#1 No Holds Barred | Podcast
This episode has Dr. Jon and Randall Thompson answering questions regarding farming, growing, processing, testing, and building a successful hemp extraction and processing business.
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| S1: 00:00 | [music] All right.
| S2: 00:25 | Hey. We’re live. Welcome. This is good. Dr. Jon, Randall Thompson here. We’re here to answer your questions. This is what we’re going to try to do on a more regular basis. But we’ve been getting just a slew of questions in for Dr. Jon. We’ve got a lot going on.
| S1: 00:43 | Yeah. Yeah, we do [laughter]. It’s exciting times that we’re in. Everybody who’s in the hemp industry just has this tremendous opportunity to get up and running, create a small business, create a legacy for their families. And so it’s a really exciting time. I am so proud and very honored to be a part of what’s going on.
| S2: 01:07 | Well, this is a No Holds Barred Q&A session. And we’ve got the questions coming in. Wow. We have been hit hard. So let’s hit it off the top, and let’s make sure– one of the biggest questions we have is availability of ethanol and the differences in ethanol and what we should be doing, ethanol versus CO2. There’s a lot of questions about that right now. Dr. Jon, you want to hit that?
| S1: 01:31 | Yeah. I’ll just talk about availability of CO2. As soon as this COVID thing happened, we were hit up immediately to transfer our operations over to hand sanitizer. So we started to say, “Oh, yeah. No problem. We can do [laughter] that. We’ll go to barrels and barrels and totes and totes of the stuff.” Okay. Basically, all the ethanol that’s on the market right now is basically flushed out. Don’t know where it is. We’re looking at, if we’re trying to get totes of IPA or totes of ethanol according to the specifications, we’re not actually able to get it anytime soon. So if you are running an ethanol operation, you’d be interested to hear if you’re able to get stockpiles of ethanol to actually run your equipment. But from what we’re seeing, we can’t actually get any more until mid-May. Luckily, we had totes of it around. We’re going to use it for our research and development, but we’re not going to get into hand sanitizer and things like that because it would all go away overnight essentially.
| S2: 02:40 | Exactly. Yeah. Its skyrocketing costs. And one of the things that we always talk about in CO2, supercritical CO2, is that the capital equipment initially is a little bit higher priced than ethanol, but the overall cost, the crossover is months.
| S1: 02:59 | Yeah. The operating costs are very, very high, the variable costs, so things like how much ethanol are you losing, how much you’ve got to pay in transportation for your ethanol, the infrastructure, added infrastructure costs also associated with that, and then the electricity to basically cool all that ethanol down. When you add all those costs up and you break them all down to how much it’s costing you per gram, it is much, much, much, significantly higher to operate an ethanol extractor than it is a CO2 extractor. I mean, we pay four cents a pound for CO2. I mean, and it’s readily available, industrial. And when we call up the guys, they ask us, “Well, how many tanker trucks do you need at four cents a pound [laughter]?” What’s the big deal?
| S2: 03:49 | Yeah. It’s bubbles.
| S1: 03:51 | Yeah. It’s bubbles.
| S2: 03:52 | It’s bubbles.
| S1: 03:52 | We use [laughter] bubble extractor.
| S2: 03:55 | Yeah, a scientist, business guy [laughter]. I use different terminology. But that’s a great thing. And one of the things that I love about what Dr. Jon has brought with United Science and extraktLAB and what we’re doing here is we are looking to make sure that we’re helping you find revenue, generate revenue, make money, profitability, lower costs, everything. That’s what we want to do. Every piece of equipment that Dr. Jon has designed and developed has been to really increase your throughput and lower your cost. That’s what it’s all about. So we want to keep doing that.
| S1: 04:31 | Yeah, absolutely.
| S2: 04:32 | Well done.
| S1: 04:33 | Yeah.
| S2: 04:33 | Well, well, well done.
| S1: 04:34 | Yeah, no problem.
| S2: 04:35 | We do have other questions coming in. I’m sure we’ll get back to more of that. And please, keep bringing the questions in. Would love it. Peter asked this question, “I see a lot of companies selling hemp seed oil as CBD oil. Am I wrong?”
