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extraction equipment

Starting a Cannabis Extraction Lab? Here Are Some Key Considerations

By Martha Hernández
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extraction equipment

Cannabis sativa contains over 500 different bioactive compounds that can be separated through an extraction process. This is carried out in an extraction lab and the end result is the production of cannabis extracts with a high concentration of specific cannabinoids (such as THC or CBD) with up to 99% purity levels. Cannabis can get easily contaminated with pesticides, heavy metals, residual solvents or other contaminants and thereby pose a risk to the health and safety of consumers. In-house testing allows manufacturers to ensure that the cannabis products they put out to the market are not only potent but also are free of all sorts of contaminants.

The cannabis extraction market worldwide was valued at $9.7 billion in 2020. According to data from Grandview Research, the market size is expected to hit $23.7 billion by 2027, growing at a CAGR of 16.6%. While setting up a cannabis extraction facility can be cost-intensive at the start, the running costs are minimal, making this a profitable venture in the long run. However, you will need to consider these 7 important factors.

1. Location

7 Important Factors to Consider When Setting Up a Cannabis Extraction Facility
A schematic representation of the 7 important factors to consider when setting up a cannabis extraction facility (Figure courtesy of CloudLIMS)

Cannabis is a highly regulated industry, regardless of the country. In the U.S, it is illegal at the federal level, and therefore there’s a need for judicious selection of location to avoid run-ins with the federal government. If you are in the U.S, you will need to check the specific laws in your state. These rules dictate how close an extraction facility can be to a daycare facility, children’s park, school, residential areas, etc. The rules may also spell out how many cannabis facilities can be located in one area and how close to each other they can be. At the end of the day, you also want to ensure that the location that you settle for is readily accessible, secure and close to resources.

2. Regulatory Compliance

A cannabis extraction facility needs to meet regulations that apply to the manufacturing and production of consumable goods to ensure that the safety of workers and end consumers is guaranteed. Here are a few that are of priority:

current Good Manufacturing Practices (cGMP): The CGMP is a regulatory standard enforced by the FDA. It defines the creation, implementation and monitoring of manufacturing processes to meet the quality and safety threshold. It requires manufacturers to use technology and have systems in place to ensure product safety and effectiveness. Cannabis extraction facilities should be GMP certified for operational standardization and for performing transnational business.

National Fire Protection Association (NFPA): Extraction labs use flammable materials which can easily trigger fires. NFPA, which is a non-profit organization, has created standards and codes to minimize injuries, death, and economic losses attributable to fire accidents. The standard describes how labs should be set up and how flammable liquids should be stored and transported to prevent accidental fires.

Local Fire Codes: These are a set of codes/requirements that must be adhered to in all commercial and industrial buildings to prevent fires. They include the availability and proper use of the following:

  • Fire extinguishers
  • Extension cords
  • Smoke detectors
  • Fire exits
  • Fire signage
  • Fire assembly points
  • Sprinkler heads and pipes
  • Fire alarms

Here are some important fire codes that should be followed in a cannabis extraction facility:

  • NFPA 1: The Fire Code Handbook
  • NFPA 30: The National Code for Flammable and Combustible Liquids
  • NFPA 45: Fire Protection for Labs Using Chemicals
  • NFPA 70: The National Electrical Code
  • NFPA 58: The Liquid Petroleum Gas Code

Occupational Standards for Health and Safety (OSHA): Cannabis extraction facilities are compelled by federal law to comply with OSHA requirements for occupational health and safety, and specifically regarding biological and chemical compounds that lab staff may come into contact with during their work. OSHA standard 29CFR1910.1200 requires labs to have a written hazard safety standard for all chemicals, and the standard should be accessible to all employees at all times. Labs are required to have an inventory of all hazardous chemicals with associated details recorded in a Safety Data Sheet (SDS).

3. Staff Management

Lab staff need to train on all hazards in the facility and be given first aid measures in case of an accident. The staff will need to sign that they have received training on the same.

