Sales Are Soaring at Eden Labs

| FROM THE PRINT EDITION |
 
 

Earlier this year, butane explosions caused $100,000  in damage to an apartment in Kirkland and lifted a house off its foundation in south Seattle. They were two of many accidents caused by the dangerous gas now widely used to produce the cannabis oil that is increasingly included in medical products, edibles and electronic cigarettes. Butane, which is used to extract the oil, is explosive and can contain dangerous impurities such as benzene and heavy metals.

Enter Eden Labs, which for nearly two decades has produced machines to extract plant oils for herbal medicines. The Seattle firm suddenly discovered its creations, priced from $500 to $275,000 each, were in great demand from a new generation of pot entrepreneurs interested in producing high-quality cannabis oil safely and in commercial quantities.

Since Initiative 502 legalized recreational marijuana use in Washington state at the end of 2012, Eden Labs founder Fritz Chess says, “We’ve pretty much tripled our size, tripled our growth and tripled our income.” In 2013, Eden did $2 million in sales and as of May this year, it was already at $3 million. In 2012, the company had four full-time employees. Now, it has 12 salaried employees and 20 contractors, including glassblowers, metalworkers and welders.

“Cannabis extraction,” Chess notes, “is the bulk of our sales.”
The secret to much of Eden’s success is the development of machines that exploit a cleaner, safer, more energy-efficient process based on carbon dioxide to extract oil from the plants. Butane, says Chess is the “Achilles heel of the cannabis industry.” It’s cheap and easy to use, but it’s dangerous. 

Chess’s interest in extractors began in 1995 when he wrote an article about Shaman Pharmaceuticals, a startup whose founders were traveling the world looking for plants that might have medicinal properties. Chess, who was then the owner of Eden Landscaping, wanted to explore further the world of herbal medicine, so he set out to buy a home machine he could use to extract oils from herbs. When he realized that no good extractors existed, he manufactured his own, using a process invented in 1879 by the German agricultural chemist, Franz von Soxhlet. It involves distilling a solvent through plant material. 

Chess modified the process to build a small countertop unit that could operate at low temperatures and collect the solvent for reuse, and began selling it under the name Coldfinger.

Chess sold Eden Landscaping to start Eden Labs and got another part-time job while the business was in its early stages. Through a process of trial and error and by hiring experts, he continued to make improvements in his machines. By 1998, he had closed his landscaping business and was working at Eden Labs full time. Although some of his machines relied on butane, they were far safer than devices commonly used to extract cannabis oil. A key advance came when he ventured into a more complex but more effective process called supercritical carbon dioxide extraction. When held at a high temperature and pressure, CO2 behaves like a fluid rather than a gas. Chess’s extractor forces the CO2 through plant matter, removing the oils, then passes through a separator that boils off the CO2 and pulls out the oil droplets. The CO2 vapor then enters a cooling tower, where it returns to liquid form. The whole process repeats itself until the batch is finished. Leftover plant material is a powder that is easily vacuumed out of the machine. 

The High End. The list price for this Hi-flo System 60-liter extractor is $235,500. Eden Labs now sells several of them each month.

Eden’s CO2 extractor design went through five or six iterations, each one extracting the oil a little faster, requiring less maintenance and using less energy. Soon, Chess was selling his CO2 extractors to herbal medicine companies like Shaman Pharmaceuticals and NutraMedix and to companies involved in flavorings, biofuels and plastics. The largest device he has made was a 120-liter CO2 extractor that sold to a flavoring company in Los Angeles for $275,000. But those large orders were rare and it wasn’t until marijuana laws were liberalized that he began to see sales build.

One important new customer was Brandon Hamilton, the founder of Seattle-based WAM Oil. In 2012, Hamilton spent $70,000 for a new Eden Labs extractor he calls “the first Ferrari on the track.” In a month’s time, it can turn 125 pounds of cannabis into 11 pounds of high-grade cannabis extract. WAM Oil is the first company in Washington to extract with CO2, and Hamilton’s extract was the first branded, trademarked and packaged concentrate sold in the state.

An architect who started his own firm in 2004, Hamilton became interested in the marijuana business when the recession hit and he had trouble finding work. He considered opening a dispensary, but ran into real estate issues and wasn’t sure his Mormon parents would support the venture. He also realized that customers were interested in edibles, pills or vaporizers, which can deliver the benefits of cannabis without the side effects that come from smoking. “I saw that concentrates were the future of this industry,” he says, “and that’s where I positioned myself.” 

Some form of cannabis oil has been around for centuries. Before modern technology, hashish, a compressed, resinous product of cannabis, used to be hand pressed or forced through a fine sieve to remove oils. “People have been making hash oil for thousands of years,” says Hamilton. “It’s just a matter of developing better efficiencies, staying with equipment that’s at the forefront of the industry.”

Taking It for a Spin. WAM Oil’s Brandon Hamilton with his Eden Labs extractor — “the first Ferrari on the track.” 

Hamilton looked at many approaches, including an isopropyl alcohol wash and the popular butane extraction process. He dislikes the butane process not only because of its danger but also because of the taste it leaves. “You can have less than 25 parts per million, but you can still taste the residue,” he explains. A chemist working for him heard about CO2 extraction, which led Hamilton to Eden Labs.

Using the Eden machine, WAM Oil manufactures cannabis oil that can be taken orally, smoked or vaporized. It also makes cartridges filled with cannabis oil that fit the popular ePen-style vaporizer, which is much like an electronic cigarette. 
Although WAM has only one production facility in Washington, Hamilton’s long-term vision is to build as many as five laboratories across the country. He also has seen interest from competitors and people wanting to get into the marijuana business. “I get calls all day,” he notes.

With in-house research and development and the ability to design custom equipment, Eden Labs is ramping up its capacity to meet the soaring demand from clients like Hamilton. It is continuing to perfect designs, targeting optimal performance and ease of use.

An assortment of vials containing some of WAM Oil’s finished cannabis oil products.

“We have to learn how to streamline and accelerate the manufacturing to meet the needs of this industry,” says Chess.
Eden sells about 50 of the smaller Coldfinger units a year, a number that has remained steady. Prior to 2008, it shipped one or two of the larger CO2 extractors annually; it now sells five per month.

“Everyone’s working long hours,” Chess says. “There’s always something new to learn.” 

 

To Your Health

Many health claims are made about cannabis oil, which is densely packed with delta-9-tetrahydrocannabinol (THC), the primary psychoactive component, and other active compounds, including cannabidiol (CBD), which is thought to have analgesic and anti-inflammatory effects. The National Cancer Institute cites several studies in mice and rats suggesting THC and other cannabinoids may have anti-tumor properties, and producers in Colorado developed an oil they claim has reduced epileptic seizures in more than 80 percent of users. 

As of this April, 21 states and the District of Columbia had legalized public medical marijuana programs. Marijuana is still classified as a Schedule I substance under the Controlled Substances Act, making possession illegal, but the Obama administration has encouraged federal prosecutors not to prosecute anyone who distributes cannabis for medical purposes as long as they are observing applicable state law. 

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