| S1: 04:54 | Yeah. No, no. You’re right. I mean, so the way that the rules are set up at some outlets, for example, in mass like Walmart, Target, Costco, [Savant?], they will not accept CBD products at this time and neither will Amazon. So what a lot of people do is they’ll substitute CBD oil with the word hemp oil. Okay? And that gives them, as long as there’s no CBD in there or it’s not on the label, they can go ahead and sell that in mass then. So you see these hemps lotions and things like that in Walmart. Because it has a marijuana leaf on it, people say, “Oh, that must be hemp.” And it’s not hemp. It doesn’t have any CBD in it. But hemp oil itself is highly beneficial. It has the right ratios of omega fatty acids. It’s got great phytonutrients. It’s great for the skin, and it’s at a much lower price point. So I wouldn’t necessarily say hemp oil is a really bad thing. It’s actually quite good. It just doesn’t have the active ingredient. The way they make it, Randy, is they take the seeds and then they crush up the seeds and all the hemp oil drips out. So there’s different types of hemp oil too. One thing that’s kind of cool. So they have cold-press hemp oil, kind of when it comes out, it’s almost green. You can buy organic hemp oil. And then you can buy refined hemp oil which is, all the green is taken out of it. So there’s a lot of different hemp oil products that you can buy. Also, hemp seeds are really great. Have you ever tried them?
| S2: 06:35 | Yes, actually. I have. I put them in my smoothie [laughter]. [inaudible].
| S1: 06:37 | Yeah. They taste awesome. I love hemp seeds. So all this talk about hemp seeds and what they– hemp seeds, and they’re maybe not as profitable, say, as CBD. People still use them. And I like them, actually, so.
| S2: 06:57 | Yeah. Okay. Excellent. Thank you for that answer. Couple of other questions. Yes, this is being recorded. There will be a replay available probably fairly shortly after the broadcast. And we’ll be putting it up on our site as well. Follow-up question to our ethanol. The question came in is, “What’s the difference between corn ethanol, corn-developed ethanol and the ethanol we use in our processing?”
| S1: 07:25 | Oh, okay. Okay. So there’s lots of different grades of ethanol, okay? One key, major distinction that you need to remember is food-grade versus denatured, okay? That’s the number-one distinction that you need to– so a food-grade ethanol has a certain specification to it. Usually, it’s a high-proof. It doesn’t have a denaturant in it, so the denaturant, Randy, is essentially a chemical that you can put into the ethanol. It’s governed by the BATF or the ATF. It’s the government. And they have recipes that they published, okay? And this all goes back to the Prohibition and the stills. And they want to make sure that they can control a food-grade ethanol, something that’s going to be consumed as opposed to an ethanol that’s not supposed to be consumed, okay? So with a denatured ethanol, they’ll put heptane into the ethanol or they’ll put hexane or they’ll put acetone or IPA or methanol in there so that it’s not consumed.
| S1: 08:31 | Now, some of those ethanols are approved for food use. But the problem with it is is that if they don’t take out all the heptane or they don’t take all the denaturant, there’s always a little bit– I’m an analytical chemist. I could see everything. There’s always a little bit of, say, heptane or hexane left in your stuff after– and they’re supposed to be in there at “safe levels,” so you’re consuming safe levels of heptane or hexane or something like that. And I have a big issue with that because, fundamentally, the federal government has not evaluated the neuropathy effects, the effects on emotional stability, all of the endocrine system effects because they made these decisions back in 1980s on the basis of a single study, for example, 1981 on 10 [inaudible] rats, so [laughter]. It’s really very thin amount of [crosstalk].
| S2: 09:34 | So you’re saying that even though we’re buying CBD oil for use to get healthier or to feel better or to whatever, we can’t ever say or promise, there’s a reason that we’re taking it, that we could be ingesting some of this nasty stuff.
| S1: 09:53 | Yeah, and people do. I mean, we have lots of samples that come into our laboratory. We operate a laboratory. We have lots of samples come in, and yeah, they have acetone, IPA in them, methanol, and they’re supposed to be fit for commerce. And we can actually detect this stuff. So that’s a big issue that people are really not aware of. If I was going to give it to my kids, I’d never give– even if it’s got a safe certificate, if it’s coming from ethanol and you’re ingesting it, I just don’t want to have my kids have heptane or hexane.
| S2: 10:24 | Well, is there a way– is there a way for–
| S1: 10:26 | –even at trace levels.
| S2: 10:27 | –us as a consumer to know whether or not we’re getting CBD oils to use as a tincture or anything, that it’s really made with supercritical CO2 which is just bubbles versus denatured ethanol? Is there any way to know that?
| S1: 10:43 | Yeah. I think that you’ve just got to read the label. I mean, usually, CO2 companies label their products, say, “Hey. This is made with CO2.” The reason they do that is because there are a lot of– there are a lot of companies out there that say, “Okay. Well, we’ve put all this money and all this effort into making this product. We care a lot about consumer safety and also the most pure product possible. And so we’re going to put that on our label, CO2.” So a lot of people who are– especially if you’re inhaling it, okay, or vaporizing it or something like that, you don’t want to have to use ethanol extracts for that because even if it doesn’t have any of the denaturants in it, it still has ethanol in it, and that’s not meant to be, for example, inhaled.
