The Future of Cannabis: Extracts and Infusions

In late October, I had honor of attending The Infused Product and Extraction Symposium organized by The National Cannabis Industry Association (NCIA). The venue was elegant and the room was filled with suits that were surly containing very high-powered and business savvy professionals which now overwhelm the numbers of tie-dyed brothers and sisters of this industry’s rebellious past. To say that the air was saturated with the inspiring excitement of this innovative and prolific new industry would be an understatement indeed. From Dixie Elixirs to Eden Labs, this first-of-its-kind conference gathered the best and brightest in the world of cannabis oil extraction and product infusion to discuss the future of these practices and the rapidly expanding regulations surrounding their continuance. Here we’ll talk about why this side of the industry is here to stay, and walk up-and-coming entrepreneurs through the fundamentals of starting a successful business in this sector.

Written By Celia Daly
November 3rd, 2014

In late October, I had honor of attending The Infused Product and Extraction Symposium organized by The National Cannabis Industry Association (NCIA). The venue was elegant and the room was filled with suits that were surly containing very high-powered and business savvy professionals which now overwhelm the numbers of tie-dyed brothers and sisters of this industry’s rebellious past. To say that the air was saturated with the inspiring excitement of this innovative and prolific new industry would be an understatement indeed. From Dixie Elixirs to Eden Labs, this first-of-its-kind conference gathered the best and brightest in the world of cannabis oil extraction and product infusion to discuss the future of these practices and the rapidly expanding regulations surrounding their continuance. Here we’ll talk about why this side of the industry is here to stay, and walk up-and-coming entrepreneurs through the fundamentals of starting a successful business in this sector.

As an extract artist myself, it was personally nerve-wrecking to walk into a seminar full of the biggest names in the game of high-volume extraction and infusion. Personally, I understand how difficult it is to efficiently process cannabis and provide a clean and healthy end product for my own personal medicine. However, as the popularity of these products rises in the public eye, the onus on these companies is to provide hash oil products to what is turning into the majority of sales throughout both the recreational and medical sides of this industry.

Given this monumental barrier, the only viable way to success for these products is for industry leaders to work together and develop metrics for success. Tripp Keber, of Dixie Brands Inc., used the phrase “co-opetition” to describe the efforts needed in continuing to develop and implement these practices as the market capacity widens.

In an informal discussion with Dr. Robert Martin, co-founder of California based CW Analytics, we lamented over the slow progression of California’s push for legality. He expressed frustration over the many heroic efforts that have been made by himself and others to bring new laws to their state, only to have them categorically run down through petty or insignificant reasoning.

Shortly after our conversation, Dr. Martin got on stage to deliver his speech and take part in a discussion panel titled Infused Product Manufacturing Best Practices. In my opinion, Dr. Martin’s presentation and associated discussions provided the most valuable advice for future professionals and business owners deciding to leap into this field. His advice was simple, and four-fold:

  1.      Know The Rules
  2.      Know Your Product
  3.      Know Your Procedures
  4.      Obtain Certifications

Know The Rules

Regulations are increasing in this industry at a very rapid pace. From children’s health scares and propaganda, to contaminant and potency statistics, the makers of these products are having to deal with new rule changes on a frequent basis which in and of itself creates a very unstable environment for anyone who wants to try their hand at infused products manufacturing. This is why it’s important not only to consider the rules in your state, but also the rules that are being developed across the country as some of them are likely to be adapted to everyone eventually. These changes can not only affect your bottom line, but can put you out of business entirely by making your chosen manufacturing equipment or facility unsuitable for consumer production through legislation.  Mitigations to issues like these may often require large scale equipment and facility investments to simply continue as a business.

Smart entrepreneurs will start working with a legal service early in their business planning process and will be sure to do their research on federal regulations in associated markets (i.e. food handling, food preparation, acceptable contaminant levels, etc). Federal legalization is coming, so be ready to absorb any impact that could be the result so that you’re available to provide your products to the masses without interruption.

Know Your Product

Know your product. This phrase is often overlooked when dollar signs are in the eyes of the beholder. Knowing every detail about the product that you make and the market that you’ll be entering into will make process development and manufacturing efficiency options much more visible. There are many ways to go about hash oil extraction, and each provides an end product with qualities that are marketable to different subsets of consumers. The efficiencies, upfront costs, operational costs, and market viability of each extraction type differ depending on the end product needs.

Know Your Procedures

With all of the above being said, you now find yourself in a very complicated and prodigious state. Organization and documentation will be the key that opens all of the doors. Creating standard operating procedures (SOP) will give you a solid base of operations. Development of this kind will bring you to a higher level than most in this industry and will be both painful and extremely valuable as they’ll cover actionable aspect of your business.

To put it bluntly, write down everything that you do, period. If there is an action as simple as carrying the product from one end of the facility to the other, you should have a document stating the intention behind that action, acceptable methods for completion, unacceptable practices and mitigation procedures for protocol breaches.

Through all of this, extract and infused product manufacturers should be working closely with their test lab to develop consistency in practice at all levels (potency variability, microbial and other contaminant concentrations, etc). This will help you navigate the legal structures at play while making your internal process more efficient and your end product more consistent.

Obtain Certification

Transparency is the next big step in develop a path of longevity in this business. Obtain all of the certifications available to any of your business lines, products, processes, and equipment. If you’re an equipment manufacturer making CO2 extractors, be sure to obtain all of the applicable safety certifications (UL, ETL, etc) as they will be required for commercial producers to purchase your products.

Along with this, developing a quality manufacturing process and aiming to become certified to ISO 9001, Quality Management Systems (http://www.iso9001.com/), for your manufacturing process and quality system is an idea that should not be overlooked. For test labs that purchase this equipment, both the equipment they use and the procedures that they follow should be under tight scrutiny in order to fulfill the requirements of ISO 17025, General Requirements for the Competence of Testing and Calibration Laboratories (http://www.isoiec17025.com/), and achieve all of the available certifications within your local jurisdiction.

Gaining certification and remaining transparent to the public with regards to the quality and consistency of your product is paramount to the longevity of new businesses in this market. Pharmaceutical companies and existing industrial equipment and food manufacturers all have these certifications, and once federal legalization comes to fruition, being appropriately transparent will be one of the only walls that you can put up to stop big business from steam-rolling through everything that you’ve spent years creating.

After walking through the doors of the Hyatt Regency Tech Center, towards my car in the freezing cement clad parking garage, my head was buzzing with all of the excitement from the day. As an engineer in several industries now and a passionate cannabis activist within the industry, I knew of the relevant regulations surrounding this industry going into the event. However, I was very impressed by the co-operation and information sharing that is still ever present in cannabis culture, even at the industrial scale.

By following the rules, developing quality processes, and obtaining certifications, we can assure that the industry we’re creating around the plant that we love remains viable on the legislative level while providing a healthy, unimpeachable product to the communities that support us – the communities that have been fighting for this cause for almost 100 years. Let us not be the reason for the collapse of this great achievement.

Peace & Love,
Brady

Brady Schultz holds a bachelors degree in Electrical Engineering. He is responsible for providing research and development engineering support, regulatory compliance and manufacturing quality systems oversight while providing technical support for Surna and Hydro Innovations products and services.  Brady brings several years of regulatory engineering and R&D engineering experience to the Surna team, and has worked on development projects for both NASA and the Department of Defense throughout his career with a primary focus on optical system design.  Outside the office, Brady is a passionate cannabis gardener and a medicinal extraction artist who seeks to keep the loving, community driven spirit of traditional cannabis culture alive as we transition into this new world.

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