Take a Guided Tour of CO2 Extraction: Part 1

From the machinery and components through to solvent recovery, learn how CO2 extraction is made possible!

Part 1 - get familiar with the systems and equipment involved, from pump technology to phase management.

Carbon dioxide (CO2) makes an excellent extraction solvent for botanical oils. CO2 is a unique solvent as it retains its solvency power as either a (subcritical) liquid or as a supercritical fluid depending on the respective temperature and pressure. By changing the pressure and temperature of CO2, its solubility and selectivity for a specific compound of interest can be changed to optimize an extraction.

This three-part series will provide a guided tour through the process of extraction using CO2 as the extraction solvent. Various aspects of the extraction system will be covered ranging from the machinery and components, the different parameters that can be used, to the interwoven principles of extraction (see Figure 1 for an overview). The first part will provide a mechanical focus on the early stages of the process, particularly on storage of the solvent and the distribution of the solvent via a dual acting positive displacement pump. Part two will examine what occurs during the extraction process in the extraction chamber, solvent power and the associated solubility. Finally, part three will cover the separation of the solutes from the solvent stream and solvent recovery.

The Vitalis Difference - Figure 1 Pages - Block Diagram-01

1. STORAGE

The extraction process begins with the CO2 accumulator. This is the reservoir that supplies the system with solvent during operation. CO2 can be stored here as either a low-pressure gas, a high-pressure gas or a liquid.

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2. DISTRIBUTION

The pump is the next stage of the process. The job of the pump is to deliver CO2 to the system at a selected pressure. The two most common pumps that are used in the extraction industry today are dual acting positive displacement pumps and diaphragm pumps.

DUAL ACTING POSITIVE ACTING DISPLACEMENT PUMPS

Dual acting positive displacement pumps have the ability to deliver an uninterrupted flow of solvent into the extraction system. In turn, the pump’s hydraulic cylinder applies force to two oppositely directed pistons. Liquid enters the available space ahead of one piston, as force is applied to the other to deliver a volume of the solvent. At the completion of this stroke, force is then applied to the opposite piston, now primed with a volume of solvent ready for delivery to the next section of the machine. Hence, dual acting positive displacement pumps eliminate the interruption in solvent output (by eliminating the down stroke). Figure 2 shows the recharge and output operation of the dual acting positive displacement pump. Due to their efficiency and continuous solvent delivery, and the fact that their design is very robust, they are the favored option for use in extraction equipment.

Figure 2

DIAPHRAGM PUMPS

Briefly, solvent only enters diaphragm pumps on their down stroke and is then delivered on their output stroke (Figure 3). Despite numerous variations on their designs, solvent delivery results from these pulses; thus, the system will experience an interruption in the flow of solvent at each down stroke as the pump is primed with a new volume of solvent for delivery. Furthermore, diaphragm pumps generally have smaller displacements (being that the pump strokes provide a lesser fluctuation in internal volume) and operate at higher frequencies (more cycles for the life of the operation) which results in increased wear and system pulsation. This style of pump is also known to be less robust, making it less reliable, which leads to potential increased downtime for maintenance and component failure.

Figure 3

Regardless of what pump is chosen, as the CO2 reaches the pump, it must either be as high-pressure gas or in a liquid state. As previously mentioned, only liquid and supercritical phases of CO2 have adequate solvent power to be used in extraction. It is important to note that if a high-pressure gas is delivered to the chamber, enough additional pressure must be built up within to produce a liquid or supercritical fluid. If the solvent is pumped as a liquid, no change of phase is required. However, an operator may wish to adjust the fluid temperature which would include potential selection of the supercritical phase, before the solvent reaches the extraction chamber.

PHASE AND EFFICIENCY

Importantly, the phase of the solvent as it is acted upon by a system’s solvent-delivery pump can affect the extraction machinery’s mechanical efficiency. Liquids are effectively non-compressible, meaning the force applied by the pump is used to efficiently deliver solvent to the system. Conversely, more work is required when applied to a volume of gas and this will be given off as thermal energy as the gas is compressed. This means, that when acting on a volume of gas, an amount of the output stroke’s energy is then converted to heat.