| S2: 11:29 | So other extracts that are out there as kind of food-grade, if we’re talking about vanilla extract, for example, that everybody loves in chocolate chip cookies [laughter], what kind of an extract is that? And what is used in that? Is that just a food grade?
| S1: 11:46 | Yeah, it’s a food grade. Yeah. And those are food-grade alcohols, so they’re up to the standards. They don’t have significant amounts of these extra chemicals in them. And certainly, they don’t add the chemicals in them [laughter] and then say, “Here you go. You can avoid excise tax by buying this stuff.”
| S2: 12:04 | Okay, so that’s where the market needs to be headed, and that’s where we’re headed. That’s where we are.
| S1: 12:08 | Yeah. Right.
| S2: 12:09 | Now, does that also coincide– one of the questions that came in was, does that coincide with GMP certification? And there’s a question that came in, “For EU GMP certification, do you need to go with the scCO2 process versus ethanol?”
| S1: 12:28 | I don’t have an answer for that. I think that you will have less regulatory scrutiny trying to show the regulator that you don’t have cross-contamination with CO2 as opposed to ethanol. So let me explain what that is. Ethanol typically, you’ll use the ethanol again and again and again for extraction. And what happens is, some of the extractants that don’t quite make it out when you try to remove them and make the ethanol pure again after you extract, they’re still dissolved in that ethanol. So there’s a constant stream of cross-contamination that happens, okay? The FDA and the US guidance is that the solvent has to be brought back to a state of originality. In other words, it has to be brought back to its original, pure state, okay? That is more or less impossible with ethanol, okay?
| S1: 13:25 | So I don’t know how EU regulators are going to deal with this. I have heard that there are some ethanol facilities out there, but that are doing that in Europe. I think that it’s going to come down. In order words [laughter], regulators going to regulate. Okay? And usually, what is called a current understanding, CGMP, okay? So the word current means, what are we going to pick on this year [laughter] in a very general way, okay? So this year, we’re going to talk about data integrity. Okay, this year is our strategic plan to make sure that people are talking about solvent purity or complying with solvent purity. So it’s more or less a regulatory focus, okay? And so the cross-contamination associated with solvents that you can’t really reproof or make original again is going to be a huge issue with a CGMP, I think in Europe and in the US.
| S2: 14:27 | Excellent.
| S1: 14:27 | And the CO2, of course, you don’t have that problem. And it’s no secret I’m a CO2 guy. But with the CO2, you don’t have that problem because it’s inexpensive and you can recycle it within the batch, but then after the batch is done, it’s gone.
| S2: 14:44 | Perfect. Okay. Is the equipment, the extraktLAB and United Science puts out that you [penned it?], are they GMP-compliant?
| S1: 14:57 | Yeah. So when we take a piece of equipment and we import it into the EU, we have to go through a whole body of regulatory actions. So one of those is CE. We have to have a CE mark. We also have to have a notified body within the European Union. And we have to be PED-compliant, at least with our high-pressure equipment. And then typically, what we’ll do is we’ll get a user requirement specification from the customer, “Okay. Here’s what we require from you.” And then if there are any variances because there’s a lot of different countries and they all have their own– even though there’s EU GMP, they all have their different regulatory focuses, okay? So you may have to tweak the equipment in some way. But most of it is surface finish, making sure that you have all of the– all of the oils are well-swept through the system, making sure that you can have CIP places in place which means clean in place so you clean it and you have maintenance records. So all that stuff is really built into our equipment. It’s really awesome.
| S2: 16:04 | And is there a way to manage and monitor that? Do you do that? Is there a manufacturing process that can help you manage that when you install?
| S1: 16:17 | Yeah. Yeah. Okay. So in the equipment itself, we have barcode readers and receipt printers. That’s a big deal because, first of all, some people want to have secondary back-ups to the data you’re generating during the run. Okay? So what method, what the user is, what the serial number of the equipment is, when it was calibrated, what the maintenance procedures are, all that stuff [inaudible]. And so after you get done with the run, that little receipt that prints out, you just print it out. And a lot of people like that because they can put it in their notebooks or they can have any other secondary quality system that they can replicate that data then. Then also, there’s the actual system itself allows you to really put in a lot of the– a lot of the metadata like the batch number, the lot number of all that items. And you can scan it in with a barcode reader. So that’s essentially what’s built into the system. There’s also a software-hardware combination that we have which we’re just launching. It’s called the igwLAB. Just real quick. And it’s a quality manufacturing execution system that really would help people become compliant.
| S2: 17:24 | Oh. That’s excellent.
| S1: 17:26 | Yeah.
