The Amazing Business Case for Cannabis Extraction with Patrick Taylor of Eden Labs

Cannabis Extraction Eden Labs

Edibles and vape pens are changing the cannabis market right now. People are shifting away from cannabis products that involve lighters and smoking. As such the demand for cannabis extraction technology is growing month-by-month. Patrick Taylor of Eden Labs walks us through the technology and opportunity of cannabis extraction

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Key Takeaways:
[1:17] – Background on concentrates and extractions
[1:49] – Patrick explains how he started in the industry
[2:38] – Why the market is demanding cannabis concentrates
[4:14] – The difference between CO2 and butane has oil
[6:31] – Patrick explains Coldfinger and distillation
[7:43] – What part of the plant is turned to oil
[9:43] – Fast ROIs on purchasing extraction machines
[11:51] – Patrick explains extraction machine sizes and process times
[15:02] – Is it difficult to learn how to use an extracting machine
[16:02] – Perfecting the extraction process takes practice
[17:51] – Patrick explains polarity
[19:16] – Contact details for Eden Labs

Read Full Transcript

Matthew: Today’s show is a deep dive into cannabis extraction technology and all the opportunity that exists in this space. If you’re interested in learning more about how you can get involved in cannabis extraction either as an investor or if you have a cultivation facility, and you would like to have extraction services on site, please email us at feedback at cannainsider.com. That’s feedback at cannainsider.com. Now here’s your program.

Perhaps one of the newest and most popular ways to consume cannabis is in concentrates, but before a concentrate can be made the cannabis plant needs to be broken down or extracted. Today we have an extraction expert, Patrick Taylor, on the show. Patrick works for Eden Labs. Eden Labs makes arguably the most sought after extraction machines. Welcome to CannaInsider Patrick.

Patrick: Hey thanks for having me.

Matthew: To give listeners a sense of geography, can you tell us where you are in the world today?

Patrick: Seattle.

Matthew: All right and what’s it like there a little rainy, sunny, what do you got?

Patrick: It’s a surprisingly bright day, but we’ve been getting the typical winter rain lately.

Matthew: Okay. And Patrick for people who are a little fuzzy still on what extractions and concentrates are, can you give us a high level background on that.

Patrick: Sure. The extraction of cannabis, you take all the oils out of the plant and you concentrate it. A lot of people do extractions everyday in their house when they make coffee, kind of the same idea. What’s left behind is just generic plant material. So a lot of cellulose, chlorophyll and we take all the essential oils out of the plant.

Matthew: And how did you get started in the industry with your background?

Patrick: Well I think like a lot of people in the industry I just got into through sheer force of will. I started out very basic and bugged Eden Labs for a job for a long time. And eventually, you know, after a couple of years of trying and educating myself they took me on. I’ve been with them for a little over two years now. Yeah my first extraction was in 2002, but doing it full time now for 3 years.

Matthew: There’s a huge value proposition for both a business owner to be in extracting, but also for consumers. Can you tell us a little bit why business owners are gravitating to extraction machines so much?

Patrick: Well the marketplace is demanding it. Dabs, edibles, vape pens, they’re very in vogue right now. So growers and dispensaries as well are getting these systems. We’re also seeing that there’s a health conscious movement where people don’t want the pyrolytics, meaning just kind of carbon and nasty junk that you get when you smoke flower. So that’s a way to ingest medicine a lot cleaning. Because, you know, the potencies can get pretty high. If what you’re after is let’s say CBD, and you can get an extract that’s 80% CBD, well that’s only 20% of stuff that you don’t really want. Whereas with a flower, maybe that flower is only 10% CBD and 90% that isn’t medical or recreational for that matter.

Matthew: And how would you describe the difference in effect from consuming concentrate versus flower?

Patrick: It’s certainly more potent. Everything is concentrated so all the flavors are more intense. The high is much more intense as well. So I guess the easiest way to describe it would be a glass of wine versus a shot of whiskey, something along those lines.

