Shawn Hauser: [00:00:00]
Rick Trojan: [00:00:02]
Shawn Hauser: [00:00:24]
Rick Trojan: [00:00:28]
Ryann Hinch: [00:00:35]
Shawn Hauser: [00:00:46]
Rick Trojan: [00:00:50]
Ryann Hinch: [00:00:58]
Shawn Hauser: [00:01:10]
Ryann Hinch: [00:01:13]
Shawn Hauser: [00:01:21]
Rick Trojan: [00:03:40]
Ryann Hinch: [00:03:43]
Rick Trojan: [00:06:57] Sounds good. Thank you, Ryan. Good morning, I'm Rick Trojan the President of the Board of HIA. And the theme the morning, we're going to be an excellent, excellent seminar coming up for you guys. Want to welcome you to our educational webinar series. We're glad you could join us today to discuss our first topic of 2021; hemp derived Delta-8 THC. It's a subject that's generated a tremendous amount of interest and excitement for a number of reasons, and we hope you'll leave today with a clearer understanding of Delta-8 in the scientific, legal and policy issues surrounding that. Although this compound was first identified over half a century ago, it has been the subject of some medical studies, it has only recently gained popularity with consumers, creating yet another promising opportunity for hemp and the industry. Inquiries to the HIA for information on the chemistry affects usage and the legality of this cannabinoid have increased exponentially. So it was an obvious choice for the topic for the first of our two 2021 educational webinar series, a free service to the industry we intend to offer all year long. As the nation's foremost trade association, we believe in sowing the seeds for a thriving hemp economy by leveraging our most vital resource -the expertise of our members. We asked two of our members, Vicente Sederberg and Industrial Hemp Farms, both established leaders in their fields, to join us today and share their knowledge and insights on Delta-8. Thank you very much to Matt Guenther from Industrial Hemp Farms and Shawn Hauser of Vicente Sederberg, for their generosity in helping us out today. Speaking of lawyers for disclaimer, this webinar is for educational services and is not legal advice that are legal risks and commercial activity related to Delta-8, and any company engaged in such activity should consult with legal counsel to address the applicable state and federal laws.
Rick Trojan: [00:09:02] HIA, its members, affiliates and associates provide educational content only and are not responsible for the independent decisions based upon the opinions outlined in this presentation. So before we get into it, we had quite a few questions submitted. We'll take questions obviously submitted during the presentation in the chat and ask them time allowing after the presentation. But we have some frequently asked questions we want to cover before we make the introductions to Matt and Shawn. First, what is Delta-8. Delta-8 is a naturally occurring cannabinoid in the cannabis sativa plant. It has been shown to have medical applications since the mid-1900's. According to US patents, it's of note that CBD is typically two percent dry weight of Delta-8, which is approximately point two percent dry weight. And Delta-9 is approximately one zero point one percent. How is it how is Delta-8 manufactured? There are multiple methods of converting cannabinoids into THC. The primary method is from hemp CBD conversion process. Is Delta-8 legal? The 2018 Farm Bill removed all cannabinoids from the controlled substances list, including THC, Delta-9 THC, less than zero point three on a dry weight basis. Delta-8 is not specifically scheduled as a drug on the current Controlled Substances Act. Is Delta-8 just Delta-9 Lite? No. It's an entirely separate and unique minor cannabinoid founded in hemp, not unlike CBC, CBG or other minor cannabinoids.
Rick Trojan: [00:10:48] It is a more stable compound than Delta-9 THC, which can convert into CBD. And finally, is Delta-8 THC calculated in the total THC limit defined by the USDA? The USDA's final rule does not account for Delta-8 THC in the total THC limit for compliant hemp. So with that, I'll make the introductions to our real stars of the show, the experts, Shawn and Matt. Matt Guenther has been professional, involved in the cannabis industry for the last six years, helping to guide Industrial Hemp Farms, one of the country's top vertically integrated hemp farming and CBD wholesale companies for the last three years. He recently co-founded the American Caernarfon Association, which allows him to follow his passion, applying science to cultivate the future of the cannabanoid industry, both domestically and abroad. Shawn Hauser, Shawn's the partner at Vicente Sederberg and chair of the firm's Hemp and Cannabinoid Department. Shawn helps marijuana and hemp companies navigate the intersections between state and federal law, including hemp law, food and drug law, regulatory compliance licensing, general business representation, investment and general business matters. As chair of Hemp and Cannabinoid Department, she advises clients on the legal landscape governing cannabinoids in hemp, helping form compliant business structures, maintain compliance with the food and drug laws as they evolve and help inform solutions that best position clients for success at the state, national and international level. She's also been named one of Denver's top lawyers by 50 to 80 magazine the past five years. So without a welcome Shawn and Matt, Shawn handed over to you to talk about the legal overview.