| S2: 17:26 | Love that. Going back to– and sorry, we’re jumping all around, but I want to make sure we hit all the questions. Going back to a question about ethanol, there are some times when ethanol is pulsed into a CO2 process. And if you’re reusing ethanol in the same batch or a lot, is cross-contamination an issue? Now, that’s not necessarily with that pulsing into CO2. But if you’re reusing, that’s the way the question came in from Jeff–
| S1: 17:59 | Yeah. Sure. So my answer to that is, and so it’s, yes, you would typically reuse it and reproof it. Okay. So that’s the first thing. And you would use a food-grade ethanol if you were using as a pulse or a winterization step. So I really don’t have a problem with food-grade ethanol. If you want to use food-grade ethanol, go ahead. It’s just really expensive. Okay. So and your cost per gram to produce stills skyrockets when you use that, so that’s the main deal there. Okay. But then also your question was about reproofing and revalidation. It’s true that you would need to revalidate. And you can revalidate your process. You can use a still to revalidate. You can use a still and then validate that still. So the answer is yes, you can do that. But the issue with the difference between the amount of ethanol that you need to reproof with CO2 and the amount of ethanol that you need to reproof with an ethanol processing plant, you’re just on a different level. Okay? You’re talking about reproofing 100 gallons versus 100,000 gallons or 100 gallons versus 10,000 gallons. It’s just not even in the same league, so. And the equipment’s not the same. And so a lot of people use fractional distillation, all kinds of equipment like that. But so–
| S2: 19:20 | All right. Good.
| S1: 19:20 | –whatever.
| S2: 19:21 | Thank you [laughter]. Thank you. Thank you. Thank you. Okay. Other questions. Sally, we’ll have to take that offline. Dr. Jon can’t answer those types of questions–
| S1: 19:31 | Oh [laughter]. Okay.
| S2: 19:33 | –on the air. But thank you for the question, Sally. Interesting. Okay. Dave [laughter]. Dave is asking, “Does ethanol cause off-flavoring in the final product?”
| S1: 19:46 | Yeah. Yeah, you can taste it, especially in the vape. If you have it in a vapor, you definitely can– that’ll burn. So yeah. The answer’s yes. Yes, absolutely. And then if it’s in a– if you take some Everclear, okay [laughter], and just add a couple of drops to your olive oil and taste it before and after, you’ll feel that. You’ll feel that burn, okay? So anything that is an ethanol, like a good whiskey, will burn you, so. I don’t like Scotch at all.
| S2: 20:23 | Oh, you don’t? Okay.
| S1: 20:24 | No [laughter].
| S2: 20:24 | And his nose is growing [laughter] as we’re talking. Thank you for that. And yeah, there’s always the flavor issue. You want to make sure that it comes out. And one of the things that’s interesting that I’ve seen you install in other processes is being able to remove the terpenes at an early level and then reintroduce them later.
| S1: 20:48 | Yeah. So that’s a part of flavor and aroma. And really, it’s the next stage, I think, in terms of processing. And a lot of people want to have the full– they want to have the full spectrum. And they deserve the full spectrum, actually, because a lot of those terpenes create what’s called the entourage effect. And of course, that’s something that you might lose in an ethanol type of extraction. So you want to make sure that you’re preserving those terpenes. Now, if you use a vacuum distillation ahead of time like what we do, we get gallons and gallons and gallons of pure terpenes out. It’s really great. And they’re full spectrum, so if you put them into your analyzer and you want to see what you got, it looks real. And then of course, once you have those pure terpenes, you use them in formulations. So I can, for example, take a strain that’s maybe a cannabis strain like LA Confidential or Bubba Kush or whatever, I can get the pure terpenes out of those and then put them into my hemp distillator, my hemp extract formulated up so that it has that same strain flavor that, say, a LA Confidential would have. It’s beautiful. It’s wonderful, so.
| S2: 22:09 | Wow. So you can dial that in?
| S1: 22:11 | You can dial it in. Yeah.
| S2: 22:12 | So when you’re talking about– so the terpenes really add that, we were talking about earlier, flavor and aroma–
| S1: 22:18 | Yeah.
| S2: 22:19 | –because a lot of the flavor comes from the aroma as well, and the terpenes are spectacular and rich, right?
| S1: 22:26 | Right. Yeah. So and some of them are also bad actors. Some of them will have a malodor to them, so you need to think that that’s why, if you have all your terpenes together, you don’t treat them separately in a separate process. You may have an issue with a malodor too, what they call a dank smell [laughter], dude.
| S2: 22:47 | Yeah. Dank smell, dude. I just said that [laughter]. That’s good. I love it. Follow-up question Dave’s asking, “Can you explain the consumer product benefits of terpenes?”
