April 02, 2019

A Fundamental Shift in Extraction Mentality

With the recent launch of the Mile High Monster, Mile High Labs is seeking to bridge the gap between rising consumer demand for CBD oil and the lagging supply.



According to the latest predictions by Brightfield Group, the industry is expected to reach $22 billion annually by 2020.  Forty percent of Americans over the age of 18 are already interested in trying CBD according to a survey by High Yields Insights, and many multinational brands are getting involved, with Coca-Cola, Anheuser-Busch InBev, and Starbucks testing the waters.

Despite the rise in popularity and the new legislation included within the 2018 Farm Bill, there is an apparent gap between the hemp supply and market demand. There is no issue finding raw hemp, and no problem selling the final extraction - the bottleneck is in the extraction process itself. Following a record-breaking Series A funding round in 2018, Mile High Labs is responding to this missing link with the first commercial-scale extraction equipment explicitly designed for hemp.

A Fundamental Shift in Extraction Mentality

Up until now, most companies producing hemp CBD oils borrowed from the same extraction processes used for marijuana (THC). These processes rely on laboratory-based equipment and are almost always small-batch. Small-batch THC extractions are economically feasible because the final product is highly restricted and usually sold locally. Scaling the extraction process can only go so far when the final product is as highly regulated as marijuana.

The hemp industry, on the other hand, is building massive international partnerships and has experienced a significant shift in the regulatory climate in the last six months. Naturally, CBD oil producers also require substantially more raw material input than any THC oil producing counterpart. Small extraction laboratories are not suitable for the requirements of the growing market, and the potential demands of the Coca-Cola’s of the world.

The Mile High Monster, released to the world on March 15, 2018, has already increased the capacity of Mile High Labs, a refinery located in Loveland Colorado, by 500 percent. This instant increase was thanks to a single machine delivered to a hemp farm in Eastern Colorado. Soon, with a second machine coming on board in Southern Colorado, Mile High Labs expects to see another 500 percent increase. Each hemp-eating Monster is capable of processing 50 acres of raw hemp material in a single day, which translates into six barrels of crude hemp oil.

The Monster, a sizeable farm-based piece of equipment, replicates the wells common in the oil and gas industry. Hemp farmers partner with Mile High Labs to place the modular extraction Monster onto their farm, to contain all initial crude extraction on-site.

The Monster represents a fundamental shift away from small-batch CBD extraction techniques, more suitable to the medical marijuana industry. With a scalable piece of equipment like the Mile High Monster, the hemp industry will finally have access to a commercially viable method of extraction.

Building a Mutually Beneficial Relationship

According to Stephen Mueller, Founder and CTO of Mile High Labs, modern-day hemp farmers don't operate like their peers growing other conventional crops.  In the traditional market, a farmer would never seed until there was a contract in place for the harvest. However, hemp farmers have ignored this conventional approach in an effort to access the early days of the hemp boom. There is often a harvest, without a final buyer.

With each Mile High Monster placed on a hemp-farm in Colorado, Mile High Labs creates a unique and mutually beneficial relationship. Farmers receive a guaranteed buyer for their hemp, and Mile High Labs is guaranteed a consistent supply of the raw material it needs to produce CBD ingredients at scale. Additionally, there is no need to move the bulky raw plant material off-farm, to a suitable processor. Instead of arranging to ship 50 acres of raw material to a processing facility, farmers need only make arrangements for six barrels of crude. Arguably, six barrels is a much simpler logistical problem.

Mile High Labs  Establishes a Unique Position in the Industry

With direct access to a consistent supply of crude hemp oil, Mile High Labs can service a broader section of the industry at a much larger scale than other CBD producers. With the launch of the Mile High Monster, they have effectively removed the bottleneck preventing ease of movement from one end of the supply chain to the other.

The Monster has also sealed their end-to-end GMP certification. The Mile High Labs crude oil refinery in Loveland can produce a spectrum of CBD products, from the full-spectrum crude oil down to the 98 percent isolate. Most importantly, Mile High is poised to service the growing demands for commercially-viable and scalable CBD extractions.