Delivering the solvent as a liquid incorporates further efficiency as the density (being the number of particles per unit volume) of gases, even under high pressure, is much lower than that of liquids. This means that two identical pumps, one primed with a volume of gaseous CO2, the other with an identical volume of liquid CO2, do not contain the same amount of solvent. The pump filled with the liquid CO2 contains more solvent molecules than the pump filled with gaseous CO2. This results in fewer pump strokes that are required to deliver a given amount of solvent when it is pumped as a liquid.

3. PHASE MANAGEMENT

Phase management is an optional stage during the extraction process. Temperature adjustments including those where a phase change is induced, can be made using a phase management system. To adjust the solvent temperature, the flow is directed through one or more coiled or folded solvent flow paths within heat-exchange bath(s) or vessel(s). These flow paths are designed to maximize the surface area and can be used to either increase or decrease solvent temperatures through the flow path piping.

From here CO2, either as a subcritical liquid or supercritical fluid, goes into the extraction chamber where the extraction process takes place, before following on to the separation stages. These stages will be covered in the ensuing two parts of this guided tour of a CO2 extraction system.

The Vitalis Difference - Phase Management_v2

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Vitalis Writer Publishes Third Article in 3 Part Series

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Vitalis writer Krista Kulczycki has just concluded her three-part series on the topic of yields.

The article, published Aug 22 on Cannabis Science & Technology, wraps up the set with a discussion on processing parameters, and how operating conditions, including extraction runtime and processing parameters, have a major influence on the yield obtained from an extraction. Access Part 3: Return Versus Effort and Associated Processing Parameters here.

Throughout the series, key concepts in extraction are examined. From pre-processing through to profitability, Krista goes into detail on the variables that can impact yields, providing a clear explanation on an industry topic that is often misunderstood.

To view the entire series, check out Part 1 and Part 2 on Cannabis Science & Technology, and look for more from Krista in the near future.

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Extraction Fact vs. Extraction Fiction

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CLAIMS OF TIME & RECOVERY

Extraction as an industry is growing fast, and there are a number of companies vying for market share and consumer attention. In the CO2 space alone, there are dozens of companies supplying equipment to the industry. In this space, it's natural to see organizations trying a number of different tactics to get ahead.

Unfortunately, in the course of competitive business, statements can be made that are inaccurate and/or false. One typical myth that has had its time in the spotlight is the subject of yields. This topic can arise when people try to make simple comparisons between different types of equipment, and it is used as a measure of efficiency. However, as has been covered numerous times (check out this article), the subject of yields can be confusing and even misleading.

There have been numerous instances where the question "what is the yield on this machine?" is followed up with a simple numerical response like, "30%". Without even questioning the starting material going into the system, this can be misleading. If one were to use starting material that is 5% cannabinoids into a system, getting 30% yield would mean that most of the output would be non-cannabinoid material.

While the topic of yields and the confusion surrounding it has been discussed for years, a new subject of interest has come to light - percent extraction efficiency, also referred to as recovery percentage . The percent extraction efficiency is a number calculated by measuring the difference in cannabinoid mass between the feedstock and the post-extraction raffinate. As a simplistic example, if 100g of a specific compound existed in a specific volume of plant material, and the extraction output was measured to have 97g, the percent extraction efficiency would be 97%.

Unfortunately, while this topic has started to gain traction, so too have some of the myths surrounding the process. For example, some are reporting that they're hearing statements about the recovery percentage of a particular system within a specific period of time. For arguments sake, let's use the example of a 95% recovery in a run-time of 2 hours. These results are fantastic, but are they even possible? Keep reading to find out.

THE SCIENCE OF EXTRACTION

CO2 extraction is a process that has as part of its foundation a few key scientific principles. The key factors in an extraction are temperature, pressure, time, and flowrate. Under a set of parameters (temperature and pressure) during a run of a specific duration (time) and based on the overall volume of solvent passing through the substrate (flowrate), an extraction will produce a quantity of crude oil.