Matthew: Got it, okay. And there’s still in the news a lot of stories about butane hash oil. Can you tell us the difference between CO2 and butane has oil and why they’re different and better?

Patrick: Sure so from a chemistry point of view of course they’re different solvents. CO2 is an inert gas. It’s all around us right now. It’s inside of you. A lot of people view it as healthier, non-explosive, non-flammable. I feel a lot safer in a lab working with it. I am pretty experienced with butane extractions as well and I always have this nagging fear, you know, kind of like a paranoia when I work with it.

Matthew: I don’t blame you.

Patrick: Yeah, if done right, you know, in a lab environment, butane is an alright solvent. But CO2, you know, I’ll be texting while I’m operating the system and not worrying about it. Butane is a light hydrocarbon, very similar to propane which is what people bbq with. Lots of news stories recently about do-it-yourselfers hurting themselves. So as far as the actual concentrates go, you know, the difference in their properties, CO2 tends to be a little bit less potent. Butane tends to be a little bit more potent. But that ultimately depends on the parameters of how you do your CO2 extraction. So you can tune the polarity of CO2, meaning that you can isolate certain cannabinoids. That’s how we’re extracting all this stuff is through polarities. So you can get into those super potent concentrates with CO2, but it’s a matter of technique.

Matthew: What does polarity mean? Can you tell us what that means?

Patrick: It’s the electrical, the way that the electrical charge is set up on individual molecules. So concentrates tend to have the same polarity as super critical CO2 and butane, propane, ethanol would be another one. And that’s how all these extractions are being done is polar, except for dry ice. That’s like a mechanical extraction.

Matthew: And what about Coldfinger and distillation? Can you summarize what each of those are?

Patrick: Sure. So it’s a modified soxhlet extractor, and it’s Coldfinger, and it’s basically you got a cooled condenser that’s shaped like a finger. User ethanol extractions. It’s a reflux distiller so you have a basin of ethanol in the bottom of the extractor and you heat that ethanol up, boil it and then it condenses on the Coldfinger and drips through the plant material, and you get a little tincture in the bottom. A lot of people are calling it RSO, even though that’s probably a misnomer. But it’s mixed tinctures. It’s really good for edibles as well. It’s definitely an entry level system, but that’s where I started as well. I bought a little Coldfinger extractor.

Matthew: I’m glad you corrected me and said Coldfinger, I think I said Goldfinger. I don’t know if I’m having a James Bond them today or what but thank you. Now will the machine consume the whole plant or just parts of the plant, the flower, trim, stem. I mean what can be turned into oil here? What’s desirable and how does that work?

Patrick: Well I mean just about any part of the plant that has psychoactives in it, everything basically. Now you will see big yield differences and flavor differences in what you put in. Flower, you know, you can get yields up into the high 20s. So 28% is a number that we see often.

Matthew: THC, 20% THC?

Patrick: Correct yeah, and you know another 7, 10, 11% in terpenes. Most people though are doing the sugar leaf trim. So there we see numbers something like 12% to 15%. There’s some people that are growing really well and they’re getting up to 19% yields by weight. And then you can also do stems and fan leaves, but you know that’s definitely kind of bottom of the barrel stuff. And I’ve even heard of people doing root balls. I don’t know what to think about that.

Matthew: So the extractions become so valuable that it’s almost not worth doing the root leaves if you can do anything else, if you could do sugar leaves or flower and things like that. It’s not worth running a machine because it’s so much more valuable to do it with a higher potency plant, parts of the plant.

Patrick: Yeah that’s correct. But you always want to have the machine running 24/7 right. So if you run out of those more desirable parts of the plant, I would say a 1% yield is better than a 0% yield.

Matthew: Right, right. So from a cannabis cultivator I spoke to some cannabis cultivators and I just started hearing some just incredible return on investment numbers with the extraction machines. You know, some people would say I bought the extraction machine and it paid for itself in a week or two weeks. And I was like how do these numbers make sense, and it’s because this is just so valuable this extracted oil, but can you tell us a little bit about that? I mean is it outrageous what I’m saying here? Do you hear these things as well?

