Cannabis Derived Terpenes: A Formulation Guide

Blog, Extraction, Terpenes

This article examines a variety of topics regarding cannabis derived terpenes. From proposed health benefits, to extraction methods, and product formulations, this is a terpene formulation guide for any producer looking to optimize terpenes in their production.

If there is anything cannabis is known for, it’s that familiar aroma. Sometimes it’s fruity, sometimes it’s earthy, sometimes it’s skunky, but hemp and marijuana both have that signature smell because of terpenes. Terpenes or “terps,” as they are often called in the cannabis industry, are natural hydrocarbons commonly found in a variety of plants that create their smell and flavor. In any botanical extraction process, terpene preservation is a critical factor from capture to product. This article will dive into cannabis derived terpenes and terpene formulation guide from top to bottom including identification, possible health benefits, best capture processes and final product formulations.

Cannabis Derived Terpenes From A to Z

There are roughly 20,000 known terpenes in the world with over 100 of them present in various strains of the cannabis plant. Not only are terpenes responsible for smell and flavor, recent studies have also shown many of these terps have some health benefits as well. Let’s examine some of the most prevalent terps found in cannabis in our terpene chart:

Terpenes Found in Cannabis


Terpene Smell Benefits Found in
Myrcene Earthy, musky, fruity Reduces inflammation, chronic pain Mangos
Limonene Citrus Improves mood, stress; antibacterial Citrus fruits
Linalool Spicy, floral Sedative effects Lavender, cinnamon and mint
Caryophyllene Spicy, peppery Research for alcohol withdrawal¹ Cinnamon, cloves, other spices
Alpha-pinene and Beta-Pinene Pine-like Anti inflammatory properties, improves respiratory functions Orange peels, basil, parsley and other plants contain this terpene
Alpha-bisabolol Floral Treats bacterial infections Chamomile
Trans-nerolidol Woody, citrusy, floral Antifungal/Anti-microbial Jasmine, tea tree oil
Eucalyptol Minty Positive effects on Alzheimer’s² Eucalyptus trees
Humulene Earthy, woody Appetite suppression Sage, black pepper
Delta 3 Carene Sweet Helps osteoporosis, arthritis, and fibromyalgia Peppers, cedar, pine
Camphene Musky, earthy Antioxidant, topical treatment Fir tree needles
Borneol Minty, herbal Insect repellent Rosemary, camphor
Geraniol Grassy, fruity Neuroprotectant, antioxidant Tobacco, lemons
Valencene Oranges Insect repellent Valencia oranges
Terpineol Floral Antibiotic and antioxidant Perfumes, cosmetics


How to Capture Your Terps

If you are a CBD oil producer, you can’t overlook the benefits of capturing and utilizing terpenes in your production. But, what’s the best way to capture them? During which phase of extraction can you collect them? Is there a way to make sure they are free of CBD or THC? extrakLAB’s Paul Hamel explains.

“We like to capture our terpenes before the extraction process,” Hamel says. “There are three reasons that we do this: we get better terpenes, increase the solubility of remaining components for the extraction process, and have better process control with pure terpenes.” Let’s break down this process into further detail.

Better Terpenes Captured in Fractional Distillation

Many manufacturers in the hemp processing industry completely lose these valuable components if ethanol extraction is used. Ethanol dissolves cannabinoids, waxes, fats and volatile components all in one single liquid. The only way to get the terpenes out in this case is to do fractional distillation, which is costly and also degrades the terpenes.

Another method uses separate vessels designed to capture their terps during supercritical CO2 extraction, but there are drawbacks to this method. According to Hamel, “Terpenes are among the most volatile components in the cannabis plant. If you try to pull terps during the extraction process, you will need to keep the collection vessels cool and possibly reduce the temperature of extraction. Too much heat will degrade the terps.”

The extraktLAB supercritical CO2 extraction machine can run both methods with complete control over extraction collection temperatures and pressures so that these methods might be easily implemented with the touch of a button.

