Should you develop your own cannabis extraction laboratory?
If your products have been refined, biomass has been sourced, and you have a sizable established client base, establishing your own extraction facility may be the best course of action. If you process more than 1 million pounds of biomass per year and have the necessary facility space and financing in place, establishing your own lab can put you in a very competitive position in this expanding market.
It is critical to understand that establishing an extraction laboratory is a significant undertaking. You’ll need to hire engineers to create the appropriate procedure and get the necessary equipment. You’ll need to adhere to regulatory regulations and hire knowledgeable personnel. The entire process can take 12-24 months (or longer) and cost between $3 million and $7.5 million, depending on the size of the lab and the type of distillate being produced.
Additionally, constructing the lab is only the beginning. Due to the continuous evolution of the extraction sector, new technology is continually appearing that improves production efficiencies and distillate quality. If you’re ready to take on the mammoth task of creating your own lab, you must also commit to the annual compliance certifications, maintenance, and upgrades required to ensure your lab remains current with industry innovations.
When is toll collection a viable option?
When processing fewer than 50,000 lbs. of cannabis biomass per year, a toll processor may be the best solution. A toll-processor is a business that has constructed a large-scale extraction lab and rents it out to other businesses. You would load your cannabis biomass into a truck, transport it to the toll processor, and then receive your distillate from them.
It is critical that you verify that this contractor operates an entirely compliant facility that adheres to GPP, cGMP, or EU GMP regulations. Before working with them, you should verify their references, certificates, and quality assurance guarantees, as you may be held liable for the quality and substance of the processed distillate. You can determine whether a toll-processor is a good fit for you based on their capture rate and processing costs, or whether you need to seek out another partner.
This is an excellent alternative for small cultivators and processors since it avoids the high costs associated with setting up your own lab and enables you to get to market faster and test the market feasibility of your products. It’s critical to keep in mind that obstacles can arise as a result of production delays, transportation concerns, or quality control issues.
Evaluating your options
When evaluating these three extraction alternatives for your organization, it’s critical to keep your company’s current and long-term goals in mind. Do you intend to expand your manufacturing capacity in the coming years? How rapidly are you attempting to bring your product to market? Are you self-sufficient in terms of resources and technical expertise?
These are just a few of the considerations to make when determining which extraction solution is best for you. Fortunately, the burgeoning industry is always developing new products and services to satisfy your needs.