Shawn Hauser: [00:12:44] Great. Thanks, Rick, and thanks for having us today. Excited to talk about excited to talk about Delta-8. And I'm really going to go through with the current legal landscape governing Delta-8 and try and answer. The question is, is Delta-8 legal? And I think my slides will show up here in a second. But I wanted to reiterate now and throughout this that, you know, we as the industry have a responsibility and to protect health and safety and do this right. And there are a lot of uncertainties about this, this molecule that the law is evolving. So I appreciate everyone taking the time to get educated here and walking through this so that we can help shape policy and ensure the science is there and to make sure we produce safe and effective products going forward. And let's see, I'm sorry, I'm not seeing the slides here.
Ryann Hinch: [00:13:56]
Shawn Hauser: [00:14:14]
Rick Trojan: [00:15:03]
Shawn Hauser: [00:15:06] so the primary governing law is the of course, the Controlled Substances Act, which is now amended by the Farm Bill and under the plain language of the Controlled Substances Act, now amended by the Farm Bill, all hemp, which is the cannabis plant, if not more than point three percent on a dry weight basis, is no longer a controlled substance, as well as tetra cannabinoids in hemp, which are now by virtue of the Farm Bill removed from the CSA definition of tetrahydrocannabinol and notably the definition of of hemp. Now legal includes not just the plant under point three percent, but the derivatives extracts, cannabinoids, isomers, acid salts and salts of those isomers derived therefrom. So the primary question is what is Delta-8? To the extent it's a derivative extract isomer of hemp, it is not a controlled, controlled substance under the CSA and. We'll get into it, Matt's presentation is what is it, is it an extract, is it an isomer? And that determination made me really depend on the specific product that's being produced and what kind of purification process is included. Now, is it truly a natural isomer, a natural derivative? It does, in fact, fall within the exclusion, and that may not be the same for all Delta-8 on the market. Regardless of whether a substance is excluded based on the plain language of the CSA, a substance can still be controlled if it is an analogue of a controlled substance.
Shawn Hauser: [00:17:32] And I'll get into that in a second. But essentially the Analogue Act was enacted to prevent the sale of designer drugs, drugs that could be slightly modified, but have this effect, the same substance or same structure and effect of a controlled substance. So thinking of Spice and K2 in those kind of designer drugs and of course, to the extent Delta-8 is derived from marijuana, it is still a Schedule 1. And as I mentioned, key in the Controlled Substances Act definition is, is it an isomer, is it an extract, isn't it derivative of some isomers are not naturally occurring. I'll defer to Matt here on the chemistry. But not all isomers truly fall under this this definition. So it may be a product specific question as to whether a substance meets the CSA exception. And also, I don't know what is clear is that Congress, in enacting the Farm Bill, you know, included, expressly intended to exclude derivatives of the legal plant from CSA control. So, again, the question is, is the substance truly a derivative of legal hemp? Importantly, as many of you are aware, the DEA issued a Final Rule this past August making a number of purportedly conforming changes to the CSA, which are not the subject of the top of the conversation today, but also contained language regarding synthetics that could be interpreted to mean that the DEA considers Delta-8 to, in fact, be a controlled substance.
Shawn Hauser: [00:19:21] And that definition is highlighted here, where they say first synthetically derived tetrahydrocannabinols, the concentration of Delta-9 THC is not a determining factor in whether that material is a controlled substance or synthetically derived tetrahydrocannabinol remains a Schedule 1 controlled substances. So the term synthetic in here is not defined and could reasonably be interpreted to include Delta-8. And that's very important because that means the DEA, you know, may interpret the Controlled Substances Act to mean that Delta-8 or at least certain Delta products are controlled. And it comes down to one, the definition of synthetic and how the Delta-8 was was produced. If it's deemed to have been derived from a human controlled chemical reaction, it may in fact be a synthetic form of THC and thus a Schedule 1 controlled substance. And again, coming down to is this a naturally occurring isomer, you know? How how is that? The Delta-8 produced and it's going to get into that in much more detail, you know, there are a number of counterarguments, today's position, both procedural and substantive. You know, many argue that the summarization process itself does not convert a cannabinoid into a synthetic one. Again, I think that will come down to the exact process and how much of that is naturally occurring versus a human made reaction.
