Terpenes give extracts their taste or smell. They are also the highest value components in cannabis, and they represent a significant opportunity for growers and extractors.
Terpenes are the first thing to degrade in cannabis and hemp when exposed to air or to high heat in most extraction processes, since they can begin to boil away in temperatures as low as 70 degrees Fahrenheit. If you can smell cannabis or a concentrate, then your terps are boiling off into the air, just like when you cut into a lemon and get hit with a waft of the popular terpene limonene.
Terpenes also have incredible value. Where CBD concentrate prices dove from $6,000 a kilo to $250 almost overnight, and THC concentrates can drop from $7,000 per liter in a new market to below $2,000 in more mature recreational markets, terpenes have held their value over time, and, in the case of cannabis-derived terps, have even increased in price.
Hemp terpenes, particularly from older dried material, are simply not as good, nor do they smell the same as terpenes cut from high-quality, fresh, THC cannabis. Moderate grade terps from hemp and old cannabis are hovering in the $4,000 to $5,000 range. Higher quality cannabis-derived terpenes from fresh biomass can fetch as much as $15,000 to $20,000 per liter. If they are certified as natural, strain-specific and THC-free, smaller volumes can fetch as much as $40 a milliliter, or $40,000 a liter. These high prices have created a market for synthetically derived terpenes, and terpenes derived from other plants, neither of which are as desirable. Some states like Connecticut require by law that only cannabis-derived amendments be used.
Part of what fuels demand for terpenes has to do with the Vitamin E oil issues that caused tragic news stories a couple of years ago. Because a liter of Vitamin-E acetate sold for around $35, it made for a cheap “cut” in vape cartridges, particularly in the unregulated market, used to decrease viscosity so they flow and vaporize easily, but it also made people very sick, and a few even died. Vitamin E acetate has no significant flavor or scent either, so processors added flavors like grape or bubble gum to mask the blandness, just as they did with nicotine cartridges. State regulators now demand safer cannabis vape products, and cannabis consumers started to demand their cannabis vape-carts taste like cannabis — not bubble gum.
Herein lies the two key elements that have allowed terpenes to maintain their value as THC and CBD concentrate prices fell off a cliff. For starters, they are found in much lower concentrations, tending to be around 1% of dry biomass, and they’re also difficult to capture efficiently.
For centuries terpenes have traditionally been captured using steam or hydro-distillation, and they still are in the essential oil industry processing plants for lavender and mint; however, this creates an inherent problem in the cannabis world. Steam means the process uses water, and if you have to take the terpenes out first, the watered-down biomass referred to as mash is essentially useless. If you extract from lavender, this isn’t a problem, but when you’re trying to extract valuable cannabinoids out as well, it’s simply not practical, especially when most extraction solvents favor dry biomass. It’s often best to take terpenes out of the concentrate in those cases.
“Every solvent, including steam, carries a distinct aroma in the resulting extract. As the industry matures, processors will begin to pair terpene classes with the solvent that best expresses the aroma. This degree of specialization is common in the wine industry, with regions popularizing not only variety but the process as well,” said Shareef El-Sissi, CEO of Terpene Belt Farms.
Companies like Terpene Belt handle fresh flower in a way that preserves the most volatile and aromatic compounds.
Terpenes can be taken out using a range of solvents, including ethanol and CO2, which has become a preferred method for many cannabis extractors. With CO2, which can do fractional extraction, the terps can be pulled out of the dry biomass in the first pass, followed by a cannabinoid extraction — but it’s not the most time or energy efficient process, since that can take a few passes over days to get everything out. Moreover, the CO2-extracted cannabinoid oil needs extensive post-processing. The terpenes from CO2 extractions tend to be a lower grade too, since some of the more subtle “notes” or scents don’t always make it through the process.
New technologies being applied to fraction out this high-value commodity are now being employed. The options include microwave distillation and selective condenser systems in wiped film evaporators. Freeze drying systems are also being used with varying degrees of success. There’s even a system that uses hot nitrogen gas. All produce fairly high quality terpenes with a good “nose’’ as they say in the industry. In simple terms, they smell good. More importantly, they taste good when vaped or dabbed, and can even enhance the high one gets. The downside is these two systems can be expensive to buy and expensive power-wise to operate, but the real challenge is that most tend to have low output volumes. If you want to run 50 or more pounds of cannabis an hour, they are generally not as cost effective as the true workhorse in the cannabis extraction world.
Using hydrocarbons, and in particular, instrument grade propane, is the most efficient way to extract terpenes intact, along with all the cannabinoids. This process, which is also a form of fractional extraction, is infinitely more cost effective because in one 45-minute pass you can get all the terpenes and all the cannabinoids. The quality is unsurpassed as well, but even hydrocarbons have a downside. The processor then needs to take the terpenes out of the cannabinoid oil, which is typically done by distillation, only now you’re introducing heat and pressure, which will degrade things. Not to mention, large scale distillation systems don’t come cheap.
New technologies may have an answer for this problem. Membrane systems are a small fraction of the cost of distillation rigs, and while they are first being deployed for the removal of waxes and color bodies from oil, some membranes can also separate terpenes out of concentrate. They do so at near-ambient temperature, so they capture all the high notes steam-extracted terpenes are famous for while maintaining all the nuance of sauce. Assuming one is using an efficient extractor that runs 20 to 50 pounds every hour, the costs are extremely low, and the quality is very high. The one thing to watch out for with this method is getting cannabinoids in your terps. If you plan to blend them back into cannabis products within a state traceability system, this isn’t a problem, but if you want to export them across state lines, or internationally, you have to go THC-free.
At the end of the day, there is no question it pays to harvest the highest quality terps for the simple reason they are worth 5-10 times more than the cannabinoids themselves. After all, high quality terpenes are required for making the highest end products on the shelf: diamonds and sauce. In markets where the average BHO goes for $20 a gram, diamonds and sauce can go for $60 to over $100 a gram. For reference, pure gold is at about $60 a gram right now. It’s important to note that terpenes are best removed from the crude concentrate before growing the purified crystals that make up pure THC-A diamonds. While the crystallization process can fraction out terps, it’s generally much more cost and time effective to remove them first, which also helps when infusing them into vape-carts of distillate.
In the cannabis world, it’s well known that prices will compress in maturing markets, and processors are constantly forced to identify products that are the most profitable to manufacture. Right now, terpenes are at the apex of the profit spectrum, and we are betting high-tech membrane systems will win the efficiency race to isolate them intact.
Steven Fuhr is the director of business development for SciPhy Systems. He can be reached at SteveFuhr@SciPhySystems.com.