Another method utilizes what is called a subcritical extraction to collect their terps. This involves a short, 20 minute run with lower temperature and pressure. By doing this, the collected product should yield a cleaner terpene extract. But, there is still a possibility that the extract will contain unwanted products like CBD or THC. So, what is the extrakLAB method?

“We use vacuum distillation with a custom built in terpene collector to capture our terpenes,” Hamel says. “By doing this, we get 100% pure cannabis terpenes in a reliable, consistent process.” Pure cannabis derived terpenes means they are without residuals or cannabinoids like THC and CBD. This is important for a number of reasons – including the need to follow Food and Drug Administration 2018 Farm³ Bill guidelines that final CBD products contain less than 0.3% THC. When those captured terpenes are used in a product, any level of THC could ruin a product intended to be THC free according to those stipulations.

Vacuum Distillation = Better Extraction

Vacuum Distillation is a process that some producers choose to forgo, but the benefits are impossible to ignore. Not only is it an ideal time to capture those valuable terps, it ensures that they are pure, preserved and THC free. The other benefit that vacuum distillation provides is a faster extraction of cannabinoids by decarboxylating the cannabinoids.

“Decarbed cannabinoids are more soluble in CO2,” says Hamel. “This means the solvent has a higher capacity for solubilizing cannabinoids in the input biomass and therefore is faster to extract. When decarbing prior to extraction, we convert 90% to 100% of the cannabinoids to their neutral forms thus enabling fast and efficient extraction.

The bottom line is that an increase in extracted cannabinoids means a more efficient extraction business overall. Following the extraktLAB decarb method allows for a producer to collect the best terpenes and increase their own extraction.

terpenas table

Increased Process Control

There is a distinction in the CBD industry between products that are THC “non-detect”, full spectrum and broad spectrum. Where THC “non-detect” products have been further processed to remove THC, full spectrum contains a large quantity of beneficial terpenes and cannabinoids including <0.3% of THC. The middle ground between these two is broad spectrum which has a number of cannabinoids, terpenes, and CBD, but goes through a final process to remove any residual THC. All of these product variations are important to different consumers, so it is critical for producers to know how to properly formulate each of these products and the use of cannabis derived terpenes is an important part of that process.

By following the extraktLAB extraction process, the terpenes captured during vacuum distillation are preserved from extensive processing and are considered to be the highest quality, pure THC and CBD free terpenes available. This means when they are reintroduced into a final product, producers know with certainty that they would not be adding any residual THC to a product meant to be THC free. It also means that formulation is precise, “giving a processor the ability to intentionally formulate whatever combination of cannabinoids and terpenes they want,” according to Hamel.

terp infused products

Why Cannabis Derived Terpenes Matter in Product Formulation

Your terpenes are captured, your oil has been distilled, and a final product is in sight. Now it’s time to consider how cannabis derived terpenes fit into the formulation process.

“Terpenes are a component of the cannabis spectrum that are very important to formulations,” says extraktLAB formulations expert Joe Hynes. “A terpene profile varies by strain, and is what makes a strain unique. Each strain and grow will affect these cannabinoid profiles.”

The most obvious utilization of terpenes in a product is for smell and flavor. But, there are many other factors to consider during formulation.

Organic Terpenes vs. Synthetic Terpenes

While natural botanical terpenes are used in many popular cannabis products, synthetic terpenes are commonplace in product formulation as well. These are often found in products like vape cartridges, tinctures, and other consumables. While there is little evidence to suggest that synthetic terpenes are less safe than their natural counterparts, many believe that more studies could prove them to be less than desirable in an end product. For that reason, extraktLAB sticks to organic terpenes.

“When we extract our terpenes, we end up with a much a broad spectrum terpene profile,” says Hynes. “Broad spectrum refers to a wide range of terpenes that a natural extract will have. Because we have those organic terpenes from the plant matrix to add to our products later on during formulation, we don’t need processed or synthesized terpenes.”

An example of these organic terpenes used in products are found in Holus CBD products. Holus creates a number of high quality CBD products including full-spectrum tinctures. These tinctures come in a variety of flavors including mint, key lime and strawberry all formulated from naturally derived broad spectrum terpenes. Broad spectrum are difficult to reproduce with synthetic terpenes when added to a product, the appeal of an organic cannabis terpene profile provides potential health benefits and mitigates unknown risks of lesser studied synthetic terps.

