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Extraction- A Key Component of Global Hemp’s Phase 1 Strategy

Being able to extract cannabinoids from hemp will provide the Company an extremely profitable near-term revenue stream that can be increased substantially as the Partners increase the number of acres under cultivation.

Extraction is a long-established technology. The preparation of a cup of tea, for example, is an extraction process through which flavour and scent are released from dried tea leaves by simply soaking in a solvent (boiling water). Hemp is an infinitely more complex plant than tea, with more than 480 compounds including cannabinoids, terpenes, carbohydrates, flavonoids, lipids, and fatty acids. This diversity varies across many different varieties of hemp, so the feed material entering the extraction process will vary from one lot to another. If it was just a matter of isolating and extracting only one element such as Cannabidiol (CBD), the process would be relatively simple. But if the goal is to extract “full spectrum” CBD with some of the other elements deemed valuable, such as terpenes and flavonoids to yield the full healing potential of CBD through its “entourage effect”, then the process is further complicated.

Most technologies in use to extract CBD from its plant material are solvent based: steam, ethanol, butane or Supercritical CO2(SCO2). Other methods are in development such as cavitation, a physical process that does not require any solvents. Most extraction methods produce an oil of varying levels of purity, that needs to be further refined to yield different products with different therapeutic virtues.

The choice of extractor is in part determined by the format of the final product, as many products require further processing to be able to sell it to the marketplace. Other considerations have an impact, such as capital cost, operating costs, levels of impurity and solvents carried in the outputs. Probably the most popular is the butane-based extraction, which is not allowed in Canada in the food industry. It happens to be the most efficient extractor in terms of capital and operating costs. At present, the choice of industrial scale extraction technologies in Canada boils down to Super Critical CO2or Subcritical Ethanol based. The former is up to three times more expensive than the later in capital cost, but less expensive to operate.

The Partners are now in the process of determining how best to proceed with extraction for the New Brunswick Hemp Project. Whether it be developing its own extraction facility or partnering with an extraction company already in operation, extraction is expected to be a significant part of the New Brunswick Hemp project.