| S1: 23:03 | Well, that’s a complex question. I don’t think I can answer it in any kind of 30 seconds or less.
| S2: 23:09 | Well, let’s just go– I mean, are there high level, other than aroma and flavor?
| S1: 23:15 | Yeah. I look at it primarily as aroma and flavor. And the issue with the– when you take and you get the terpenes out, there are thousands of them in there. And so that is part of the issue with really drawing and saying, “Okay. Well, this terpene has a calming effect,” or, “This terpene has a sleep effect.” In my view, that’s more marketing than it is science. Okay? That’s why there’s so much great opportunity for science to come in and kind of sift all this stuff out. I mean, there are plenty of chemical companies right now that you can buy “synthetic, pure terpenes” from. And those things can go into trials, and they can be looked at from that standpoint. So the short answer is, it’s a difficult question, and I don’t want to step out and say, “Okay, well, this terpene is good, and this terpene–” and yeah.
| S2: 24:14 | Yeah. Fair enough. And it’s just more the benefits. And the biggest benefit, Dave, I think from this is you can look at terpenes as part of the full entourage effect, and it’s really aroma inflater.
| S1: 24:26 | Yeah.
| S2: 24:27 | That’s really it.
| S1: 24:29 | People really, they want to enjoy the products that they’re taking. Yeah.
| S2: 24:32 | So further down the pipe, when you’re talking about going to isolate versus distillate, when you’re talking about reintroducing the terpenes, at what level does that happen?
| S1: 24:44 | Okay. You mean concentration-wise?
| S2: 24:46 | Yes. [inaudible]. Thank you.
| S1: 24:48 | It’s very little. It’s like un poco [laughter]. Yeah. It’s very little.
| S2: 24:53 | Okay. Tiny.
| S1: 24:54 | So a little terpene goes a long way, so. And there’s things that you can do to the natural terpenes to polish them up and maybe enhance the flavor in some way. So in fact, that’s really a formulator’s dream, right?
| S2: 25:16 | Yeah.
| S1: 25:16 | That they can get the pure substance which is the natural pure substance and have it in gallon buckets [laughter] and say, “Okay. Well, this is Bubba Kush. This is my Cherry Wine. This is whatever.” And you’ll be able to see and you can use your analysis to really then make a unique branded product.
| S2: 25:36 | Which piggybacks on another question that came in, and that is, “Are we overanalyzing the cannabis plant by doing this?”
| S1: 25:45 | Yeah.
| S2: 25:46 | And I’m talking to an analytic chemist, right?
| S1: 25:48 | Yeah [laughter], I guess so. I kind of [inaudible] appears that way too. That’s kind of why I talk about aroma and taste as being the highest order of importance when it comes to terpenes. So I think that’s the most important part. And the other, maybe medicinal, benefits that may or may not be there are kind of secondary, actually.
| S2: 26:11 | Yeah. Exactly.
| S1: 26:12 | So yeah. I mean, if it’s got to taste good, right?
| S2: 26:14 | Yeah. Absolutely. No, I think that that’s good. And going all the way down, if we’re talking about dialing in their own levels of taking each element, each of the cannabinoids and putting them in and getting those, you have got a process that you can do with that. Can you speak to that because there’s a lot of questions out there?
| S1: 26:35 | Okay. Yeah. So yeah. Okay. So that’s what’s called the pure 99, and basically, it’s HPLC. It’s a large-scale HPLC. It’s got a 10-inch diameter column on it. And you can go very fast, of course, and take the THC out of it so that a lot of people want to have only CBD, and they want to have it in what’s called a broad spectrum. And that means that you have CBD in there, plus the broad spectrum of terpenes in there. Some people think that it means that you also have a broad spectrum of cannabinoids. But the reality is is that, after you go through that process of separation, you’re getting a pure CBD out. So the pure 99 is an HPLC piece of equipment that will do large-scale separations of cannabinoids. And so you can just literally just, okay, take the THC, put it in one bucket and take the CBD, put it in another bucket. It’s beautiful.
| S2: 27:31 | Do you lose the entourage effect when you go there or can you dial with it?
| S1: 27:35 | So you have a lot of the– there’s a lot of the phytonutrients and matrix is what we call it. This may be a technical term, but all of the other stuff, the goo, okay, that kind of comes out along with the CBD. And the THC stays in a different fraction. So yeah, so you get that. Now, you would also, if you had terpenes in there, those terpenes that came out of the same time as the CBD, you would also have that in. So that would be a broad spectrum. And you would get the entourage effect. But you could also post-formulate to add your aroma, to add your flavor. I mean, that’s what it’s all about.
