Cannabis concentrates have grown in popularity because of the wide variety of uses they have. Legally produced concentrates are sold for direct consumption in small containers and are odorless when sealed. The market is booming more so, however, because cannabis concentrates are used to make edibles, topical ointments, capsules and other packaged products that require a more professional extraction.

When concentrates are purchased for direct consumption, they are named for the different consistencies created by the extraction. These waxes, oils and shatters are formulated for use in portable vaporizers and elaborate vaporizing rigs.

Some extract concentrates have tested as high as 80 percent in THC, the psychoactive compound found in cannabis. That is significantly higher than the THC content found in flower form of the strongest strains, which typically tests in the mid to high 20s.

From a business perspective, the profit margins can be huge, in some cases up to 60%. And demand for cannabis oil in Canada’s medical marijuana market is so high that suppliers report a shortage and are having a difficult time establishing a regular supply of cannabis oils.

Until a court ruling intervened, Canada’s licensed medical cannabis producers were able to sell only dried or fresh cannabis flowers. That changed in 2015, when licensed medical cannabis producers were legally permitted to begin producing and selling cannabis extracts. However, the sales of cannabis extras remain limited: Cannabis extracts must be in liquid form only, and they have a THC potency cap of 30 mg per ml. That means the laws prohibit the vaporization products that have been extremely popular — and fueled strong growth in recent quarters — in the U.S. cannabis market.

Q3 2016 2420 kg
Q4 2016 4109 kg
Q1 2017 5673 kg
Q2 2017 6194 kg

Despite their limited forms and supply, Health Canada’s most recent data showed that the sales of cannabis extracts grew 300 percent in the second quarter 2017 since September 2016. That compares to an 89 percent increase in growth of dried cannabis during the same period. Within the same timeframe, the number of Canadians eligible to purchase medical cannabis grew by 233 percent, to 201,398.

In all, only 21 total companies are licensed to produce cannabis extract. Registered producers and/or sellers of cannabis oils include Aphria; Aurora Cannabis; Broken Coast Cannabis; Canna Farms, CanniMed; CannTrust; Canopy Growth, which holds five licenses, including three for Mettrum, one for Tweed and one for Bedrocan Canada; Emblem; Emerald Health; Hydropothecary; Maricann; MedReleaf; Organigram; Peace Naturals; THC BioMed; Tilray; WeedMD; and Whistler Medical Marijuana.

If you intend to produce edibles and topicals with In-House Processing or Purchase Extracts From Third Parties Or Combination you could be interested in our Cannabis Infused Products Manufacturer Financial Model.

If you intend to start a Cannabis Processing business you can find our Cannabis Extraction/Concentrates Business Plan Template.