Patrick: Yeah you’re exactly on point. Our most successful stories two days, someone paid their system off. And he was vertically integrated. So he had a grow and a system and a dispensary. So it’s definitely an outliner. Like the most common return on investment is probably a week and a half.

Matthew: God that’s insane. Okay and just to give people a sense, these machines are not inexpensive either. You have a range of machines, but can you tell us the price points on these in just high level?

Patrick: Yeah sure. I mostly work in the lab, but I believe our five liter system is somewhere around $74,000 and they go way up from there. So we have a 100-liter system as well which is quite a bit of money. I don’t know the number on that. There’s no other investment like it. You get that first $100,000 and then you’re in business. You’re a millionaire a couple weeks later, but it’s hard to get that first $100,000 of course. You know the 5-liter system that will make 7-900 grams a day easy. So depending on where people are that’s quite a bit of concentrate, quite a bit of money.

Matthew: Yes and there’s investors out there that have seen the dynamics. I’m sure you’ve heard of this Patrick even though you can’t comment, but there is investors out there, if anybody wants to know more about this, email me at feedback@cannainsider.com. But there’s investors out there that will put up the money to pay for these extraction machines because they know what the return on investment is and they want to help you get that return on investment and in return they charge a certain interest rate, you know, on that principle but that would be for accredited investors only. But if you have any questions around that you can email at feedback@cannainsider.com.

Now you talked a little bit about the size of the machines, but can you give us a sense of how big a grow would need a certain size machine?

Patrick: Well I was just at a grow the other day that was about the size of a McDonalds lobby or something like that and they’ve got a 5-liter, and probably their grow is not going to keep up with the system. People always underestimate how hungry the systems are. For instance a 20-liter machine you’re looking at easily 140 pounds a week in order to feed it, but you can always supplement your grow with doing contract work, and that’s kind of what I did a few years ago is I would take other people’s plant material, run it for a flat fee and then give them everything back. So you can make a little bit of money there. People are doing splits as well, your 50/50 split or 60/40 split. So almost no grow that I’ve been to or very few of the grows that I’ve been to have been able to keep up with their system. So they have friends and family or whoever that comes and supplements, but you always want to keep that machine running.

Matthew: Yeah. So let’s say just for simplicity sake I have 1 kilo or about 2.2 pounds of cannabis, how long would it take to turn that into oil, and how much, I mean I know it depends on the machine, and then how much oil would I have?

Patrick: Sure. So let’s say 1 kilo, that’s exactly how much a 5-liter system holds. A 12 to 15% yield so 120 to 150 grams, this is off sugar leaf trim. And that takes 3 hours, 4 hours, somewhere in there.

Matthew: Wow that’s pretty quick.

Patrick: Yeah and it’s easy. It’s not like you’re sitting there turning gizmos. You don’t have to pay attention to it. When I had my facility I had a Playstation in the lab so I just sit there and played video games while it was going.

Matthew: Okay.

Patrick: And it scales appropriately. So if you get a 20-liter, it’s 8, 10, 12 hours, somewhere in there. The larger systems tend to run a little bit quicker.

Matthew: And really what CO2 is doing is greatly accelerating what mother nature would do on her own essentially is that right. Is this the decomposition and breaking down?

Patrick: The cannabinoids actually dissolved into the CO2 just like salt in salt water. So kind of an analogy that I have is if you filled the extractor up with beef jerky and then you moved water across it, and then you boiled the water away, the salt would be left behind, kind of the same idea. Yeah so it’s actually a chemical extraction, and if you could look inside where the concentrate and CO2 is moving through, you wouldn’t be able to see the concentrate just like you can’t see salt in salt water.

Matthew: Okay and you mentioned you play Playstation or you used to when you ran the machine but does it take much training to get up to speed on how to use it?

