How do extraction companies make a profit???

kabones · Oct 16, 2016

I have been trying to do the math in my head and cant seem to figure out how all these extraction companies are making money.

In British Columbia, Canada.... a lb of nice cannabis goes for about 1800-1900. High end exotics 2000-2200.

Lets use the high ends for example...

you pay 2100 for a lb of exotics, assuming you get a 20% return in extracts, that is 3.2 ounces of shatter you will get.

Right off the top, they have to charge $656/ounce just to break even. Not including packaging, labor costs, equipment and whatever else.

Assuming they can get $900/ounce at a dispensary, that works out to $750 profit off the pound, not including and added costs.

That is all assuming you even get 20% in extracts......

DoubleTripleOG · Oct 16, 2016

I would venture a guess that the extract companies that are successful, are growing their own material to blast. When your cost per gram to produce flowers is low, the profit margin your used to should still be intact or close to what it is selling the flowers.

A pound of flowers goes for $2000. At 15% yield that's 67.2 grams of oil. $30 a gram makes $2016. So even at 15% yield, gross profit is still more than the lb. would go for. At 20% yield it would be 89.6 grams of oil. At $30 a gram, that's $2688.00.

So actually make more than you would selling the flowers. Now take the $2000 for a pound out of the equation. Say it costs $200 to produce a pound. Even selling the oil at $20 a gram still more than doubles the investment.

That's making the oil with buds. Just imagine the profit margin when high quality trim is used. Something that normally has no monetary value, or would get thrown out. The only cost is the butane, and time.

deadkndys · Oct 16, 2016

Worth pointing out most solvents get reused as well.

live resin · Oct 16, 2016

Grow it and extract it yourself if you're wanting profits. Untrimmed deps or full sun # costs me less than 300 to produce. If buying trim I pay 50-150 depending on quality. I sell the wax/live resin for $10/g

Roji · Oct 16, 2016

montroller · Oct 16, 2016

Alternatively you can just charge for your services and let your clients deal with supply and distribution. Processing costs can be greatly reduced with proper equipment and techniques.

delta9nxs · Oct 16, 2016

most are doing all of the following;

growing their own for extraction, buying trim for extraction, and running others trim for extraction on both a fee basis and a split basis.

killa12345 · Oct 16, 2016

delta9nxs said:
most are doing all of the following;

growing their own for extraction, buying trim for extraction, and running others trim for extraction on both a fee basis and a split basis.

Thats exactly what i do..... I run my own trim and b grade nugs....i buy others for like what others said 50-150 a #, and i run other people for a 50% cut of final product.

OP....its a lot more profitable when you run your own trim and run for a percent. I hate buying 100 #'s to run them and only get shit oil.

But i can run 5#'s a day and running cost are only $80-90 a day.....I can buy 5#'s of trim for $500....and @ 15% produce 3/4 of a # in oil. So i get 12oz for $600 and 6 hours of labor. even at 400 a oz thats a 4200 profit.

LostTribe · Oct 17, 2016

kabones said:
I have been trying to do the math in my head and cant seem to figure out how all these extraction companies are making money.

In British Columbia, Canada.... a lb of nice cannabis goes for about 1800-1900. High end exotics 2000-2200.

Lets use the high ends for example...

you pay 2100 for a lb of exotics, assuming you get a 20% return in extracts, that is 3.2 ounces of shatter you will get.

Right off the top, they have to charge $656/ounce just to break even. Not including packaging, labor costs, equipment and whatever else.

Assuming they can get $900/ounce at a dispensary, that works out to $750 profit off the pound, not including and added costs.

That is all assuming you even get 20% in extracts......

they get an MBA!

gdbud · Oct 17, 2016

I have heard that you can run moldy weed through the extraction process and it will kill the mold spores, So around here a lot of the moldy weed is sold off to the producers to make oil with. Then its sold in the Recreational weed market.

Gray Wolf · Oct 17, 2016

gdbud said:
I have heard that you can run moldy weed through the extraction process and it will kill the mold spores, So around here a lot of the moldy weed is sold off to the producers to make oil with. Then its sold in the Recreational weed market.

Yeah, I know of someone doing that with medical concentrates for cancer patients, some with compromised immune systems.

Not a safe practice because some molds produce aflatoxins that are extracted along with the oleoresins.

A little aflatoxin/neurotoxin, can go a long way, up to and including death.

Just the spores and fillaments of even non toxic molds can induce Anaphylaxis in some brothers and sisters.

The aroma and flavor of even non toxic molds can also carry through, and in keeping with the immortal words of Crocodile Dundee, " It tastes like shit, but you can live on it."

Some non-toxic molded material is salvageable. Check:

https://skunkpharmresearch.com/salvaging-moldy-material-2/

Please spread the word to the ignorant folks you know using moldy material indiscriminately.

Ignorance is no sin, but morality aside, I've come to believe that continuing to perform unsafe acts at the expense of others once enlightened, is knowingly disrupting the harmony of the universe, and inciting the elements of the universe to rise against you.

blastfrompast · Oct 17, 2016

Step 1....grow your own cannabis
step 2....Find a strain that hits 25-32%
step 3... stop all fine trimming.....knock off the fans, and do a quick once over....hang to dry...

step4...extract

Steps 1 and 2 are key, #3 cuts down on your cost per lb, and speeds up your cycles....

works out to around $3350/lb before cost to grow and extract.

If your people want a different flavor, take a hint from the wine industry and mix in a nice fruity blueberry that only hits 18% but will change the flavor of the dabs when added at 30% mix during extraction.