| S2: 28:17 | So when you’re dialing in your own formula, is that what you’re talking about with the pure 99 is being able to dial in your own formula?
| S1: 28:26 | I mean, kind of. Yeah. So you can, yeah, I mean, first level would be to just take the THC out so that you can sell it in broad spectrum CBD. The second level would be, okay, to slow the separation down and to separate out CBG, CBN, THC, but it’s a lot slower. So you would need to– you’d need to do some scale-up measurements there to see how many grams or how many kilos you needed during the day. But yeah.
| S2: 28:58 | Okay. Follow-up question to the terpene issue. You mentioned there’s a lot of terpenes in that you extract from the process as you’re running biomass. There’s a gentleman who– it’s off my screen now, but I don’t remember your name. I apologize. How are you getting gallons? When they’re running and trying to extract terpenes, they get a small amount. What’s the secret?
| S1: 29:25 | Well, we [laughter] were doing five tons a day.
| S2: 29:27 | Well, that’s a good secret.
| S1: 29:28 | That’s probably, yeah, so that’s the more you have, the more you get. So yeah, there’s a percentage typically. But the best you’re going to do is about 1% by weight by terpenes.
| S2: 29:41 | Okay. And is there a place where it’s best to remove the terpenes?
| S1: 29:47 | Yeah. I mean, you can also use you CO2 system to get a very terpene-rich what they call a soup. And that’s a very common technique. Typically, you would run your system subcritical. Okay? And then you’d do a terpene run. You’d get a nice soupy terpene mix out. And then you’d switch your system over to supercritical so it would be faster. So that’s typically what people do with the terpenes and where they get them. Is there a better place to do it? Well, you just want to preserve– terpenes are reacting all the time, and they’re degrading, okay? And so typically, you want to get them out as soon as possible. And that’s why people are interested in live resins and things like that because you get them out right in the plant. When it gets harvested, you’re taking it out. It’s done. And then it’s kind of preserved because it’s in the resin. So the sooner you can get it out, the better, I think. But also, live resins and things like that, those are not very stable, shelf-stable. You try to put a live resin on the– the terpenes in there will start to react. And since they’re those very volatile ones, they’ll react or they’ll change forms. The odor will change. The color will change–
| S2: 31:04 | Oh my.
| S1: 31:04 | –over time. All that stuff. So yeah.
| S2: 31:06 | Okay. All right. Ricardo is asking, “Are there any other cannabinoids you see becoming commercially viable other than CBD, CBGs, and you said CBD twice?”
| S1: 31:21 | Okay [laughter]. Well, let’s see. I started in this industry right back in about 2013, 2014, I guess. And back then, there was all of these different strains. Everybody was talking about Charlotte’s Web strain at the time, the high CBD, low THC. And then everybody was always kind of, “Oh, well. We want all these other cannabinoids.” Of course, they were all in there at 0.2%. So they weren’t commercially viable. So after a lot of time and a lot of effort of being denied the ability to get the strains that we wanted to have with all these other cannabinoids, I kind of gave up and said, “Oh, no. None of that stuff is commercially viable. Okay [laughter].” However, it’s kind of cool. I mean, there’s been a lot of genetics work happening. Every year, people are moving it a little bit further. They take the strains out. And so it does appear that people have come up with a great, high-content CBG strain which is wonderful. So that’s great. And that’s purely breeding. It’s breeding the plants and getting the seeds out, get feminized seed and just selling them. I think that’s awesome.
| S2: 32:36 | That is awesome.
| S1: 32:37 | I think it’s great. And CBE, like CBN, I know, is like a degradation product of THC, for example. So I think that there’s going to be other ones that come out, and they’re going to be varying. And one of the things that we saw back when we were growing and everything, it’s that, well, some of the strains were just not stable. You’d come up with a 50/50 ratio of something, and then you do a GEN1 and then a GEN2 on your growing. And it wouldn’t be the same. You’d get less CBD and more THC. So I think that that’s all genetics and biology and all those guys. And I really have super respect for them. Hats off at all that they do. But I mean, I’m not that guy. But I mean, I think that there is going to be some viable strains, especially CBG now and probably the whole several cannabinoids after that. So I’m waiting. And I’m happy to see them–
| S2: 33:38 | I love it.
| S1: 33:39 | –like, “We’re going to extract them all.” You know?
| S2: 33:40 | Yeah. Well, we can geek out on all of the cannabinoids and the terpenes. And that’s fun. And it’s the bio guys who are really in there. I do have another question which I chuckled when I saw. And it said, “Holy shit. Five tons a day [laughter].” Obviously, there’s a lot of terpenes and stuff. But how much oil can you get out of five tons?