Patrick: No. So the standard training is two days and that will give you a fundamental framework to operate the system. But it’s kind of like cooking, you know, anybody can make Top Ramen in their house, but then there’s also chefs, right, in Vegas or whatever and they’ve really perfected their art. So we can get you to the Top Ramen stage, but there’s a lot to learn right. There’s a big breadth of knowledge and fortunately for us the Top Ramen sells for $50 a gram or more. So it’s a good way to get started yeah.

Matthew: Yeah I like the way you put that. What is the top of the pyramid as learning? I mean is there other guys doing some kind of interesting things out there as far as how they run the machine or how they go about, their art? Can you tell us a little bit more about that, the creative side?

Patrick: Sure. Most of what we’re going to do is in post processing. So once it comes out of the system are we going to turn it into shatter, are we going to make vape pens, are we gonna just leave it as a wax or an edible. So it’s the post processing is where the real chef side of it comes in. The system, the main difference that you’re going to see is different pressures and those are really easy to experiment with. You know you just do a run and say, oh okay I’m going to do 1600 psi or this time I’m going to try 2100 psi, and you will see a small difference in the consistency of the concentrate because we’re changing that polarity again when you change the pressure. It’s not hard to do, it’s just a little bit of experience that’s all. Typically we see an RND phase of something like two months before someone decides okay this is what I want to take to market.

Matthew: Okay. Do you see a lot of people operating the machines that don’t actually grow their own plant? Like you were saying, they just come in and they do this for cultivators, say like I’ll do this all for you or the cultivators kind of overwhelming majority where they say we’re going to do this ourselves in house.

Patrick: Maybe like 15 or 20% of our customers are contract workers where they don’t have a grow.

Matthew: Okay, okay.

Patrick: And then the rest are gonna be dispensary owners and definitely grows. You know that’s our biggest customer or people with grows that are looking to get into the concentrate industry.

Matthew: Now you mentioned polarity a little bit and this concept is kind of fascinating to me. Could you again circle back and just kind of talk about what exactly that is and how it is going to effect the concentrate because I want to make sure we don’t gloss over that too much.

Patrick: Sure. So molecules have poles on them. So they have, on the left side it will be negative and on the right side it will have a positive charge. And generally things are either polar or non-polar. They’re either positive and negative or the molecule will even out so it doesn’t have any kind of positive or negative charge. And with extractions like attracts like. So polar solvents will attract polar compounds and non-polar will attract non-polar compounds. Most of what we’re after in the plant is non-polar. CO2 is kind of in the middle, as a supercritical, barely into the supercritical range. It’s somewhat polar, somewhat non-polar, but as pressures and temperatures increase you can push it more towards the non-polar side. Butane is a non-polar solvent. Water is a polar solvent. So that’s why if you try to do a water extraction, if you were just going to soak cannabis in water nothing would really get extracted out of it, but if you were to soak it in butane, it does grab things.

Matthew: That is very interesting. I could talk about this all day. It seems like there’s so much information here, but as we close can you tell listeners how they can learn more about Eden Labs?

Patrick: Sure so the best way is the website. It’s www.edenlabs.com. Again that’s www.edenlabs.com.

Matthew: Awesome. Well Patrick thanks so much for being on CannaInsider today. We really appreciate it.

Patrick: Sure, thanks.

Matthew: And just a reminder for anybody out there who is interested in cannabis extraction. You can email us at feedback at cannainsider.com. That’s feedback@cannainsider.com, and we’ll answer your questions. Whether you’re interested in deploying extraction technology at your dispensary or cultivation facility or if you’re an investor looking to learn more about extraction opportunities.

If you enjoyed the show today, please consider leaving us a review on iTunes. Every five star review helps us to bring the best guests to you. Learn more at www.cannainsider.com/itunes. What are the five disruptive trends that will shape the cannabis industry in the next five years? Find out with your free report at www.cannainsider.com/trends. That's www.cannainsider.com/trends. Have a suggestion for an awesome guest on www.cannainsider.com, email us feedback at cannainsider.com. We would love to hear from you.

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