4. Waste Management

Cannabis waste in an extraction facility includes plant trimmings, leftover extraction chemicals, disposed of samples and other debris left behind. Waste needs to be segregated according to hazardous or non-hazardous categories and disposed of accordingly. The lab needs to put measures in place for proper waste segregation so that the waste does not get mixed.

5. Worker Safety

Worker safety in an extraction facility is of paramount importance and should be based on the kinds of risks that each staff gets exposed to in the line of duty. This makes it necessary to have a Job Hazard Analysis (JHA) to assess hazards and put measures in place to avert accidents and injuries.

Laboratory Software for CBD/THC laboratories
A laboratory software for CBD/THC laboratories to schedule staff training and manage staff competency (Figure courtesy of CloudLIMS)

6. Equipment Selection and Management

Cannabis extraction equipment can cost anywhere between $5,000 to $100,000, depending on the type and scale of extraction. When choosing the equipment, you need to factor in the cost efficiency, output, and the final product. All equipment used in an extraction lab should be Underwriters Laboratories Listed (UL-Listed). The equipment also needs to undergo regular maintenance to ensure maximum efficiency and productivity, and to prevent accidents and minimize wear and tear. National Recognized Testing Laboratory (NRTL) certification is necessary to achieve this.

7. Supply Chain Management

Supply chain management refers to the strict monitoring of the entire workflow to ensure effectiveness, eliminate wastage, and boost productivity and profitability. This means tracking raw materials from the time they are received by the extraction facility to when they are released as cannabis extracts. A Laboratory Information Management System (LIMS) comes in handy to support supply chain management in an extraction facility.

Role of a LIMS in Setting Up a Cannabis Extraction Facility

A laboratory software for CBD/THC laboratories, also known as a Laboratory Information Management System (LIMS), helps automate workflows, and thereby improve efficiency and productivity in an extraction facility. A laboratory software for CBD/THC laboratories streamlines in-house testing processes and guarantees that the final extracts produced are potent and free of impurities. A LIMS also comes in handy in managing Standard Operating Procedures (SOPs) and human resources, tracking samples and lab inventory, scheduling equipment calibration and maintenance, and ensuring compliance with the necessary regulations.

When setting up a cannabis extraction facility, sufficient time needs to be allocated to the planning to ensure all-important considerations are in place. This starts with finding an ideal and compliant location, ensuring regulatory compliance, ensuring worker safety, efficiently managing staff, inventory, and waste, and the careful selection of equipment. A laboratory software for CBD/THC laboratories ties these factors together to ensure a smooth workflow and maximum productivity of the facility.

Sustainability in Packaging: A Q&A with Dymapak CEO Ross Kirsh

By Aaron G. Biros
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Ross Kirsh launched Dymapak in New York City in 2010. Born into a family with a storied history in manufacturing, he founded the company after working for several years in Hong Kong where his interests, skills and passions for product development took shape.

Filling a niche for smell-proof bags in smoke shops, the business grew as he immersed himself in cannabis markets around the country. After designing and inventing a patented, first of its kind child-resistant pouch for Colorado’s first adult use sale in 2014, the business has continued to achieve global scale and today is recognized as the worldwide leader in cannabis packaging.

While the cannabis industry has long drawn the ire of environmentalists because of its energy problem when it comes to cultivation, the packaging side of the business faces very similar issues; the cannabis industry also has a plastic problem. In most states where cannabis is legal, state regulations require producers and dispensaries to package all cannabis products in opaque, child-resistant packaging, with several states requiring dispensaries to place entire orders inside large, child-resistant exit bags prior to customers leaving with their purchase.

Dymapak, led by Kirsh, is working on initiatives to help address environmental sustainability in cannabis packaging and turn interest into action industry wide. Ross will offer insights and the business’s action plan at the upcoming Cannabis Packaging Virtual Conference December 1. And ahead of that chat, we caught up with him to learn more.

Aaron G. Biros: Tell me a bit about yourself and how Dymapak came to be. What brought you to the cannabis space and where you are today?

