Medical Research

C1D1 and C1D2 Costs…

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We all know this industry moves faster than the creation of standards (building, fire protection, etc.) that regulates it. Depending on the local jurisdiction, different codes may apply. Let’s take for example NFPA which is accepted in most jurisdictions around the nation. Not so long ago, NFPA announced that they are working on creating a code for the cannabis industry, called NFPA 420, but right now the only chapter that mentions cannabis extraction is NFPA 1 – Chapter 38 – Cannabis Growing, Processing and Extraction Facilities. This chapter requires that all the equipment to be used for cannabis extraction and/or processing shall be NRTL listed. Listing equipment to OSHA’s standards through the NRTL program is a costly and long process and can only be done by OSHA’s NRTL Organizations. Some recognized equipment manufacturers in the industry, like Welch Vacuum, and Cascade Sciences, do provide an NRTL certification with the purchase of the equipment. So basically the cost for this certification is included when the facility’s owner purchases the equipment.

On the other hand, codes do allow the use of non-listed equipment for extraction but there are some requirements in order for the Fire Marshal to approve it. In order to avoid this long costly listing process, extraction equipment manufacturers have the option to provide a Design or Peer Review report (aka technical report of the equipment) prepared by a registered professional (aka designer of record for the equipment) in the state where the equipment will be installed. This Design/Peer Review Report is usually included with the equipment purchase as well. But if you know extraction and you want to build your own system, you can do so as long as you find an engineer or engineering firm that will provide the Design/Peer Review Report. Depending on the engineer/engineering firm you selected, this cost for a Design/Peer Review of a hydrocarbon extractor can range around $8,000-$10,000 per extractor. Some engineering firms may charge less or more depending on the complexity of the system. To mention a few, 3PCertz, John P. Stoppi, Jr., PE, FPE and PSI are among the few recognized engineers/engineering firms that do provide these services for the cannabis industry.

NFPA 1 states that: “prior to operation of the extraction equipment, the designer of record for the equipment shall inspect the site of the extraction process once equipment has been installed for compliance with the technical report and the building analysis.” To be clear, depending on the jurisdiction and the code accepted in the state, the designer of record for the equipment will have to perform the field verification/site inspection while other jurisdictions may allow other registered professionals to perform the inspection when approved by the Fire Marshal. This obviously comes at an additional charge for the facility owner, although some equipment manufacturers provide a voucher that includes the first field verification inspection. Lately, due to COVID, jurisdictions are accepting a virtual field inspection. This virtual field inspection has a cost ranging from $2000 through $4000 per equipment. If an on-site physical inspection is required by the Fire Marshal, then the cost of the inspection will increase to cover all travel expenses for the field inspector. Once the inspection is completed, the engineer or engineering firm will provide a report of findings and observations to the Fire Marshal for review and approval.

If your extractor is located within a prefabricated extraction booth, then the booth is considered to also be equipment and it will have to be inspected as well. When it comes to booth’s, a balancing report may be required by the field inspector to confirm the air movement within the booth is functioning properly. The cost of the balancing report can range drastically from state to state as it will have to be performed by a certified HVAC balancing company. Also, booth’s and extraction rooms are required to be equipped with a gas sensor. Depending on the brand of the sensor, a recurring (mostly yearly) recalibration needs to be performed by a certified party. This recalibration has a cost of approximately $1500 (full day of a certified technician) but that obviously depends on the location of the facility as traveling expenses may be added.

Some jurisdictions may require that the equipment inspections are performed on a yearly basis. Similar to a building elevator, it has to go through a recurrent inspection to ensure it’s working properly. When it comes to extraction equipment, Fire Marshals may require that the equipment is inspected to confirm that the equipment hasn’t been altered and that it is working properly as stated on the Technical Report. Therefore, for a facility owner, a yearly cost per equipment will have to be added to the operation to cover these recurring inspections. Again, depending on the jurisdiction, a virtual inspection may be accepted ($2000-$4000 per equipment) but if an on-site physical inspection is required, then travel expenses may increase the cost.

When it comes to the commissioning of the operation, Fire Marshals may require a building analysis/fire protection report prepared by a registered professional in the state (aka a PE-Professional Engineer) to be submitted for “plan check review”. In this report, the engineer will perform an analysis of the operation including analysis of all the hazardous materials to be used in the processes, compare those quantities to be used with the Maximum Allowable Quantities (MAQs) per Control Area, decide which areas within the building are considered control areas, decide which wall are considered fire barriers/fire walls, decide the fire rating required, and provide equipment certifications and technical reports among other analysis efforts. This report will have to be submitted to the Fire Marshal for review and approval. Depending on the complexity of the facility and the processes to be performed, the cost of this report will fluctuate but since most operations are fairly similar, some engineers will charge $3000 for it. As you will have to provide a floor plan layout, equipment list, equipment certifications, etc as well, if you don’t have all that information in hand, that will need to be generated and will also add to the costs.

Definitely a complex and intertwined arena with multiple code requirements and external reviews being required. There are also individualized local flavors added by each inspecting body that may impact the overall costs as well. Both one-time fees and on-going recertifications and operating fees need to be considered for the equipment and facility.

 

Credit: Director of Process Engineering & Construction, Jose Pagan Marty, PE. from the Werc Shop

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