WHY IS CBD OIL SO EXPENSIVE?

For first-time users, the cost of Cannabidiol (CBD) oil can be quite a deterrent. Even regular users, who need it for alleviating their symptoms, like chronic pain, may find it difficult to keep up their daily doses when some of the best and the most trusted brands are charging top dollar for their products.

Some of the top brands of CBD oil can cost you several hundred dollars for a single bottle. Still, you can genuine CBD oil for much less, if you can see through the marketing stunts.

After all, CBD hemp oil manufacturing isn’t that “complex” a procedure to cost you that much. It’s not like it is prescription pills that contain THC – the use of which is strictly regulated.

So, why do most CBD oil manufacturers charge their customers so much? Find out why…

The Reasons For The High Cost

While extracting CBD oil may not be a very complicated task, still, quite a lot goes into creating a bottle of this healing potion. The processes of farming cannabis and decarboxylating and refining CBD oil can be both labor-intensive and expensive.

Many cheap CBD oils are quite unsafe for consumption, as they don’t undergo proper purification processes. The usual suspects in cheap CBD oil are:

  • Presence of raw cannabis
  • Insufficient purification, presence of contaminants like heavy metals and fertilizers
  • Use of substandard raw material
  • Some don’t even have any CBD in them
  • Mislabeling its actual composition
  • Lack of due diligence in lab testing or skipping the process altogether

Although not all CBD products are created in the same way or for the same purpose, many companies still charge quite heftily. There are many reasons for increasing the prices of the end-product. Here are some of the reasons why:

#1 Agriculture Practices and Regulations

Like any other agricultural farming, the first set of expenses begins with the agriculture process. Apart from the cost of land, seeds, labor costs for cultivation and harvesting, and farming equipment, cultivators have to concern themselves about licensing procedures – state, city, county and even federal.

Unlike other farming crops, with cannabis, companies growing and distributing these plants have to go through rigorous reporting, testing, and licensing requirements – all of which cost a lot of money.

Different states have different licensing requirements and varying costs for them. Companies operating out of Vermont may be charged as low as $25 for growers, but for handers, the charges are as high as $500-$1000, plus a $5.00 per acre fee.

#2 Quality of Cannabis Strain and End-Product

Next is the quality of cannabis strain and production. Brands using higher quality strains will often grow their own cannabis or purchase it locally. This way, they can control the cultivation processes to ensure a quality product. To avoid regulatory issues and costs, many companies import cannabis from other countries. This may mean the quality of the product will be poor, as the countries exporting them may have fewer regulations on agriculture.

#3 Harvesting Process

The cost of harvesting an acre of hemp in Minnesota, or instance, is estimated to be around $300 to $600 per acre. Before the CBD oil can be extracted, the harvested hemp plant stems need to undergo further processing. For this, a machine called a decorticator is needed, which costs around $2 million. So, that’s yet another level of expenses that goes into manufacturing CBD oil.

#4 Labor-Intensive Process x High Man-Hours

From farming and harvesting to decortication and extraction, everything requires a large number of work hands. And even then, at the end of the extraction process, the batches of the substance produced are still meager in comparison. Then the process needs to be repeated many times over to create a significant quantity of the product. So, you can imagine how many man-hours are needed to produce a single bottle of CBD oil.

#5 Expensive Extraction Methods

Unlike the previously used cheaper method of extraction of cannabinoids, terpenes, flavonoids, and essential oils from the plant – an ethanol extraction + CO2 extraction – the current method – Supercritical CO2 extraction – is quite expensive.

The former method was cheaper as it allowed producers to process large batches. But then, why was it stopped?

The reason why the former method is no longer used is that the resultant CBD content is often much less potent, besides containing traces of the solvent (alcohol) that should have evaporated during the distillation and straining processes. These two factors reduce the overall quality of the product.

In contrast, the latter method does not use alcohol. The machines use only pressurized carbon dioxide to extract the oil from hemp. Oils extracted this way are of higher quality since there is no risk of solvents (ethanol) remaining in the product and the oil is more potent.

However, this process has to be done in smaller batches. Naturally, CBD products made in this process are more expensive.

According to Cannabis Business Executive, a Supercritical CO2 extraction machine’s cost ranges from $135,000 to $150,000. This is apart from a rotary evaporator and centrifuge machine that costs around $20,000 to $35,000.

That is, of course, not to forget the cost of buildings, infrastructure and labor costs, as well as the cost of raw materials (for those who do not grow their own crops).

Besides, some companies prefer to decarboxylate the produce before extracting the different compounds to remove the acids contained in the cannabis concentrate as well as to activate the cannabinoids. A decarboxylation oven of only a 10-cubic-feet capacity costs around $5,000 to $7,000. There are ovens with capacities of up to 38 cubic feet.

If you are looking for a CBD isolate product or at least a product that is devoid of THC (the intoxicating component of marijuana), the extract has to go through several more processes.

The CBD concentrate is first winterized to isolate and remove the unwanted compounds. This is followed by distillation to further ‘clean’ the oil. To remove THC, the distilled concentrate must then go through a chromatography machine, which may cost go up to hundreds of thousands. Mind you, this process also requires additional labor to operate the machines.

#6 Laboratory Tests for Purity and Concentration

Although the production phase is complete, the finished product is still not shelf-ready. It needs to be tested for purity and concentration. This means another later of expense added to the final price of a bottle of CBD oil. Quite a few tests are needed to ensure the good quality product reaches the stores.

Here, we have mentioned a list of services provided by a notable testing lab in Arizona:

  • 10 cannabinoids ($50/bottle)
  • Mold and fungus screening ($25/bottle)
  • 19 Residual Solvents ($35/bottle)
  • 41 Terpenes ($40/bottle)
  • Moisture Content ($15/bottle)
  • 4 Microbial Analyses ($40/each count)
  • Custom Services

After the lab tests are done, the product is ready to be bottled, packaged and delivered to the different distributors.

#7 Legal & Banking Expenses

Apart from all of the expenses that go into making the actual product, doing business selling cannabis products is not easy. Cannabis companies have to shell out much more for insurance, banking, and legal protection.

While a non-cannabis can do with a $700/ year insurance policy, a general liability business insurance policy for cannabis companies can amount to $500 to $700 a MONTH.

For hemp distributors to accept credit cards for purchases, they need to sign up with merchants who specialize in ‘high risk’ processing. These merchants can charge hundreds of dollars a month.

Besides, bank accounts and business loans are not easily available to cannabis companies. They have to find different and often costly places to store their cash. This often means opening costly offshore accounts.

Apart from these, cannabis producing and manufacturing companies have to invest in attorneys and compliance officers if they expect to run their business without running into legal hurdles.

Final Thoughts: This is why good CBD product can cost a lot

The processes used to produce a bottle of good quality CBD oil usually justify the high prices of CBD products. If you are thinking of buying CBD oil for its therapeutic properties, you should consider learning about the processes used before you decide if the price justifies the quality.

After all, what you would want is a pure, potent, solvent-free, and safe product, which has been extracted from good quality raw material with CO2 extraction. These processes may make the final product costly, but you should not have to compromise on your health.