For different compounds within the biomass, different temperature and pressure settings can increase or decrease their solubility within the solvent. As well, the more time the extraction is given to run, the more of that particular compound can be extracted (this article talks about the "declining curve" of recovery that is typically noticed). Finally, the amount of solvent that is flowing through the chamber can also increase the overall efficiency of the extraction.

None of these factors are magical. Rather, they are scientific principles upon which extraction is based. The end result of the extraction is similarly based on the science. Given a specific set of parameters, the laws of physics, the phenomenon of mass transfer and solubility, an extraction occurs.

THE EXTRACTION CURVE

This image represents the extraction curve, or better put, gives a graphical look at the amount of cannabinoids that can be pulled from the plant material over time. The familiar "declining curve" shows that in the first part of the extraction, the majority of cannabinoids are recovered. As the solvent continues to penetrate the biomass, components that are further from the surface of the material take longer to recover. Over the course of the run, the remaining desirables are pulled.

Given the laws of physics and the physical properties of solvent and biomass, this shows what happens when appropriate temperature and pressure parameters are set when targeting cannabinoids. These parameters are chosen as they are the most favorable for extraction of target compounds with as little co-extraction of non-desirable components like fats and waxes.

THE UN-TRUTH

Technically, 95% recovery in 2 hours is possible. This can be accomplished by drastically increasing temperature and pressure settings during the extraction. Unfortunately, the by-product of such a process is the complete extraction of both desirable and undesirable compounds. This leads to a situation where post-processing requires greater amounts of time, energy, equipment and resources. In this case, maintaining these numbers indefinitely is neither profitable nor sustainable.

When evaluating claims that are made across the industry, it is wise to get the actual details behind the statement. If a claim like our example is heard, then the discussion should focus on the how - how is it possible to reach those numbers, and what are the downsides that also result? Similarly, hearing wild claims about the yield of a particular extraction system should be met with queries regarding the biomass. What are the percentages of desirable compounds in that plant material, and how does that compare to the claim (remember, 30% yield from a 20% feedstock is nothing short of magical)?

As the industry gains momentum, we can anticipate more outrageous and fantastic claims. As in most situations, regardless of industry or transaction, critical thinking pays off. Like the saying goes, “if it sounds too good to be true, it probably is.” While some “claims” can technically be true, the realities may not be close to the desired outcome. Educate yourself, purchase wisely.

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INFOGRAPHIC: Payment Milestones and Services

What happens when you start working with Vitalis?

Supporting Your Business Success Right From the Start

Vitalis is the global leader in CO2 extraction solutions. Right from your initial deposit, a wealth of services and support are available to assist your company and pave the way for success. Check out the infographic to see all the amazing services that get unlocked at the start of our relationship!

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When Outfitting Your Lab, Choose CO2. Here’s Why:

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THE DIFFERENCES IN CANNABIS EXTRACTION TECHNOLOGIES

The cannabis industry today is comprised of three main extraction technologies; carbon dioxide (CO2), ethanol and hydrocarbons. Although these extraction methods are different, they all try to achieve the same objective of extracting valuable compounds from cannabis plant material. The main compounds targeted by these extraction systems are cannabinoids and terpenes, but each extraction method has its own respective advantages and disadvantages when extracting these compounds. Not only are the differences solely in how the compounds are extracted, but also extend to extraction safety, environmental impacts and costs. Having an understanding of these extraction methods is important when determining what cannabis extraction method to use. The characteristics that would be important for someone looking to purchase cannabis extraction equipment are discussed below for the three extraction methods mentioned.

CO2

CO2 in its liquid form can be used as an extraction solvent if its temperature and pressure are within the liquid phase range, or as a supercritical fluid if its temperature and pressure are above both 87.98 F and 1071 psi. It is an outstanding solvent for volatile compounds such as terpenes and, as a supercritical fluid, is good for cannabinoid extraction. The final separation of the solvent from the extract is achieved by a density drop that allows CO2 to evaporate from liquid or supercritical fluid to gas. The liquid cannabis oil that is left behind is free of any residual solvents.

