Day 13: How its fish-oil roots could give Neptune an edge in cannabis extraction

Not a lot of people are using cold ethanol when processing cannabis into extracts, according to Étienne Villeneuve.

“It is because of the explosion-proof requirements,” Mr. Villeneuve, head of operations and technical services for Neptune Wellness Solutions, explained during a tour of the company’s 50,000 square foot facility in Sherbrooke, Quebec. “The cameras, the access controls, they all need to be explosion-proof and those are ten times the cost.”

Neptune installed those systems after an explosion in 2012 killed two employees, injured another 19 and nearly destroyed the entire facility. Shortly after that deadly incident, Neptune decided to transition its business from extracting omega 3 oils from krill to extracting cannabinoids from cannabis plants.

The company put the US$34-million it made selling its fish oil client list to Aker BioMarine in August, 2017, toward the $70-million it has spent on renovations.

Using cold ethanal means “we can skip the winterization process when we do that so it is a faster process than with CO2,” Mr. Villeneuve said. “With CO2 we need to take the crude extract, mix it with ethanol, put it in a cooler and leave it overnight so it goes like a candle where the waxes turn into solids and separate from the liquids, which are cannabinoids, then can be filtered out.”

“Scientifically the way [our process] makes sense is because we are leaving the waxes and lipids in the biomass,” Mr. Villeneuve said. “We leave it in the biomass rather than extracting it and then trying to remove it afterwards.”

Another advantage Neptune claims to have over its competitors is a cold storage room once used to keep frozen krill from melting before being processing that can hold thousands of kilograms of dried flower at temperatures as low as -25C.

“You can store plants here and they aren’t going to lose their terpenes or their active ingredients,” said Martin Landry, Neptune’s chief corporate development officer, who was also present for the tour. “That is something that none of our competitors have and it is a legacy of our old operation. That is a big differentiator for us.”

Perhaps the most substantial advantage Neptune has is the former krill processing operation itself. Right now the company has a C02-based extraction system capable of processing roughly 30,000 kilograms of dried flower annually and is in the process of ramping up its cold ethanol-based system to its capacity of 170,000 kg per year.

Once modifications are completed to the krill extraction system sometime during the first half of 2020, Mr. Villeneuve said that system alone should be able to process as much as 1.3 million kilograms of biomatter per year, bringing Neptune’s total annual processing capacity to 1.5 million kilos.

For comparison, consider rival cannabis extractor Valens Groworks’ own expansion plans. The Kelowna, B.C.-based company is in the process of doubling its own capacity from 500,000kg a year to 1 million.

“What we have in mind today because of the scale, although we are open to both, is for this [1.3M kg/yr] phase to be dedicated to hemp because of the size of the CBD market,” said Mr. Villeneuve. “Hemp also comes in big bags, super sacks, they’re called. And not in blocks. Or in barrels, as with cannabis.”

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