CBD oil processor offers THC ‘remediation,’ but regulators urge caution – Pine Journal

Rebecca Becca Dufner, president of the company 1881 Extraction Co. LLC, of Hillsboro, said her company soon will have available a THC remediation process that reduces the THC to legal and economic amounts. She acknowledges that federal and state laws currently dont allow farmers to remove raw hemp biomass from a field if it exceeds 0.3% THC.

1881 Exraction Co., LLC, at Hillsboro, N.D., is named for the towns founding year. Hillsboro is the county seat for Traill County, established in 1875. The courthouse in Hillsboro was built in 1905 and in 1980 was listed on the National Register of Historic Places. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

Goehring said his agency urges farmers to plant varieties known not to exceed the THC standards, but cautions that environmental factors can stress the crop and make it fall out of compliance inadvertently. Goehring urges farmers to test and retest in-season to make harvest before they fall out of compliance. State inspectors can verify that the material is legal, and are required to destroy it if it is not.

There are two overall categories of hemp crops.

First, there are the grain-fiber crops grown by farmers.

Second, there are CBD crops grown in smaller plots and acreages.

Goehring said there were more than 3,000 acres of industrial hemp grown in the state in 2020. About 25 farmers grew for the seed and fiber down, down from about 90 producers a few years ago. To compare, 44 producers in the state are growing hemp for the CBD market for processors. Many of these growers range from 100 square feet to 10 acres. The CBD hemp varieties are the ones most likely to exceed THC levels, Goehring said.

The company is established as an ingredient supply company for companies wanting a premium, organic distillate. Dufner and partners would like to grow into the tolling market, which could be both organic and conventional hemp biomass.

1881 Extraction Co. today has three partners.

1881 Extraction Co., LLC, of Hillsboro, N.D., rents space for their CBD hemp oil extraction company in a building just west of Interstate Highway 29, owned by one of the companys partners. Farmer-entrepreneur Patrick B. Muller (pronounced MEW-ler)it to house a new implement set-up company called Total Ag Industries, Inc. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

Once we get all of the product into the oil farm, we send it to Minneapolis to be put into products to be formulated, Dufner said.

(Vaillancourt also is an owner of Global Organic Distro, based in Minneapolis, which has retail stores of various types in Minnesota, North Dakota (including Infinite Vapor & CBD, in Grand Forks) and Wisconsin. All of the businesses sell CBD oil products.)

The Dufner family are notable organic farming pioneers.

Joe, now 50, grew up at Buxton, where his father, Don Dufner, in the late 1970s started growing crops for what would become the organic market. Among a range of organic pulse crops, Don grew organic potatoes, and sold them to his brother, Hugh Dufner, who washed and marketed them for Hughs Gardens of Halstad, Minn. (Don, now 83, retired from farming in 2020. Hugh died Dec. 20, 2020, at age 75.)

Joe started his own farming entity in 1996. Joe and Becca have been together for 18 years. Their farm is about 2,000 acres, certified through MCIA of Minnesota. (Separately, Joes brother, John, farms in an organic enterprise near Buxton.) They grow organic crops, and conventional dark red potatoes.

Rebecca Becca (Christians) Dufner, 42, of Buxton, N.D., is president of 1881 Extracting Co. LLC, of Hillsboro, N.D., which produces CBD crude oil that is made into retail products in a Minneapolis-area location. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

Becca, 42, grew up at Hillsboro, N.D., where her father worked in deep freeze activities at American Crystal Sugar Co. She graduated from high school and started a tanning salon business at Hillsboro. The Dufners have a family of five children, ages 14 to 25. Their youngest, William, helps on the farm.

In the past, the farm would sell products to other companies and elevators. Becca established UpNorth Organics LLC, at Buxton, N.D. Becca heads that company, marketing the farms organic oats and dark red and white kidney beans, black beans and pinto beans to such entities as Amys Kitchen, S & W Organic Black Beans (a brand of Faribault Foods Inc.) and Eden Foods Inc.

The CBD world changed when Congress passed the Agriculture Improvement Act of 2018. The multiyear farm bill for the first time allowed growing of hemp, provided concentrations of THC are 0.3% or less. There are two hemp oil-type markets from types of hemp plants the oil seed/fiber market. The seed oil plants look more like a grain (flax) product, and it is labeled simply as hemp oil.