Table 1: CO2 extraction system characteristics

Criteria CO2
Scalability Low to high
Infrastructure Required No significant infrastructure required
System Cost Medium to high
Product Options High; tuneability and terpene preservation allows for diverse product offering
Extraction Run Times Medium - long
Energy Usage Low to medium
Solvent Cost Very low
Tuneability Yes
Terpene Preservation Yes
Post Processing Winterization may or may not be required, depending on feedstock input and desired product formulation
Residual solvent in crude extract No residual solvent in extract
Pre-cool solvent No
Feedstock waste No residual solvent, general waste
Solvent Generally Recognized as Safe (GRAS) Yes
Safety High pressure
Solvent disposal Vent to atmosphere

The tuneability of CO2 and its ability to switch between a liquid and a supercritical fluid is a tremendous advantage for this process, and allows for a more diverse range of product offerings. Depending on the chosen parameters, extraction of undesirable compounds such as chlorophyll and lipids can be reduced, or a terpene pull can be completed using a subcritical run. As CO2 can extract at lower temperatures and pressures, subcritical parameters are good for targeting low molecular weight terpenes while leaving other components behind. Typically, with CO2 extraction, a post-processing step of winterization is required to remove undesirable compounds.

Another major advantage of using a CO2 extraction system is the relatively small infrastructure requirements. Unlike ethanol or hydrocarbon extractions that require a Class 1 Division 1 or 2 space, no specialized infrastructure is needed. This represents significant cost savings up front and helps mitigate the expense of the equipment.

CO2 extraction is the leader in safety in terms of residual solvent toxicity as well as environmental impacts relating to solvent disposal. Most extractors will reuse the CO2 or simply vent it to the atmosphere, saving on costly hazardous waste solvent disposal. CO2 is relatively inexpensive to restock, so even when levels need to be topped up, the costs are minimal. This is yet another area in which CO2 proves its affordability in the long run. With the savings on infrastructure, and the long-term costs of maintaining solvent stock, CO2 ends up being a more cost-effective process than the alternatives.

Ethanol

Ethanol extraction is best performed at temperatures below -40 °C, where the co-extraction of undesirables is minimized. However, cooling ethanol to these temperatures can require significant amounts of energy and time. Ethanol is a polar molecular, and this can create issues as it will readily mix with water and dissolve water soluble molecules such as chlorophyll. However, at temperatures below 40 °C this phenomenon is limited. During the extraction process, ethanol is passed over the cannabis material to dissolve the active compounds in the plant.

Table 2: Ethanol extraction systems characteristics

Criteria Ethanol
Scalability Low to medium
Infrastructure Required C1D2 or C1D1 space
System Cost Low to medium
Product Options Low to medium; poor terpene solubility means smaller product offering
Extraction Run Times Short to long, depending on solvent cooling duration
Energy Usage Low to high, depending on solvent cooling
Solvent Cost Medium to high
Tuneability No
Terpene Preservation No
Post Processing Winterization may or may not be required, depending on solvent cooling
Residual solvent in crude extract Solvent recovery required
Pre-cool solvent Below -40°C to minimize co-extraction of undesirables
Feedstock waste Residual solvent, hazardous waste
Solvent Generally Recognized as Safe (GRAS) Yes
Safety Flammable
Solvent disposal Hazardous waste

A major advantage of ethanol extraction systems is that they have a low cost of entry. However, due to ethanol’s flammability, infrastructure to support such an extraction system is more costly due to the requirements for hazardous locations (C1D1 or C1D2 – which means there is an ignitable concentration of flammable gas or vapour that has to be contained).

Terpenes have low solubility in ethanol which results in an oil that can lack flavour and aroma, and a reduced product offering for the extract. What ethanol excels at is cannabinoid extraction and it tends to have shorter extraction run times which is highly beneficial for throughput. The tuneability of the ethanol extraction method is very low and is primarily used to target cannabinoids. Ethanol, like CO2, is also generally recognized as safe (GRAS) for consumption by the FDA. But an important consideration is solvent recovery as residual solvent in the product could harm end users. Furthermore, ethanol waste is classified as hazardous, which in turn requires special handling and disposal.

