Cannabis Extraction – Four Companies to Consider
A report last year from BDS Analytics and Arcview Market Research showed that cannabis concentrate sales were far greater than both flower and edibles within legal markets in the United States. This market segment is booming and doesn’t show a sign of slowing down anytime soon. Concentrate sales have been estimated to reach $8 billion by 2022.
Of the three major segments of the cannabis market (flower, concentrates, edible) concentrates have become the fastest growing. The category includes vaporizers which are extremely popular as they are beginner-friendly and easy to use. In 2017 vaporizers made up over half of total concentrate sales in the United States. It is projected that vaporizers will reach $6.5 billion in sales in the U.S. in 2022. Concentrates can also offer licensed producers lowered production costs and higher profits. Extracting cannabis to produce concentrates saves processing costs by removing the trimming, manicuring and curing process. Here are four companies in the cannabis extraction business to consider for your portfolio.
Radient Technologies Inc. (TSXV:RTI)
Edmonton, Canada-based Radient Technologies provides industrial-scale extraction services. The extraction method is called Microwave Assisted Processing and the technology is patented. Radient management believes their patented method of extraction produces a cleaner and higher yielding product than traditional processes do. In February of this year Radient received licencing from Health Canada allowing it to sell extracted cannabis. The company has an extraction capacity of 56,000 kilograms per year with its Microwave Assisted Processing method. Radient Technologies Inc has a market capitalization of $284 million.
Valens GroWorks Corporation (CSE:VGW)
Valens GroWorks Corp. has specialized extraction, distillation, cannabinoid isolation and purification methods. Valens, with a market capitalization of $295 million, has signed extraction agreements with multiple licensed producers in Canada. The company has agreements with Tilray, The Green Organic Dutchman, Organigram and Canopy Growth Corporation. Valens has a deal to make extracts with Tilray for a minimum of 15,000 kilograms of cannabis per year over multiple years. If you think that’s a lot get a load of this: the company’s extraction agreement with The Green Organic Dutchman is to process a minimum of 30,000 kg of cannabis in the first year, and 50,000 kg in the second year. The company uses CO2 and Ethanol as methods of extraction.The biomass of the extraction capacity of Valens GroWorks Corp. is 240,000 kilograms per year.
NextLeaf Solutions (CSE:OILS)
Vancouver-based NextLeaf Solutions is a cannabis extraction company that specializes in a proprietary ethanol-based technology for the extraction of cannabis for medical and recreational markets. The company is in early stages. It has completed a reverse takeover financing of $5 million which will be used to build a processing facility located in Coquitlam, B.C. NextLeaf believes its facility will have a production capacity to extract from 100,000 kilograms of dried cannabis annually. The company has a market capitalization of approximately $41 million.
MediPharm Labs Corporation (TSXV:LABS)
Barrie-based MediPharm Labs has a top of the line extraction facility. They operate an ISO-9000-rated laboratory clean room located in Barrie, Ontario. MediPharm has signed multiple multi-year extraction agreements with large licensed producers of cannabis like Canopy Growth Corp., Supreme and Up Cannabis. The company is also expanding its operations and is developing an extraction facility in Australia which is expected to be completed later this year. The company has a yearly extraction capacity of 150,000 kilograms.
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