Before new cannabinoid-infused products can hit the market, a key process is required between the greenhouse and the store’s shelves—Cannabinoid extraction is quickly becoming one of the most critical elements to the legal cannabis sector.
The sector’s largest players are already starting to shore up their extraction pipelines, including majors such as Aphria Inc. (TSXV: APH) (OTC: APHQF), Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and GW Pharmaceuticals (NASDAQ: GWPH).
As consumers demand more infused products from lotions and soaps, to beers and wines, to pharmaceuticals, the developers of those products will continue to require a greater amount of pure extracts to fulfill those orders. As well, many THC consumers are demanding pure THC extracts for their own consumption as well, with the purer the product being the most desirable.
Whether done in-house, or by hiring out to the brightest minds in the extraction technology space, the majors are taking measures to ensure they’ve got their extracts in full supply.
Recently a major breakthrough in extraction technology was confirmed by Canadian-based Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF).
Experiments confirmed the feasibility of the company’s proprietary column chromatography extraction technology, which recovered 99% of all cannabinoids (CBD, THC and THCA) from the biomass material—much higher than conventional methods that generally only yield up to 80%.
Not only must successful extractors yield higher percentages, but they’ll have to also be able to process massive quantities of organic material at a time.
Extraction solutions must meet these two requirements, in order to draw in the likes of the Aphria Inc. (TSXV: APH) (OTC: APHQF), Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and GW Pharmaceuticals (NASDAQ: GWPH). Outfits that manage that, will themselves become critical major players during the advent of the sector.
EXTRACTION 2.0
In the very recent era—that what will someday be known as cannabis’s “Dark Ages”—black-market entrepreneurs were forced to make due with whatever methods they could apply.
The result was a lack of extract consistency, coupled with a very real degree of potential hazard—which included an incident in Ontario where a makeshift extraction lab exploded.
Those days will quickly fade away, as legal proprietors can operate in the daylight now, with the security of knowing they have the brightest minds on the task. The results during this cannabis renaissance have been quite remarkable.
This summer, extraction technology developers Radient Technologies Inc. (TSX.V: RTI) (OTC: RDDTF) made headlines by announcing the results of their research joint venture with Aurora Cannabis (TSXV: ACB) (OTC: ACBFF).
Their proprietary MAPtm Technology and associated continuous flow design for extracting cannabinoids from dried cannabis consistently high extraction efficiencies of up to 98%.
That benchmark was recently surpassed, with the success of the column chromatography method used by Abattis Bioceuticals Corp. (CSE: ATT) (OTC: ATTBF).
With results showing quantitative recoveries of 99% of all cannabinoids from the biomass material, it appears that column chromatography is as close as the industry has gotten to completing the proverbial task of using every part of the buffalo.
THE COLUMN CHROMOTOGRAPHY GAMECHANGER
Major cannabis players, such as Aphria Inc. (TSXV: APH) (OTC: APHQF), Aurora Cannabis (TSXV: ACB) (OTC: ACBFF), Canopy Growth (TSX: WEED) (OTC: TWMJF), and GW Pharmaceuticals (NASDAQ: GWPH) may be intrigued by the impressive waste reduction that extracting 99% of the cannabinoids from their biomass entails.
However, the column chromatography method brings with it several other benefits that other methods can’t currently compete with.
Quantitatively, the technology already can handle an industrial scale of up to 50,000 kgs of biomass per day—Though the tests ran by Abattis only had to confirm up to 75 kgs per day.
Economically, once commercialized, a factory running at a 500 kg-per-day processing rate can process CBD at less than $0.20/gram. The cost of capital equipment and overall cost of operation is less than half of conventional CO2 processes.
“The extraction method using proprietary polymers has very distinct competitive advantages over traditional methods,” said Rob Abenante, President and CEO of Abattis. “The technology is capable of extraction on an industrial scale, which delivers significant cost advantages. It is also capable of separating cannabinoids on a molecular level which allows for the extraction of pure isolates such as CBD and THCA and even the separation pesticides from the biomass.”
Purity is a major factor for downstream producers of infused products. What the column chromatography extraction method has proven, is that it’s capable of separating THC, THCA and CBD from a series of cannabis streams at a very high purity level. For instance, the tests yielded production purity levels of 98%+ THCA in crystallized form.
