyze the raw material you’re starting with by lab testing what is in it, because you have to know what you’re starting with.”

If you’ve scientifically identified the raw materials through in-house lab testing, you then need to address the issue of purity. “Our process starts by eliminating heavy metals, pesticides or other impurities, which we do not want to be a part of the finished product,” Binder said.

Eliminating impurities is a vital part of the process, but it doesn’t end there. As a manufacturer of cannabis concentrates, the ultimate best practice within testing is to have a third-party lab verify your in-house results.

At CLS Holdings, “It’s our intention in Colorado and the other states where we’ll be doing our extraction and conversion, to work with the outside testing labs so they can substantiate what we’re doing internally,” Binder said.

 

Method Matters

As the legal cannabis industry has evolved, multiple extraction methods have been developed to manufacture cannabis concentrates. Each method requires a particular solvent. The three main commercial solvents are compressed liquid hydrocarbons such as butane, carbon dioxide supercritical fluid and uncompressed liquid solvents like ethanol.

Using butane as a solvent can be dangerous because butane vapors are highly flammable. In 2014, Colorado documented 34 butane hash oil explosions. Beyond the explosive nature of butane, a recent report by chemist Rodger Voelker and biologist Mowgli Holmes has shown that concentrates created with butane as a solvent also concentrate pesticides into the finished product. Then, there is also the potential issue of an extractor not successfully purging enough of the residual butane from the cannabis concentrate, causing negative health effects such as nausea and respiratory complications.

In CO2 supercritical fluid extraction, carbon dioxide acts as the solvent. The advantage of CO2 supercritical fluid extraction is that the method doesn’t leave behind any residual CO2, but some supercritical machines use high heat to separate the cannabinoids, which can deplete terpenes, elements inherent to cannabis and its compounds.

Uncompressed liquid solvents like ethanol are popular with commercial manufacturers of cannabis concentrates because of safety, terpene preservation, the availability of a food-grade solvent and low toxicity.

At CLS Holdings, “Our extraction method is closest to ethanol, although we don’t use ethanol. There’s nothing wrong with ethanol other than the fact that it’s combustible. We’ve just found better materials and solutions to use other than ethanol, which makes our process cleaner and allows us to capture more of the cannabinoids,” Binder explained.

 

Test Again

While testing the raw material is the first crucial step in the extraction process, testing the finished product is just as vital because manufacturers need to make sure that there aren’t any residual solvents or contaminants in it. A follow-up test ensures that manufacturers can give distributors and consumers a detailed list of ingredients. This also enables manufacturers to verify that a finished product conforms to its previously established parameters.

As CLS Holdings knows, “You must have consistency. When you’re delivering a product, whether it’s your own product or you’re white labeling for someone else, the consumer needs to know that, with regard to the cannabinoids contains in that product, they are consistent.”

 

Labeling

While many of the best practices regarding cannabis concentrates involve highly scientific information, labeling combines science and common sense. Each state has its own regulation, or lack thereof, for labeling cannabis products. California and Michigan don’t have labeling requirements, but other states like Massachusetts and Nevada require the label to include the cannabinoid profile.

Because cannabis has been legalized by states on an individual basis, it is up to the industry to establish uniform national standards of testing to employ in those states that have mandated testing. “Once you have good testing in place, know what’s going into your product and what your final product contains by way of the cannabinoids, then best practices are needed to establish national standards of labeling,” suggested Jeff Binder at CLS Holdings.

If the federal government legalizes cannabis, the smartest move for existing companies would be to already meet or exceed FDA standards for labeling, enabling those companies to easily transition during the implementation of federal regulations.

Ultimately, consumers deserve to know what they’re getting, and the manufacturer that establishes the best products paired with the best practices has a better chance of capturing a greater share of the competitive concentrates market.

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