The Entourage Effect

Due to the numerous reported health benefits of naturally derived plant terpenes, recent studies have addressed the therapeutic benefits of terpenes. One interesting study recently conducted points to the synergistic effect of cannabinoids and terpenes called The Entourage Effect4.

“The Entourage Effect is a study monitoring the activity of cannabinoid receptors in the brain when isolated cannabinoids were consumed compared to cannabinoids combined with terpenes,” says Hynes. “When terpenes were introduced, the activity of those receptors increased, suggesting that cannabis derived terpenes could potentially enhance the medical benefits of cannabinoids.”

In other words, these studies show that the benefits of certain cannabinoids on their own are less than that of a compound that contains a full range of cannabinoids and terpenes. This ongoing study provides further evidence of the value that terpenes have in a final cannabis concentrate product, and how important it is to collect pure, unadulterated terps.

How Could you Formulate like a Rockstar?

For all the processes that are described above, extraktLAB provides methods and equipment needed to extract, preserve and formulate the best terps on the market. We train people on the best way to measure and preserve those terps and provide consultation for each process.

Interested in learning how to formulate like a pro? Contact us for a quote on our terpene extraction system, consultation and training today: 651-600-0036



1.  “The cannabinoid receptor 2 agonist, β-caryophyllene, reduced ….” 3 Jul. 2014, The cannabinoid receptor 2 agonist, β-caryophyllene, reduced voluntary alcohol intake and attenuated ethanol-induced place preference and sensitivity in mice. Accessed 26 Mar. 2020.

2. “1,8-Cineole (Eucalyptol) Mitigates Inflammation in Amyloid ….” 1,8-Cineole (Eucalyptol) Mitigates Inflammation in Amyloid Beta Toxicated PC12 Cells: Relevance to Alzheimer’s Disease. Accessed 26 Mar. 2020.

3. “Hemp Production and the 2018 Farm Bill – 07/25/2019 | FDA.” 25 Jul. 2019, Hemp Production and the 2018 Farm Bill – 07/25/2019. Accessed 26 Mar. 2020.

4. “The Case for the Entourage Effect and Conventional … – NCBI.” 9 Jan. 2019, The Case for the Entourage Effect and Conventional Breeding of Clinical Cannabis: No “Strain,” No Gain. Accessed 24 Apr. 2020.

Frequently Asked Questions

Can ethanol become contaminated during ethanol extraction?

Yes, ethanol can become contaminated during ethanol extraction. It is important that you address the contamination with testing and reuse protocols. guidance for solvent reviews have been published by the FDA in 2010. Please refer to the many articles in this blog for more information on cross-contamination with extraction.

What is the electrical cost of ethanol extraction vs. Co2 extraction?

Processing a ton of hemp per day into extracts  can be an energy-intensive process depending on how the hemp is extracted. The following table compares the energy expense for ethanol extraction versus the energy expense for CO2 extraction:

Energy cost for Ethanol Extraction for 1 ton per day at 1 gallon ethanol per 1 lb of hemp
18711 litres to cool from 25 to -20
16840 litres to heat and evaporate after ethanol loss
454 kwhr to Cool from 25 to -20
481 kwhr to heat to boiling point
3105 kwhr to evaporate
4040 kwhr total @ 100% Efficiency
75% Efficiency
5387 kwhr Total
$           0.09 per kwhr
$          506.36 per day


Energy cost for CO2 Extraction at 1 ton per day including winterization
636 litres to cool from 25 to -20
636 litres to heat and evaporate after ethanol loss
15 kwhr to Cool from 25 to -20
18 kwhr to heat to boiling point
117 kwhr to evaporate
151 kwhr total @ 100% Efficiency
75% Efficiency
201 kwhr Total
$           0.09 per kwhr
$        18.92 per day for winterization
43.20 Kwhr per day for Co2 extractors
$         3.88 Per day for Co2 extractors

Would you recommend ethanol extracted oils for Vape products?