Butane

Hydrocarbon extraction equipment typically uses butane, propane, or hexane as the extraction solvent (although most commonly butane). Cold butane is washed over the cannabis material, which slowly dissolves the cannabinoids and terpenes. As it is non-polar, it binds to the more fat-soluble components of the plant (cannabinoids, terpenes and lipids) and less so to chlorophyll and other plant metabolites. As it has a low boiling point (-0.5°C/31.3°F), very few temperature sensitive terpenes are lost when boiling off the residual solvent from the concentrate solution.

Table 3: Hydrocarbon extraction systems characteristics

Criteria Hydrocarbon
Scalability Low to medium
Infrastructure Required C1D1 space
System Cost Low to medium
Product Options Medium to high; terpene preservation and cold processing allows for diverse product offering
Extraction Run Times Medium
Energy Usage Low
Solvent Cost Low to medium
Tuneability No
Terpene Preservation Yes
Post Processing Winterization may or may not be required and desired product
Residual solvent in crude extract Solvent recovery required
Pre-cool solvent No
Feedstock waste Residual solvent, hazardous waste
Solvent Generally Recognized as Safe (GRAS) Yes (for butane)
Safety Pressurized and explosive
Solvent disposal Hazardous waste

Butane extraction is excellent for the extraction of cannabinoids and terpenes under the same conditions, and when done properly can produce a terpene-rich end product that closely resembles the starting plant material. This process tends to produce great tasting concentrates like shadder, budder, sauce and more.

However, butane and other hydrocarbons are highly flammable and volatile, which means there are strict regulations that surround butane extraction systems. Again, like ethanol extraction, a hazardous location space is required, and a solvent recovery step is needed following extraction. The spent butane is also classed as hazardous waste and appropriate environmental disposal is required.

While ethanol and butane extraction systems have their place in cannabis extraction, CO2 has proven itself to be one of the most adaptive and safe cannabis extraction methods. The CO2 extraction process is well known for its low up-front infrastructure cost, safe solvent use, scalability, and tunability. These factors, along with its long-term environmental sustainability, make CO2 an excellent choice for cannabis extraction.

High-Volume Extraction

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WHY YOUR CHOICE IS CO2

With harvest imminent, many businesses are examining extraction systems that have the capacity to process large volumes of biomass. When considering options to deal with these quantities, ethanol extraction tends to be top-of-mind. Ethanol is well known for its ability to perform extractions with short run-times, meaning more batches per day and more volume processed. However, with advances in technology and manufacturing practices, extraction using CO2 has become part of the high-volume conversation.

In the past, CO2 hasn't been a viable option due to the size of the systems available. Prior to the last two years, most CO2 extraction systems were limited to 40L or less. In those cases, to manage high-volume extraction, processors would require fleets of systems and the people to operate them. This could be inefficient and cost prohibitive.

As the industry has progressed, companies have started to manufacture larger, industrial-scale systems to meet the needs of extractors. Where the Vitalis Q-90 system was once considered massive in CO2 extraction, the R-400 series system has become the focus for many new customers. Working with OEMs like Vitalis, processors are also able to build custom, factory-scale systems to meet their needs. As technology and innovation moves forward, standard production systems with even greater capacity are on the drawing board, reducing the need for multi-unit deployments.

Here are a few more reasons why CO2 should be top-of-list when considering high-volume extraction.

CAPITAL EXPENDITURE VS OPERATING EXPENSE

CO2 extraction equipment has a reputation for being expensive. When looking at the initial capital expenditure, these systems tend to be higher on the cost scale than many other options, and that expense increases as higher capacities are required. Unfortunately, the true affordability of CO2 extraction can be missed if consideration is only given to equipment acquisition cost.

While ethanol extraction equipment can be relatively inexpensive compared to CO2 solutions, the ongoing costs to replenish solvent are substantial. As well as the expense necessary to keep solvent in stock, additional engineering bills - necessary to ensure facilities meet regulations for working with flammable and explosive substances - can drive the overall cost of ethanol extraction into the millions.

For high-volume processing requirements, the cost of solvent increases relative to capacity. The more biomass to be processed, the more solvent required. The cost-per-litre of ethanol is certainly higher than CO2, and this is a standard operating cost that is required for as long as extraction processing is to continue. CO2 equipment can be expensive to obtain, but ethanol is expensive forever.