The technology removes all traces of pesticides and harmful residues that may have accumulated during the cultivation and transportation process—a big bonus, especially for consumers looking for the least amount of intrusion from unwanted toxins.
“We believe the implementation of this extraction technology has the ability to give Abattis a competitive advantage in the extraction industry,” added Abenante.
“It is our intention to position the extraction technology with the largest producers and oil manufacturers in North America to provide the market with the highest quality distillate and isolates, at the lowest cost. We feel the evolution of the industry will lead to the commoditization of marijuana and hemp, at which point downstream services such as extraction will become the primary focus of the industry as companies compete to create thousands of new products based on the numerous derivatives.”
Along with the technology itself, Abattis secured the dedication of its key developer, Frank Zhu, who was brought in to North America to oversee the installation, tests, and calibrations.
Zhu’s key IP is currently one of the only toll-processing technologies that can extract high-purity CBD on an industrial scale, and can fully separate out individual compounds such as THCA.
Abattis has its sights set on initiating a full-scale North American extraction program in 2018, setting up facilities in both Canada and the United States, in order to service its partners, and future partners, to the benefit of consumers across every legal cannabis market.
POTENTIAL BENEFACTORS OF EXTRACTION DEVELOPMENT
Aphria Inc. (TSXV: APH) (OTC: APHQF)
Aphria is one of Canada’s lowest cost licensed cannabis producers, specializing in the production, suppy, and sale of medical cannabis. The company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It also provides support services in the form of medical consultations, group therapies, and rehabilitation to veteran and first responders. The company sells its products through its online store or phones, as well as engages in the wholesale shipping of medical marijuana plant cuttings and dried buds to other licensed producers. Aphria Inc. is headquartered in Leamington, Canada.
Aurora Cannabis (TSXV: ACB) (OTC: ACBFF)
Aurora Cannabis boasts the second highest square footage approved for cannabis production in Canada. Together with its subsidiaries, Aurora produces and distributes medical marijuana products in Canada. The company’s products consist of dried cannabis and cannabis oil.
Aurora is the only cannabis producer located in the province of Alberta, giving the company a cost advantage through its free use of fresh mountain-fed water used on site, and housed under the lowest corporate tax rates and power rates in Canada. Capitalizing on numerous farm credit programs provided by the province, Aurora has positioned itself as arguably the lowest cost-per-gram licensed producer in Canada. Aurora became a licensed producer in 2015, and is based in Edmonton, Alberta.
Canopy Growth Inc. (TSX: WEED) (OTC: TWMJF)
Formerly known as Tweed Marijuana Inc., Canopy Growth is a multi-licensed, geographically diverse marijuana producer, described as “one of the world’s — and Canada’s first — premier exporters of marijuana” by the Financial Post in 2016. Canopy is the parent company of licensed cannabis producers, Tweed Inc., Tweed Farms Inc., Bedrocan Canada Inc., as well as newly acquired Mettrum Health Corp. Canopy currently has a combined growing platform of over 665,000 sq. ft. of production space. It was also the first federally regulated, publicly traded cannabis producer in North America, and the first billion-dollar cannabis corporation. Canopy Growth was founded in 2014, and is based in Smith Falls, Ontario.
GW Pharmaceuticals plc (NASDAQ: GWPH)
GW Pharmaceuticals is a biopharmaceutical company that engages in discovering, developing, and commercializing cannabinoid prescription medicines using botanical extracts derived from the cannabis plant. The company markets Sativex, an oromucosal spray for the treatment of spasticity due to multiple sclerosis. It is also developing Sativex in Phase II trials in neuropathic pain. In addition, the company’s product pipeline includes Epidiolex, which is in Phase III clinical development for the treatment of dravet syndrome, lennox-gastaut syndrome, tuberous sclerosis complex, and infantile spasms, as well as other product candidates in Phase I and II clinical development for the treatment of glioma, adult epilepsy, and schizophrenia. It primarily operates Europe, the United States, Canada, and Asia. GW Pharmaceuticals plc was founded in 1998 and is based in Cambridge, the United Kingdom.
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