Due to the risk of chemical contaminants that are found in 25 to 30% of  ethanol extracted oils, we recommend that CO2 oils be used for Vapor Products.

Is it possible to make a solventless extract with CO2?

It is absolutely possible to make a solventless extract with CO2. Solventless extracts are typically made with subcritical CO2 extraction methods.

Does ethanol extraction have a greater throughput than CO2 extraction?

Hemp processing equipment can be scaled for 1 to 5 tons of extracted hemp per day. It’s generally not a fair comparison to compare the throughput on an instrument from two different companies. What is fair is to specify the throughput At the tonnage process per day and then look at the operating cost for that process. You can also look at the equipment and Facilities cost to accommodate that level of Production. after you have all of your costs accounted for including the hidden costs, then you can calculate the net present value for each investment.

What are the most common denaturants in ethanol?

Denatured ethanol is a mixture of denaturants and pure ethanol. Chemical companies add the denaturant to Pure ethanol so that they will not be consumed as a food.
Denatured recipes are published by the ttb that is administered by the National Bureau of Alcohol Tobacco and Firearms. There are many different recipes. one of the most common denaturants used in ethanol extraction is heptane. However there are other substances that may be used including acetone, isopropyl alcohol, methanol and other longer chain alcohols.
Is very limited data on the safety of heptane over the long term exposure. In fact the limit that the FDA has placed on the amount of heptane in a tincture for example was established in the 1990s on the basis of a single study published in 1981. That study the effect of heptane on Sprague dawley rats. That is why there are many disclaimers and the general guidance from the FDA is to limit the amount of solvent in any drug that is consumed.

Doesn’t ethanol extraction equipment remove all the ethanol from the biomass after extraction?

No. Approximately 5 to 10% of the ethanol is left in the biomass and is counted as a solvent loss. These solvent losses add up to operating costs. This is especially true if organic ethanol is used or food grade ethanol is utilized as the extraction solvent.

If you had an ethanol extraction facility, would you ever use CO2 just for stripping terpenes?

Ethanol extraction typically destroys the terpenes when the ethanol is removed from the extract or is distilled from the winterized oil. Many ethanol extractors are seeking a way to preserve the terpene profile of the plant in the output oil. To this end people have tried techniques such as Steam distillation, CO2 stripping, and vacuum distillation.
Certainly, CO2 can be used to strip terpenes from Hemp biomass Prior to ethanol extraction. However, vacuum distillation is by far the most gentle and effective way to harvest the terpene profile prior to ethanol extraction.

How do I model and compare the financial return of ethanol extraction vs Co2 extraction?

There are many inputs that need to be defined when creating a financial model comparing two different extraction methods. The first decision to be made is to decide what the financial metric will be used to make a decision on the superiority of one method over the other. 

In this case, we recommend the use of the Net Present Value as the way to model the return of each extraction technique because it accounts for the cash flow associated with the operation. Many ethanol extraction companies try to make the argument that ethanol extraction is lower cost because the equipment cost is less. However, the equipment cost will have very little impact on the overall profitability of the operation at the same throughput.

The best way to compare the two techniques is to fix the throughput so that an apples-to-apples comparison can be made. Comparisons such are payback time and return on investment can mislead someone into making a bad investment decision. 

So if we fix the throughput at one ton per day the cost of the hemp is equal between the techniques and operating cost variance is the only contributing factor.     

Here are the twelve key questions that need to be defined in order to do a comparison:

  1. What is the direct labor to process?
  2. What is the energy to process?
  3. What are the solvent losses? 
  4. What are the direct material startup costs including solvent startup costs?
  5. What are the cannabinoid recovery rates?
  6. How much solvent do I use, reuse, and when do I need to replace the solvent with fresh solvent?  and at what interval?
  7. What is the insurance cost for each option?
  8. What is the cost of hazardous waste disposal?
  9. What is the cost of solvent removal?
  10.  What is the cost of reuse of the solvent?
  11.  WHat is the cost of HAP emissions?
  12. What is the depreciation for each option including building costs for H2 vs F2 occupancy?