CO2 is an inexpensive solvent to keep stocked, and extraction facilities typically require little to no specific engineering in order to pass safety inspection. At pennies-per-litre, the operating expense to keep CO2 stocked is far more affordable than ethanol alternatives. Despite the increase in solvent required to process large volumes, the minimal rise in cost is far easier for businesses to handle. When combining both capital expense and operating expense, CO2 is much more attractive from a dollars and cents investment perspective.

GMP

GMP (Good Manufacturing Practice) considerations can also increase the operating expense for ethanol extraction systems. GMP requires that substances that come into contact with the product do not alter the product quality. While the solvent power of ethanol makes it a great choice for extraction, it also makes it extremely difficult to avoid batch-to-batch contamination while re-using ethanol for multiple runs. Even with a wealth of costly post-processing equipment, recovered ethanol will typically contain residuals of the compounds extracted from the previous run. Further, validating ethanol as clean and free of contamination could be a large challenge.

To achieve GMP compliance, ethanol processors may have to replace the solvent for each extraction batch, adding hazardous waste disposal as an additional operating expense. Even in situations where solvent recovery and re-use is possible the operating expense is high. In the case of high-volume extractions, where the solvent would need to be replaced after each run, the costs necessary to meet GMP requirements would be astronomical and unfeasible for many companies.

SELECTIVITY

As well as cost considerations, using CO2 systems for high-volume extraction also provides one significant advantage: selectivity. The tuneability of CO2 as a solvent has made it a popular choice for processors wanting to make a wide variety of products. The ability of CO2 to extract specific target compounds based on the parameters of extraction is one of its most beneficial attributes. Using it for extractions of large quantities of biomass doesn't diminish this ability.

With the investment necessary for high-volume extractions - from cultivation and cost of biomass to equipment and facility purchases - a sudden shift in the market from one type of product to another can spell disaster for processors that can't adapt. With CO2, adapting to market changes can be as straightforward as changing the extraction parameters, and making minor changes to post-processing practices. Even without significant market changes, using CO2 provides the opportunity for processors to make a wider spectrum of end products and ensures overall business stability and longevity.

CO2 MAKES SENSE

Given the advantages CO2 brings to the extraction lab, using it for high-volume extractions makes sense. With the capacity of systems getting larger and larger, the ability to use it as a go-to process is getting more affordable and efficient for processors. As well, new markets in Europe, where GMP is the standard, forcing companies to examine CO2 as an option in order to gain access.

Where ethanol was once the method of choice, examination of the overall cost of operation reveals a process that can create financial challenges and risk to processing companies. Further, the challenge required of ethanol processes to feasibly meet GMP standards can see companies shut out of a burgeoning market entirely. CO2, having recently closed the gap on capacity, and being far more affordable in the long run, has become an attractive option for large volume operations. With the summer harvest season, the time is right to investigate all that CO2 extraction has to offer.

If you’d like more information or solutions to process large volumes of biomass, give our Accounts team a call. With high-capacity extraction systems, and end-to-end ancillary services available, the Vitalis team can help you maximize profits and efficiency in your extraction efforts.

Business Plan: How to Write a Business Plan for Your Extraction Business

Business Planning

Not that long ago, if you wanted to partake, you had to know a guy that knew a guy.

You really could only smoke marijuana and if you did, people didn't look very favorably upon you. The comparisons to Sean Penn's Spicoli (Fast Times at Ridgemont High) and Matthew McMatthew McConaughey's Wooderson (Dazed and Confused) were the norm.

We've evolved a great deal over the last two decades. Recreational marijuana is now legal in nine states and Washington D.C. Twenty-one more states have medical marijuana laws on the books. And, as such, the industry is booming. Wall Street's even getting in on the cannabis craze. What most people don't realize is that it's not all about smoking marijuana. The sale of concentrate is on the rise, holding about 50% of the legal market in some states. It's only expected to get bigger.