I run a Fuelly strain, a fruity strain, and a sour..... I also have access to numerous kush crosses should the people want the same as everyone else is slinging...easier to just get material for blends than to grow them tho...

I also have a friend who only charges 15% extraction rate on nug runs(2lb min) so when i have too much material it goes off to her and her CLS and big ass oven... 40% for trim runs.

Everything helps the bottom line.

As for those buying lbs at 2-2400 a lb.....that can be a crapshoot....get a bad run, or poor yield and you can end up eating ur shirt.

z-ro · Oct 17, 2016

If you look at a company like BAMF or Gold Coast extracts that retails for 80-100/gram its easy to see the profit even if buying lbs at 2400 for highest grade OG etc. 454x.2=90grams. 90gx$50(wholesale)=4500$. almost doubling their money on purchased product, on growing their own theyre straight killing it with no trim costs running it all as live resin.

other companies under the legal paradigm, are 'buying' all of a producers material for 1$ and sell them back the hash at x$'s per gram.

delta9nxs · Oct 17, 2016

Gray Wolf said:
Yeah, I know of someone doing that with medical concentrates for cancer patients, some with compromised immune systems.

Not a safe practice because some molds produce aflatoxins that are extracted along with the oleoresins.

A little aflatoxin/neurotoxin, can go a long way, up to and including death.

Just the spores and fillaments of even non toxic molds can induce Anaphylaxis in some brothers and sisters.

The aroma and flavor of even non toxic molds can also carry through, and in keeping with the immortal words of Crocodile Dundee, " It tastes like shit, but you can live on it."

Some non-toxic molded material is salvageable. Check:

https://skunkpharmresearch.com/salvaging-moldy-material-2/

Please spread the word to the ignorant folks you know using moldy material indiscriminately.

Ignorance is no sin, but morality aside, I've come to believe that continuing to perform unsafe acts at the expense of others once enlightened, is knowingly disrupting the harmony of the universe, and inciting the elements of the universe to rise against you.

yep, i've had a liver transplant and take immunosuppressants for life. moldy weed should be thrown away.

kabones · Oct 18, 2016

Wow, Thanks alot for the responses ladies and gents.

Slipnot · Oct 18, 2016

I think there are many ways they make profit for instance adding oils n waxes in the product or more or less washing it back perhaps ??? meaning adding weight to it
for instance Vape 1 gram of pure oil mixed with glycerines adds up to 5 grams or close to it pending strength ..

so like above posted they grow there own harvest couple hundred pounds sell pounds to customers for 1800 in turn customer gives them half pound to make product usually another lump sum or percentage of end product there now you sold that pound to them and made product back from that half pound they gave you and you still end up with liquid rich THC to re wash or apply to another by product etc

i used to make hash from my trim and being so powerful i strted adding more regular leaf from trim not bud trim it increased my weight per hash lowered THC levels to perfect smoking levels @ 20 bucks a gram win win

before 1/2 pound of stupid potent hash mixed with more leaf gave me 3/4 pound of perfect hash everyone was happy its a win win

AS IF · Oct 18, 2016

Interesting post, I often wonder the same thing. I just heard today for the 3rd time of the practice called "rinsing". Large extractors in BC running nugs and then selling said nugs to a "have not" province. The one popular company I heard of doing this makes sense now that I look at their Instagram posts..... Otherwise why would you bother with all of that work, danger and legalities. I have never heard of this before and don't want to think it's true but 3 different unrelated stories?

Does this happen in the US?

Shame on those that practice this!

killa12345 · Oct 18, 2016

AS IF said:
Interesting post, I often wonder the same thing. I just heard today for the 3rd time of the practice called "rinsing". Large extractors in BC running nugs and then selling said nugs to a "have not" province. The one popular company I heard of doing this makes sense now that I look at their Instagram posts..... Otherwise why would you bother with all of that work, danger and legalities. I have never heard of this before and don't want to think it's true but 3 different unrelated stories?

Does this happen in the US?

Shame on those that practice this!

Its really easy to tell if nugs have been rinsed. There is like a powder in the bag when its rinsed. When you open the bag it almost burns your nose when you smell it because of all the fine particles

Yes this happens in the US. Its a disgusting practice. When i read about soak times....really the only thing that comes to mind is that extractor is trying to soak buds for later sale as all my best oil come from a straight pass thru method with very little affect of yields.

I think this is much more prevalent in the west. I think washed weed is done in the west and sent out to places people dont know better.

Gray Wolf · Oct 18, 2016

blastfrompast;As for those buying lbs at 2-2400 a lb.....that can be a crapshoot....get a bad run said:
A reliable mold and pesticide free source of high quality material appears to have been the Achilles heel of the extraction market here.

If you don't grow your own, quality control becomes an issue, and you not only end up tossing out contaminated extracts after all the work (hopefully??), but contaminate the closed loop system, so that it contaminates subsequent batches.

I've also watched extractor's excitement soar and wane, first when they got a batch of primo material from a new supplier, and waning on the second or third batch, as the harvest ages.

Gray Wolf · Oct 18, 2016

killa12345 said:
Its really easy to tell if nugs have been rinsed. There is like a powder in the bag when its rinsed. When you open the bag it almost burns your nose when you smell it because of all the fine particles

Yes this happens in the US. Its a disgusting practice. When i read about soak times....really the only thing that comes to mind is that extractor is trying to soak buds for later sale as all my best oil come from a straight pass thru method with very little affect of yields.

I think this is much more prevalent in the west. I think washed weed is done in the west and sent out to places people dont know better.

More common in our area, is material that has been pre-kifed.

We used to get a lot of it donated to the SPR cancer program.

How do extraction companies make a profit???

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