Shawn Hauser: [00:21:05] Another is procedural, going back to, you know, through DEA's history of how it is thought out to regulate THC and THC containing compounds and whether, you know, a final rule without notice and comment is the appropriate avenue to schedule this if it was not in effect schedule already. So. Long story short, whether the weather Delta-8 is a controlled substance under the plain language of the Farm Bill is uncertain. I think a court could come down either way on that, depending on the science which which will in the chemistry which we'll get into. That much is going to depend on the chemical process, the process itself of the production of Delta-8 and the interpretation of the final rule, which has not yet been interpreted in a court of law. Importantly, the Federal Analogue Act of 1986 also applies and would render a substance controlled one intended for human consumption if that substance is both. Has the same chemical structure and same intended effect as a substance and Schedule 1 and schedule two, and therefore that substance would be treated as scheduled and it would be unlawful to manufacture or distribute it. So the two prong test under the chemical structure is really one in which I think we'll we'll look to Matt to answer some of these questions. But the first one is know, does the substance share a chemical structure substantially similar to that of a Schedule 1 or schedule two controlled substance? So does Delta-8 have a structure similar enough to controlled THC to render it a controlled substance? And courts have been inconsistent in many cases and how they've analyzed this prong under the Analogue Act.
Shawn Hauser: [00:23:05] And it's unknown where they how they would come down really on Delta-8, as many of you known as Matt will get into how Delta-8 and Delta-9 differ with respect to a single chemical bond. But they're not identical. You know, they do have actual and perceived chemical and pharmacological similarities, but they also have some differences. DEA and it's, you know, recent resource guide list, Delta-8 as another name for THC, which indicates that at least DEA has come to the conclusion that, you know, it. It deems Delta-8 to be similar enough to use the same terminology as THC. The second prong of the test is what is the actual intended effect? Is this similar enough to warrant it being an analog? So does the product have an actual or intended effect that is substantially similar to or greater than the stimulant, depressant or hallucinogenic effect on the central nervous system of a Schedule 1 or schedule two controlled substance? And again, this is one where courts would look to the analysis of pharmacological experts and chemist to determine the answer here. But we do know, one, the existing data is limited, but it appears that Delta-8 does not have a pharmacological effect that is greater than Delta-9 THC, although, you know, it is known to be psychoactive, even though it's known to be less potent.
Shawn Hauser: [00:24:40] There are some GRAS notifications for protein powder that reference assumptions that it's 75 percent psychotropic. So a question that would come down in a court of law would be, is 75 percent sufficient to classify Delta-8 as substantially similar and interested to hear, you know, the opinion of Matt and other chemists and pharmacological experts to this point. And underscoring to that, as I mentioned, you know, DEA appears to think it does. So that in itself creates risk, despite what the law says. Another important. You know. Primary governing law to always remember with hemp, of course, and I'm sure no one is forgetting these days, is the FDA in order to legally sell a product, not only has to be compliant with controlled substances laws, but also with federal and state food and drug laws. To the extent these products are intended for human consumption and with respect to most Delta-8, which is sold in the form of a dietary supplement or a dietary ingredient, any new dietary ingredient must comply with the FDA, meaning it has to be subject to a new dietary ingredient notification substantiating that it is safe for its intended use. To my knowledge, I don't believe a notification has been submitted for a Delta-8 product. So companies that are doing the safety studies on Delta-8 and understanding the safety and efficacy for an intended use, there is a pathway to compliance under the FDA that's necessary to legally sell these products.
Shawn Hauser: [00:26:29] And another important component of the FDA, which everyone is all too familiar with, is that it is prohibited to introduce or deliver an interstate commerce, any food or dietary supplement for which has been added either an approved drug product or a product for which substantial clinical investigations have been instituted and made public. And this is the commonly referred to as drug preclusion provision, you know, which FDA relies on to prohibit CBD as an ingredient in food and dietary supplements. Whether this provision would also preclude Delta-8 would depend on whether the status of studies. Governing, you know, Delta-8 as an ingredient. And so to determine whether a novel substance such as Delta-8 THC is suitable and legal for use in a food and dietary supplement, one would need to confirm whether the drug preclusion applies. Look at whether there are existing studies that actually preclude this as an ingredient in a food or dietary supplement. And then second, if not, you know, whether the substance is compliant with FDA requirements demonstrating the safety and efficacy of the ingredient under its intended conditions of use. And those steps must be done as a free market step to marketing and selling this product for food products. I'll go over this quickly. You know, the legality depends on whether the substance has been, you know, used in food, you know, prior to 1958, probably not applicable here for Delta-8, you know, if it's generally recognized as safe for its intended use.
Shawn Hauser: [00:28:26] To my knowledge, is not for Delta-8 or is allowed pursuant to a food additive regulation. So there doesn't appear to be, you know, a legal pathway for food under the existing for Delta-8 in food under the existing framework. So that's something companies will need to. The legal pathway the companies will need to pursue if it seeks to, to include Delta-8 and food for dietary supplements, which are the most common. Product types for Delta-8, you must submit a premarket notice requirement to FDA that has enough data to establish that the ingredient doesn't present a significant or unreasonable risk of illness or injury when used as directed and include a detailed description of the dietary supplement history of safe use and other evidence of safety in the ingredient cannot present a significant or unreasonable risk of illness or injury when used undirected is the label. So in order to legally market and sell a Delta-8 product, you know, these important safety premarket steps through the FDA process must be complied with for legality. And, you know, state food and drug laws often mirror federal laws. So they will contain, you know, generally the same type of provisions in addition to having to comply with federal and state food and drug laws, with the free market and safety requirements, you must check the state laws and criminal laws.