| S1: 34:04 | Oh, okay. So basically, you get out what you put in, right? So we run some 5% stuff. We’re getting about 5% biomass out. Okay? If you run 10%, you’re just getting more out. So our recoveries for CBD on the cannabinoid side now range from basically 85% to 95%, and we’re typically right around 90%. So if you instantaneously measured our recovery every second, okay, you would see this range. It goes back and forth because the input material is going up and down in potency, okay?
| S2: 34:40 | Sure. Sure.
| S1: 34:41 | So but more typically, right around 90%, interestingly enough, we get better recoveries with THC. They’re more typical right around 95. So we typically range from 90 to 99 percent with an average of, say, 95% with THC. So THC does pretty good on its recovery. So yeah. We have a lot of, how much you get out, you’re talking about, we put all of our oil into five-gallon buckets. Okay? That’s how we harvest it. It could be better. But that’s how we do it. We have food-grade bucket and everything. So you’re getting out lots of five-gallon buckets. I mean, with a one-ton, you’ll get a five-gallon bucket out every hour easy with a 10% [crosstalk].
| S2: 35:26 | Oh, and that all depends–
| S1: 35:27 | Way more than that, actually. But so every hour, so you’ve got 24 buckets a day. Just try to get it into– everybody knows what a five-gallon bucket looks like.
| S2: 35:36 | And that goes back to what is the condition of the biomass when it comes in also and how does it test, what’s the CFA look like, what’s the percentage. And I know I was just talking to our plant manager [laughter], and they got a whole bunch of stuff with stones and pebbles in it. I’m like, “Why would they ship it that way?”
| S1: 35:57 | Ah [laughter]. I don’t know. Yeah, well, sticks, lots of sticks. I mean, okay, so we’ve had all kinds of nightmarish type of things happen with our input biomass. Okay. So that has really spurned us to put input specifications on there. So it should be free from foreign matter and debris. That’s our number-one specification. And what that really means is, yeah, look, there can’t be nails, bullets [laughter], candy wrappers, cigarette butts, stuff like that that comes into your biomass. We don’t want that in our stuff. And if we find it, we reject it. Okay? That’s the first thing. And then usually, shuck-and-buck material is better than just hammer mill, we’re going to take the whole entire plant and hammermill it up. Okay? Some of that hammermilled stuff that it’s just almost impossible to bring it all the way to isolate because there’s so much junk that gets in there. So your end product will also depend on your input product. If you have combined material and you’re trying to get it– and it’s coming in at, what, 5% and you’re trying to extract 5% of that stuff out and you have all this other stuff, definitely, advantage of CO2 is that you’re selective for that stuff, but you’re still getting other stuff. Sometimes, it’s really hard to get to an end product, so.
| S2: 37:29 | Sure. And that’s excellent. Another question that we’re getting is, if we’re bringing that much oil, where are we selling it? And I’m going to field a little bit of that, if I may, and then–
| S1: 37:40 | You may. You may.
| S2: 37:40 | –I’ll just over to you. One of the things that– we have a five-ton facility here because we have that as a demonstration of what we are capable of. And we have clients that are looking to put in large processing facilities. And if the hemp in the certain area like Canada’s industrial hemp, I mean, you need to process a lot of hemp to get some oil out, some reasonable oil, right, so. And here, what we do is we will do, if one of our clients needs an extra run or they are out of capacity, they’ll send it our way, and we’ll do it for them and make sure that we split the profit with them, give them a discount. It’s the family discount, right, because they’re part of the family. And we’re here to make sure– and I said this early on. We’re here to make sure that you’re making money and that you’re doing well in your business. So we’ve got a lot of tools and resources from business chemists, everything to help make that happen. So I’ll toss it over to you and let you add to that if you [crosstalk].
| S1: 38:50 | Yeah. I mean, I’m an R&D guy, right? I’m a scientist, so.
| S2: 38:56 | He really is.
| S1: 38:57 | Yeah [laughter]. I mean, I’m just faking at business, but [laughter].
| S2: 39:02 | He’s a great business guy too.
| S1: 39:03 | But whatever.
| S2: 39:03 | Brilliant.
