Article

WHAT MAKES CBD EXPENSIVE?

June 26, 2019

 

Based on our calculations, the price of CBD per milligram is $.15. A standard 30-milliliter tincture contains 500 milligrams of CBD costs  $75.00, not including tax and possibly shipping for online shoppers. The excessive pricing has caused suppliers to offer inferior CBD products that are incorrectly labeled, impure, or even unsafe rather than lab tested high-quality CBD.  Remember: Read the label and make sure the lab tested declaration is including. 


Now to answer the question - WHAT MAKES CBD EXPENSIVE?
 
EXPENSES BEGIN BEFORE THE FIRST HEMP SEED  IS PLANTED: The first set of costs are the land and farming and cultivation costs such as; seeds, labor, cultivation equipment, state, city, and county licenses, etc. With regards to farming hemp (and marijuana), there are additional reporting and testing costs over other agriculture due to the nature of what’s being planted and each state has their own set of requirements and costs. These costs can be as low as $25 in Vermont and as high as $500-$1000 depending on whether the license is for a grower or hander, plus a $5.00 per acre fee.  Some states also have specific licenses or certification programs for hemp seed distributors and producers. Review Folder 105-GROW, which present each state’s hemp statutes. Free  Folder upon request.


THE HIGH COST OF HARVESTING AND EXTRACTION: Once the hemp plants reach maturity it’s time to harvest them. Accordingly to our Subjective Probability +Game Theory Model (SP+GTM), the cost to harvest an acre of hemp runs  between $300 to $600 per acre, substantially lower  from 2017 when the cost averaged between $970 to $2,500 per acre. Once the harvest is complete, the hemp plant stem requires various components separated with a machine called a decorticator --- the  machine is a  $2 million investment. After decortication, the next step is  to extract the cannabinoids, terpenes, flavonoids, etc. from the plant. The two most popular methods of extractions are through a Supercritical CO2 extraction or an ethanol extraction with CO2 extraction becoming the standard. A  CO2 extraction machine can cost around $135,000 to $150,000 plus $20,000 to $35,000 for a rotary evaporator and centrifuge. Indeed, the 
the machine costs are in addition to the buildings, infrastructure, labor, and the raw materials for those not growing their own.


FROM EXTRACTION TO PACKAGING: Once the cannabinoids, terpenes, and other plant materials are extracted from the cannabis or hemp plant, there are still a number of steps needed before the CBD reaches store shelves. What is initially extracted is a cannabis concentrate that has contains acids that need to be decarboxylated. The cost for a decarboxylation oven cost around $5,000 to $7,000 for ovens that have a capacity of 10 cubic feet and can go up to 38 cubic feet. After the concentrate is decarboxylated, what’s left is full spectrum cannabinoid oil. Full of all the cannabis plants cannabinoids, including CBD, terpenes, and the plants chlorophyll, lipids and waxes. To remove the plant properties, the CBD concentrate will first be winterized to isolate and remove the unwanted compounds, followed by distillation to further ‘clean’ the oil. If THC is being removed, the distilled concentrate will then go through a chromatography machine. Cost for the equipment to perform these functions can grow to the hundreds of thousands plus the labor to run them.


THIRD-PARTY LAB TESTING IS VITAL, BUT ADDS TO THE COST OF CBD: Once complete, the finished product now needs to be tested to prove product purity and concentration. There are a variety of tests available. Following are a list of services by a well known testing facility in various states - Review Folder 238-6, which presents each states' major testing facilities. Free  Folder upon request.

 

Average Testing Services Costs:
•    10 cannabinoids ($50/bottle)
•    Mold and fungus screening ($25/bottle)
•    19 Residual Solvents ($35/bottle)
•    41 Terpenes ($40/bottle)
•    Moisture Content ($15/bottle)
•    4 Microbial Analyses ($40/each count)
•    Custom Services


After testing, the CBD concentrates are bottled, packaged and prepared for delivery to  distributors to sell.

 

 

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