Once these questions are answered you will be able to build a pro forma income statement. 


  • Standard labor
  • Standard materials
  • Overhead

Gross margin

  • SGA
  • R&D

Net Margin

You can then hold SG&A and R&D constant for both techniques and account for the difference in depreciation to get to a net margin number.  

A cash flow statement can then be generated from net margin. One thing to note is that depreciation must be added back to net margin as it is a non-cash expense on the income statement.  

Cash flows are then added up for 5 consecutive periods (years) including the initial outlay of cash for startup working capital.  Those cash flows are then discounted at a discount rate (Weighted average cost of capital estimate at 13-17%).  

If you do this analysis, you will find that CO2 extraction will absolutely crush ethanol extraction in terms of net present value.  

Does it cost less to process hemp with Co2 compared with Ethanol?

In fact the operating cost for CO2 extraction is dramatically less than the operating costs associated with ethanol.

Extraction with Ethanol is a process that is typically run at low temperatures. First the ethanol is cooled to below -20oC before it is introduced to the hemp. Cooling the ethanol reduces the amount of extracted chlorophyll and waxes. If you account for the energy required to chill the ethanol down to those low temperatures and then also evaporate after use, the energy bill for extracting ethanol is approximately 3-6x the cost of extracting with CO2. However, the energy cost is really not the key driver in the overall operating costs.
Ethanol extraction requires a significant amount of ethanol to be used per pound of hemp. In fact, about 1 to 1.5 gallons of ethanol must be used per pound of dry hemp in order to extract. Hemp is a very absorbent biomass material and the ethanol must fully saturate the hemp plant before any extraction can take place. For this reason a large volume of ethanol is needed to extract cbd from hemp.
The key cost driver or ethanol extraction is recovery of that solvent from the biomass. Even though many ethanol extraction equipment companies provide centrifuges and or presses to eliminate the amount of ethanol left over in the biomass, The best equipment will provide only a 90 to 95% recovery of the ethanol. This 5 to 10% loss in ethanol is a huge cost driver for extracting ethanol.
For example, suppose you wanted to process 1000 lb of hemp. You would need 1000 gallons of ethanol to start out at a cost of $16-33 per gallon for food grade ethanol for a total cost of $16,000 to $33,000. If you recovered 90% of the ethanol the ethanol loss would be $1,600 – $3,300 per 1000 lbs. Furthermore if you process 1000 pounds per day, this would be your daily loss.
In contrast, you will lose the equivalent of about $70 per day for CO2 extractions for the exact same process.
Besides energy and solvent usage, there are many other hidden costs related to extraction with ethanol including solvent reuse costs, insurance cost, increased facilities cost, and testing costs.

Is CO2 cheaper than ethanol?

A pound of food grade ethanol when purchased in bulk is $4.71/lb at current price.
A pound of food grade CO2 when purchased in bulk is about $0.04/lb at current price.

What’s the purity of the CO2 used in CO2 extraction?

There are many grades of CO2 including industrial and food grade and medical grade. We typically use food grade but medical grade is also highly desirable. the specifications for each of these grades are published by the Compressed Gas Association or by your gas supplier.

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Meet Our CEO and Founder Dr. Jon Thompson, Ph.D

Dr. Jon Thompson

Dr. Thompson is a separations scientist, entrepreneur, and inventor. As a scientist, he has a strong technical background and industry experience in analytical instrumentation, in-vitro diagnostics, biotech, mining, and homeland security markets.

During his cannabis industry career, Dr. Thompson has earned a strong track record of winning and implementing medical cannabis licenses in well-regulated, medically-modeled states.

Dr. Thompson has assisted numerous companies to attain their goals in cannabis and hemp manufacturing, as well as market development, strategic marketing, and worldwide business-to-business alliance formation (including international markets).

Dr. Thompson has a track record of writing winning cannabis licenses and has implemented hundreds of start-up operations in Canada, Europe and throughout the US for various clients. Dr. Thompson received a Bachelor of Science degree in Biochemistry, Chemistry and a Doctor of Chemistry degree from the University of Minnesota.