| S1: 39:04 | No. But you’ve got to have control. If you’re going to truly R&D processes, okay, you have to have them up and running so that you can do process R&D. If you are going to speak to operational excellence, okay, which is basically making your operation profitable and understanding, “Okay, well, here’s an accumulation of inventory over here. That’s just a big pile of money sitting there, big pile of money sitting there, big pile of money sitting there. How do I eliminate all that stuff?” You have to have partners that really know what they’re talking about because they’re going through that themselves from a research standpoint. So that’s something that, really, we have as a value add. And when you’re up at the level of doing that kind of capacity, we just learn all kinds of new things. We’re pushing our equipment to the maximum. We’re getting our yield models out. We’re getting our maintenance models out. And the R&D process is kind of messy. And so we want to help our customers leapfrog over all of that mess. And it’s never pretty. A startup is never pretty, right [laughter]? I mean, there’s always snags and stuff like that, so even with expert help and people who have been there before and all of that, there’s going to be those snags. I’m a big believer in expertise, but I’m also a big believer in the right expertise. I can’t have a lifetime of expertise in oil and gas and say I’m just going to do it all and I know everything. That’s not the way it goes. And I couldn’t do– that’d be just as ridiculous as saying I’m going to run and build an oil refinery, right?
| S2: 40:48 | Thank you. And we’ve still got questions coming in, but we’re going to be wrapping up in the next few minutes. We don’t want to overtax.
| S1: 40:57 | We’ve got lots of questions. My God.
| S2: 40:59 | I know. They just keep coming in. But we’re going to take the questions that you’ve sent in, so keep sending them in, and then we’ll keep rolling after we let you go. But we’re also going to do another Q&A. I think we have to.
| S1: 41:14 | Oh, yeah. We’ve got to do another one. This was fun.
| S2: 41:16 | Yeah, these are fun. I think so also. If you want this again, let’s do it, comment. One of the questions that I had is, Kingsley asks, “Any comment on dry-state decarb before CO2 extraction as compared to liquid-state decarb?”
| S1: 41:33 | Say that again, one more time?
| S2: 41:34 | Any comment on dry-state decarb before CO2 extraction?
| S1: 41:39 | Oh, versus liquids?
| S2: 41:40 | Versus liquid after.
| S1: 41:41 | Yeah. Okay. That’s one of volume. Okay? So if you’re set up to do– look, it’s really surprising the amount of volume you can put through doing decarb in solid state. I like it because you’re really able to– you’re not going through all that processing, so if you decarb the plant material, you’re not processing that material, so you’re getting out a lot of the terpenes that are very desirable and they’re not degrading. By the time you do all your processing steps and heat it up and cool it down and heat it up and cool it down and then decarb it and then you sent it a– and you sent it into a reactor to cook, that is of– now, you’ve degraded a lot of your beauty, so I want to try to maintain the beauty. You know what I mean?
| S2: 42:36 | I love that. I love that comment. As we kind of wrap this Q&A, No Holds Barred Q&A session with Dr. Jon, thank you. Well done.
| S1: 42:46 | All right. That’s good.
| S2: 42:47 | Keep the questions coming in, and we’ll save them for our next comment. There will be a replay here. Before we go, Dr. Jon, is there anything where I fell short of asking you a follow-up question that you really feel the need that you needed to answer?
| S1: 43:05 | I don’t think so. But I would ask you guys, go on Instagram. Follow us on Instagram. We’ve got a YouTube channel. We’re putting new content on there every week. Like us. Subscribe if you can. We’re trying to do a bunch of fun things just because we’re fun people, and that’s what we like to do, so. If you can see stuff, we’ve made some ice cream [laughter]. Actually, I’m surprised they didn’t mention it, but that’s actually CO2 dry-ice ice cream [laughter]. That’s what they made.
| S2: 43:35 | Oh, wow.
| S1: 43:36 | Yeah. And so we’ve got a lot of ideas to put out there. So like us on Facebook. Shout out to us. We’ll shout back to you. So just honored to be a part of you guys’ question and answer and hope to be working with you guys sometime.
| S2: 43:50 | Thank you, Dr. Jon. I appreciate it. And at the end of this, you’re going to see an option. And I think in the section, you can download the advanced extraction guide anywhere in this and replay as well. And we also have the availability to do what we are calling CBD jam sessions. And it’s a 20-minute call to answer questions about your business, about revenue funding, whatever we can answer within reason, we’ll in 20 minutes answer a few questions so that we can make the best use of those 20 minutes. CBD jam sessions, I think it’s at extraktlab.com/cbdjamsession. I really appreciate you being here. I look forward to having the next Q&A session. Invite your friends and family [laughter] and business associates. And I did skip through a few of the more fun questions, and I apologize for that. I just wanted to get to your more meaty questions. So the next time, we’ll make sure that we have a whole section on fun.
| S1: 44:56 | Okay.
| S2: 44:57 | Okay [laughter]?
| S1: 44:57 | Yeah, it sounds good. All right.
| S2: 44:58 | Okay. Deal. Thanks.
| S1: 44:59 | Thank you.
| S2: 44:59 | Dr. Jon, thank you.
| S1: 45:00 | Yeah, take care. Appreciate it. Bye.
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