Ross Kirsh, CEO of Dymapak

Ross Kirsh: My family has deep roots in manufacturing. Back in the mid 1970s, my uncle and his brothers all launched separate manufacturing businesses after one of the brothers moved to Hong Kong to open a handbag and luggage factory. The 70s happened to be a unique time to work abroad in Hong Kong given few US companies were operating there when China first announced its open-door policy around 1979. And as you can expect, he became a sourcing agent for many large companies in the US who needed trustworthy boots on the ground.

I went to college, pursued IT and in the back of my mind always knew product development and the manufacturing process was too interesting not to follow. I already knew Hong Kong was ripe for learning entrepreneurship so I went abroad to learn more, and fell in love with the culture, the opportunity and the people.  Immediately after graduation, I moved to Hong Kong. I began working with my family, who taught me the trade – end to end. I helped develop several product lines and lived next to one of our factories in southern China to immerse myself.

After 3.5 years abroad, I began running sales operations back in the US. Fast forward a year back in the states, I had unique customers that owned tobacco and smoke shops telling me that cannabis packaging existed in the market, but not really what everyone was looking for. In truth, the business was born the minute a customer said, “Can you make me a retail ready smell-proof bag?” I figured I could, and the rest – as they say – is history.

What began and was established in 2010 truly took shape at an accelerated pace in 2013, when my relationship with one of the first dispensary owner/operators in Denver – Ean Seeb of Denver Relief – came with a golden opportunity; Invent a child resistant package for cannabis, one did not exist but it was mandated under Colorado’s first-ever recreational cannabis regulations. I spent 7 out of the next 8 weeks in China developing a solution and am proud to say our bag was used in the first recreational sale when Colorado went legal in January 2014. From there, the business grew rapidly, and organically throughout the industry.

Biros: Environmental sustainability is a big issue for cannabis. Not just on the energy intensive side, but particularly when it comes to packaging and its plastic problem. How is your company approaching this issue and are you working on any initiatives to eliminate or reduce plastic waste?

Kirsh: We recognize firsthand the issues that plastic presents. While the material is full of advantages, the disadvantages are both imminent and critical to understand.

What many don’t realize is, for most cannabis packaging that’s recyclable to actually BE recycled, the customer must first find a drop off location, either at a dispensary or elsewhere that accepts the material. The process relies exclusively on the consumer to take action because the products cannot be recycled curbside. And unfortunately, the stats show that very few consumers take the time to bring the packaging back in order to recycle it.

So, yes, we produce recyclable bags in our portfolio, but we really want to get to the source of the problem here – pollution. We looked in a few different areas. And we developed a different bag made with 30% post-consumer resin, meaning 30% is made from reused plastics.

Even more, we recently partnered with a socially conscious, industry leader in the space, Plastic Bank, which builds regenerative, recycling ecosystems in under-developed communities. They work to  collect plastic waste from the ocean – extracting it to ensure its opportunity to enter the recycling ecosystem. Through our partnership with Plastic Bank, we’ll help prevent more than six million plastic bottles from entering the ocean this year alone. And I’m really proud of that.

Biros: Where do you see the cannabis packaging industry going in the next five years?

Kirsh: I think that’s a fascinating question. Sustainability will play a huge role in the future of this market. Just like we are seeing single use plastic bags being phased out across the country, we’ll see that happen to other areas too as part of this larger trend.

I predict more on-time and on-demand needs in the future; the ability to see traceability in real time, similar to the pharmaceutical industry. People will expect batch numbers and lot numbers, with data, in real time. It’ll become central to the business.

Gaining and cultivating trust will be another big hurdle for companies in this sector soon. With federal legalization comes a greater sense of professionalism and more sophistication for the market.

Yet, the continued pressure on environmental sustainability will be the biggest change in the next five years. When you look at sustainability in the packaging industry, paying attention to the format or choice of material should be top of mind. For example, if you’re shipping a glass jar, the amount of space that takes up in a shipping container has a huge impact on the environment, what’s called a hidden impact. One shipping container can hold millions of bags, but you need eight shipping containers for glass jars to get the same amount of storing capacity. That’s about efficiency, which is a bit more hidden, and I hope that consumers will become more and more knowledgeable about what companies are doing to stay environmentally sustainable.

Biros: Ross, thank you very much for your time today.

Kirsh: My pleasure, Aaron.