Considering the projected growth of the cannabis industry in the United States to a $43 billion dollar industry by 2025, with 141 million Americans (43%) having access to legalized cannabis and counting, it’s evident that we are witnessing the metamorphosis of an underground, old trade into a full-fledged, widespread, legitimate industry. And when you consider the global reach of cannabis, with sales projections topping $62 billion by 2026, it’s clear that the cannabis resurrection has swept across our Earth.
The fact that so many people are relying on the ancient cannabis plant for its therapeutic capabilities translates to the need for more plants to be cultivated, and for sustainable, scalable extraction methods that don’t further pollute our environment. Pressurized carbon dioxide (CO2) extraction offers one method that can be labeled as both green and scalable.
We spoke with Todd Palcic, president and chief revenue office of Thar Process, a company that designs, builds, and uses carbon dioxide (CO2)-based extraction and purification systems, to learn his thoughts concerning the costs and the future of cannabis extraction.
What are some of the most important factors to consider when establishing the true cost of an extraction system?
Total Cost of Ownership or TCO is common method for public companies but it’s not easy to calculate. First, you start with your capital cost of the equipment, then the cost of all ancillary capital costs, then the operating costs. Thar’s systems use upcycled CO2 which costs about 15 cents/kg (think roughly one liter of solvent) and 99% can be recycled for the next run. Furthermore, CO2 is a fire retardant – so you do not need to build out an explosion proof room, while you do have lower insurance costs and easier permitting.
Often, people say CO2 extraction is too expensive or that you need a PhD to run the systems. What misconceptions exist surrounding the costs associated with CO2 extraction, and what is the reality of the situation?
Thar Process operates a cGMP, USDA Organic Certified extraction facility here in the same building where we engineer and manufacture these systems. Therefore, we are not only vendors, but designers and operators of these systems – everyday! I can promise you that nobody running our CO2 extraction machines in the cGMP area has a BA or BS, let alone a PhD. The operators simply need to follow SOPs set up by our experts. Our most successful customers tend to work in more remote locations like in Turkey and India where they follow SOPs closely. Thar troubleshoots and supports systems remotely on four continents if a client has turnover or needs help.
Fast forward into the future of the cannabis industry where either interstate commerce is permitted, or the feds have woken from their slumber, and fully legalized cannabis. How does this change one’s approach to scalable cannabis extraction? How does this change the picture regarding costs associated with extraction?
This prescient question is rarely asked but we have planned for it here for years. As the industry grows beyond state borders and achieves economies of scale, longer term, higher capex, more automated equipment will be more even more obvious. The reason for the change is that without SAFE banking and open borders, companies remain hesitant to invest in a 10-year plan and sophisticated manufacturing because they have no deductions and no idea when they can add significant capacity. CO2 extraction requires two people to operate a 1/2 ton per day system or a 3 ton per day system, and the additional solvent (CO2) cost is minimal.
How does Thar’s patented WinterFlow™ change the costs associated with winterizing crude cannabis/hemp extracts?
WinterFlow™ technology allows us to use CO2 to de-wax crude extract. This allowed us to winterize about 1,000 kg of hemp extract without any ethanol. For our customer, that’s all we needed. However, for vape quality winterization, you will need to use some ethanol – maybe a 3:1 blend. Still, imagine the savings from an 70% reduction in costs related to buying, storing, rotovapping, etc.
Terps! That’s it in a nutshell. Thar has specifically targeted the unique tastes and preferences of cannabis users by offering a system that offer both liquid CO2 extraction followed by the capture of monoterpenes, while collecting THCa [tetrahydrocannabinolic acid] and other cannabinoids and sesquiterpenes downstream. This happens all in one click of a button. It will take a while to win over users because tastes and preferences are a mix of a person using their senses to choose a certain quality of product and the psychology behind the label information. However, CO2 can be tuned to extract the flavors you need and Thar has mastered the collection part.