Seven Key Questions for Scaling Up Your Hemp Extraction Business

CO2 Oil Production, Facility Design

Interested in scaling up your hemp extraction business? In this article, we cover seven important questions you should ask yourself before taking the next steps in the process.

 

Key Scalability Factors

Looking at ways of “how to scale up” your extraction business? Here’s a list of seven questions you need to ask yourself when doing scaling calculations for your current operation:

  1. What’s your total square footage of the extractor + infrastructure (chillers and compressors)?
  2. What’s the total number of amps of your current voltage for both extractor and infrastructure?
  3. What are the total number of pounds, or kg, you are looking to process per hour (input)?
  4. How many kilograms of crude oil are you looking to produce every hour (output)? This is called, “throughput.”
  5. Are there any restrictions on the amount of flammable solvents you can have at your location?
  6. How many people are required to run your current process?
  7. How much CO2 do you use per hour?

It’s a good idea to use averages, or ranges, for your input numbers (#3 & #4 above) and then adjust the numbers up, or down, depending on the input potency (THC%) of your trim or flower.

For example, for an extraktLAB 140, you will need to put 8kg (17.6lbs) of trim in per hour and the extractor will output oil on a w/w basis based on the quality of the trim you used. Check out Co2 extraction machine wholesale for scaling up.

If you put in 8kg (17.6lbs) of trim at 10% THC, for example, you will get around 10% cannabinoids out, plus some wax at around 2% in about an hour totalling 800-900 g/hr.  If you put 20% THC trim in, we would expect 20-25% w/w recovery per hour.

Performance Numbers for a Single 140 Machine

Here are the answers to the seven questions (listed above) for extrakLAB’s supercritical CO2 extraction equipment:

  1. 25 ft sq for extractor + 25 ft sq for chiller + 1 ft sq for the compressor = 51 ft sq.
  2. 63 amps for extractor + 15 amps (per extractor) for the chiller + 4 amps for the compressor.
  3. 17.6lbs/hr or 8 kg/hr.
  4. Trim @ 20% THC = 1,500-2,000 g/hr. Trim @ 10% THC = 800-900 g/hr.
  5. CO2 has no restrictions on amount as it poses no fire hazard.  May need permit from city but this is (typically) a trivial process.
  6. Staff = three people per 8-hour shift. One person can run up to 6 machines, need one person for pre-processing for 6 machines, and need one person for cleaning/maintenance.

Scale up to 2,000 lbs per day.

personnel using supercritical co2 extractor

extraktLAB E-140 Extractor

Now for the scale up: want to do 2,000 lbs in a 24-hour period? Based on the numbers above, you will need the following equipment:

  1. 1,200 ft sq for extractors, compressor and chiller.
  2. About 500 amps at three phase and 4 amps single phase.
  3. You will need six of extraktLAB’s 140 extractors.
  4. Your throughput will be around 34kg per day of crude oil assuming 20-hours operating.
  5. No issues.
  6. You will need a staff of three people for every 8-hour shift.
  7. You will need about 120lbs of CO2 per hour.

Try it with your current extractor and see the extraktLAB advantage.

Using simple ratios, you should be able to scale your own operation. Here is an example for a typical low pressure system:

  1. 400-600 ft sq for one extractor + infrastructure.
  2. 300-600 amps per extractor + infrastructure.
  3. 5 kg every 4-6 hours, or, 20 kg/day/machine.
  4. Trim @ 20% THC = 250 – 375 g/hr.
  5. No issues.
  6. One person per machine per 8-hour shift.
  7. Approximately 20lbs per hour

Now scale it up:

  1. You will need 18,000 sq.ft.
  2. You will need 18,000 amps.
  3. You will need 45 extractors.
  4. Your throughput will be 6kg/day/machine or 270kg/day for 45 machines after 20-hours of operation.
  5. No issues.
  6. 45.
  7. Approximately 20lbs per hour per machine (900lbs of CO2 per hour).

 

Calculate Your Potential Yield

 

We encourage you to use your own numbers and do the calculations for yourself. You may find your technology is not scalable and is costing you more in resources/revenue than you thought! Use our CBD Yield Calculator to find out how much product you could get from the amount of biomass your current technology can process and see the extraktLAB advantage for yourself. Ask us for your Co2 extraction machine wholesale offer.

Call 651-600-0036 for more information about how we can scale your existing extraction operation today! Get our Co2 extraction machine wholesale today!

As always, don’t forget to follow us on Instagram!

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 labor difference between ethanol extraction vs. Co2 extraction?

The direct labor between the two techniques is essentially the same. However different configurations of equipment and different workflows can improve labor content and headcount. The concept of value-added Labor in this instance is very important. Value added labor is the labor content that is spent by the laborer on Direct conversion of the product into something the customer values. In reality most operations have a very low value-added labor in a very high overhead component to direct labor. We suggest the use of lean techniques and Value Stream mapping to improve workflow, reduce inventory, and by extension reduce the headcount required to produce a unit.

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. 

Revenue

  • 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?

Yes.
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.

Can CO2 be used to extract other botanicals?

CO2 is used to extract many different kinds of biomass. The most famous and successful industrial process for CO2 extraction is the coffee decaffeination process. However there are many other essential oil extracts that are used in the supplements industry that utilize CO2 extraction. Hops is a good example. cops are used to brew beer and add flavor to beer. CO2 traction is used to extract the essential bitter flavor from the house so that the flavors can be Blended and Preserved.

Is CO2 cheaper than ethanol?

Yes.
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.

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