So, if you've decided that starting your own cannabis extraction company is a good idea, you're right! But, you need a cannabis business plan to get it off the ground.
Not sure how to write one? We've got you covered. Check out our guide on how to write a cannabis business plan below.

Why You Need a Cannabis Business Plan

You may not think you need a cannabis business plan. After all, you're just buying some pumps and setting them up, right? What else do you need?

Well, it turns out you need a lot more than that. Have you considered the differences between Co2 extraction vs. butane? Where are you setting up shop? How will you fund your business?

A business plan will get you moving in the right direction. If you do it right, it will keep you headed in the right direction after you've gotten off the ground. Here's what you need it to include.

1. Executive Summary

Every business plan, regardless of industry, starts out with an executive summary. This says who you are and what you do. This should be the easy part. You have a cannabis extraction business which means you use CO2 or another form to extract CBD oil from cannabis plants.

You should also include what makes you and your company special. If you're trying to secure funding, you should include that in the executive summary as well. If you do, make sure you know the specific amount you need and where you'll spend it.

Keep this in mind: If you're applying for any kind of loan in the US, it won't be an SBA loan. The Small Business Association added a revision in April 2018 stating they won't back loans given to marijuana businesses. Remember, the US federal government still says marijuana is illegal.

The executive summary is very important to lenders or investors. This gives them the best idea of who you are and what you're about. If they're not impressed, they likely won't keep reading your business plan. This doesn't mean to write your entire plan in this section. Keep it to one page and be as clear and concise as possible, while still being intriguing at the same time.

2. Target Market

It's very important that you know your market. This means that you've thought about being local vs. national and have the market analysis to back you up. We have a great infographic on knowing your market that you can see here. It breaks down all the confusing numbers and what they mean. You can use ours as a guide of the info you should have in yours.

You should also include the size of your market and any specific factors that affect it. For example, if you live in a medical marijuana state, you can include any regulations in the industry. You can even explain how weather affects harvesting in certain seasons.

3. Organization and Management

This is one of the easier sections to complete. In organizational and management, you're going to describe your business's structure. This will list you as the owner/proprietor. You'll also list the type of business you are like LLC, S-Corp, sole-proprietorship, partnership, etc.

List all members of management and why they're qualified to be in those positions. If you have anyone on your team specifically qualified to work in this business, like a chemist or master grower with a PhD you want to list them as well. This gives the investors or lenders an idea that your company is structurally sound and run by the right people.

4. Products and/or Services

This is the easiest part of your business plan. What are you selling? You can also add if you'll grow your own plants or buy it from a wholesaler.

5. Marketing

Describe your marketing strategy using industry examples. In other words, if you're starting a website and will have a blog, are you hiring a local SEO company to help you? Will you be using social media or pop-ups to spread the word? Are you planning on attending trade shows?

Anything you can think of that you'd like to use to market your business, you should include in this section. Make sure you include both offline and online strategies. While you may be tech-savvy, your investor may not be.

6. Growth

In this area, you're going to lay out your growth plan. This could include branches or satellites in other states or other markets you eventually want to move into. Think of the growth section as a combination of your business's potential and your own goals.

If you don't plan on moving into another market, that's fine too. But you should at least have some aspirations of expansion or growth.

7. Budget and Financial Projections

This isn't always the fun part, but it's vital to your plan. The final section needs to describe your pricing structure.

If you're a startup, you won't have enough to show any profitability yet. But you will be able to refer back to your market analysis. This section should also explain in detail your expenses. This is everything from salary to shipping costs. If you have any equipment loans or other loans that get repaid, you must include them. You need to include your monthly rent or lease payments as well as utility costs. Insurance, certifications, licensing -- anything that's an expense must get included.

It's not an absolute must to include your operating budget, but it's a really good idea to do it. The investor or lender will see how you plan on spending their money. It will also help you stay on track, too.

What's Next?

Now that you know exactly how to write a cannabis business plan, you need to get off the ground the right way!

We can help.

If you haven't considered the equipment or system you'll use, you need to see what Vitalis Extraction Technology offers.

We're an award-winning company that specializes in extraction equipment. Our friendly staff is waiting to answer your questions and get you started in the right direction. So, contact us today!