Then there are CBD-oil hemp plants that look more like Christmas trees, and produce oil from flowers and buds.

Biomass blossoms and buds are ground up so that oil can be extracted at 1881 Extracting Co., LLC, Hillsboro, N.D. The crude oil goes on to a 1881 MInnesota, and a formulation process in Minneapolis makes into retail products. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

The Dufners wanted to grow CBD hemp. And realizing there was no certified organic processor to sell to got into processing.

CBD hemp was a hot new crop. A liter of crude CBD oil was going for $3,000, but since has gone down to $500 per liter, due to overproduction.

For their farm, in 2019, Joe and Becca in 2019 bought seed from a Colorado supplier good genetics and put in 24 acres certified, which is a lot (of space) when youre putting in CBD hemp. They planted with a vacuum planter seeder, not the clones that some people were planting.

The year turned out too cool for hemp, and winter came early. And then the early snow and freezing took down plants in the field. And theres no crop insurance on CBD hemp, Becca said. It was a lesson learned for us.

In 2020, they planted a one-acre test plot, but only 30% of the seeds germinated or came up.

To replace that production for their processing, they found other Midwest producers to supply their developing processing company with certified organic biomass. At todays production levels, a single substantial Wisconsin producer brings in 10 tote bags of biomass at a time shucked or bucked flowers and leaves about 250 to 300 bags per year, each weighing about 200 to 300 pounds.

Getting into organic CBD processing has been an education in itself.

Organic production requires that three entities the grower, processor and formulator all be certified organic.

Becca flew around the country, shopping for an extraction machine maker.

Biomass is milled into a powder before going through extraction. Every 20 to 30 pounds of biomass makes about 1 liter of CBD crude oil. 1881 Extraction Co. currently produces CBD, and CBG, and would like to produce other cannabinoids, such as CBN and CBC. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

1881 Extraction bought a food-grade extracting machine from a Fort Collins, Colo., maker. The machine pressurizes its vessels with carbon dioxide, rather than using chemical solvents that most CBD processors employ.

(Technically, the term is super-critical CO2, which means the CO2 is under extremely high pressures, causing it to maintain its liquid properties.)

The extraction machine itself is about $700,000.

Ariel Riemer, director of operations 1881 Extraction Co., LLC, of Hillsboro, puts ground, organic hemp biomass, into one of the extraction vessels. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

1881 Extractions machine has two extraction vessels and three separators. Extraction vessels are cylindrical, stainless steel tanks with top and bottom end-caps. Separation vessels are smaller. The biomass is reduced by a 7-1 ratio into crude oil.

Ariel Riemer, director of operations for 1881 Extraction Co., LLC, of Hillsboro, N.D., weighs golden CBD crude oil. The company makes about 6 to 8 liters of organic hemp CBD crude oil per day, which is taken to the Minneapolis, Minn., for processing into formulations for retail. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

Pressure separates the oil from the chlorophyll and unneeded resins. This produces a golden crude oil, which is the consistency of a thick honey. It makes completely certified organic."

1881 Extraction Co. LLC, at Hillsboro, N.D., produces a golden, organic crude CBD oil which is shelf-stable for about a year and longer when distilled into other products. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

This post-process equipment moved to Minneapolis, in conjunction with partner Vaillancourts businesses. In a related but separate phase, Global Organic Distro formulates the distillate into retail products. Becca noted 1881 Extracting Co. can produce non-organic products at all levels for farmers on a toll basis. CBD products are often sold as a dietary supplements or included in creams and other personal care products; they are unregulated as supplements by the Food and Drug Administration as long as companies make no health claims.

1881 Extracting Co., LLC, of Hillsboro, N.D., recently launched tincture products called U by 1881, (Companys slogan: Our products are right for U.) The isolates, in various concentrations, contain zero percent THC. Photo taken April 6, 2021, at Hillsboro, N.D. Mikkel Pates / Agweek

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CBD oil processor offers THC 'remediation,' but regulators urge caution - Pine Journal