Shawn Hauser: [00:30:02] And in many states, also marijuana laws, which in many cases prohibit and in some cases like. And in Idaho, where there's outdated laws, you could criminalize the production of production and sale of hemp derived Delta-8 THC. So as with, you know, the. The common practice with any cannabis law, the applicable state law is incredibly important. And I wanted to emphasize a number of practical considerations I mentioned at the top of the call, you know, I do think as we. Are looking at these new cannabinoids and, you know, having this innovative research and these great opportunities to provide something potentially beneficial to the market, we have to make sure these products are safe and efficacious and that the research is done. And, you know, we do have a responsibility, you know, as an industry to do this right and in the interest of public health and safety. And, you know, regardless of the legal position one takes based on the Controlled Substances Act, the Analogue Act, Federal Food and Drug Act, federal and state agencies and law enforcement, they may not agree. And it appears the DEA does take the position that this is controlled. So, you know, that opinion or uncertainty with respect to agency and enforcement needs to be considered and taking legal risk. Enforcement of DEA's position could be significant. That could mean criminal prosecution or civil forfeiture.
Shawn Hauser: [00:31:35] You know, there's the cannabis industry enforcement, consumer protection agencies, plaintiffs attorneys are all becoming increasingly aware of Delta-8. Given the lack of of safety data we have today. You know, there's a significantly increased risk of product liability due to the potential and possibly unknown psychoactive effects of Delta-8 THC, you know, due to the likely lack of legality, at least under FDCA. And, you know, there are certainly risk of exposure there for folks across the supply chain, so anyone thinking about selling these products, in addition to looking at those specific processes, their safety studies, you know, looking at getting compliant with FDA and the CSA, of course, it's certainly important to have insurance coverage all across the complied chain, a supply chain, you know, in contracts, documentation confirming that the lawful source of Delta-8 is hemp, you know, testing that there's no other adulterants and really due diligence to ensure that all, you know, safety protocols are in place as much as possible. And, you know, you're mitigating risk to the extent possible. And again, in cannabis, always critical to confirm applicable state law requirements in addition to the federal law. And I'll I'll put up in there, you know, given that much of the federal analog analysis comes down to the chemical structure and effects of these products, I'll turn it over to Matt here to tell us about that.
Matt Guenther: [00:33:17] Yeah, hi, everyone, so my name is Matt Guenther. I've had the honor and privilege of working with Industrial Hemp Farms for the past three years, and I'm here today to kind of go over all the nerd stuff associated with Delta-8, which is my bread and butter. So I'm really excited. I'm going to see if I can share this, get to my presentation here. This is the. Cool. And we'll make sure. Everybody good? All right, so just a basic overview of what we're going to be doing today. I want to go over a brief history of Delta-8, just where it came from. I was curious myself how long it's been around. And we're going to talk about what is chemical structure. So, Shawn, great presentation, by the way. Thank you for that. And a great transition. You brought up how substantially similar it really was never legislatively to find when I started working with the Analog Act over a decade ago. My biggest question from a chemical standpoint was what is chemical structure? They never bothered to define that legally there. So we're going to go over that and talk about the two-dimensional molecular geometries, three-dimensional MGs. We're going to talk about the NEP calculations for phytocannabinoids, because those are a great way to talk about the electronic structure of the compound. I know a lot of people have questions about production. And so we are going to go into the rearrangement of cannabidiol.
Matt Guenther: [00:34:41] The isomerization lots of different methods out there are not going to get too crazy into it. But at the end of this, you'll see a variety of different contact information. If you have questions you want to nerd out, get to me at one of the emails and we'll talk about it. But I definitely want to talk about lab testing and some of the pharmacological implications based on the chemistry that we're seeing. So from here, brief history. Yeah, it's first reported University of Illinois in the early 1940s. The journal I saw on it was August 1941. A couple of interesting things I noted. They produced it with isomerism from cannabidiol 80 years ago, the same thing that we're doing now. And they thought they had a really efficient reaction at the time. They bragged about it in the paper. And it turns out it really wasn't that good. But human volunteers even at that time were signing up to try it out and see what happens. I thought that was funny because that was just a couple of few years after the Marijuana Tax Act and already the scientists were out seeing what was going on with the plant. So fast forward to the mid 60s, I believe was 1966. That's when Delta-8 THC was actually structurally characterized from cannabis and that led to more complete stereo specific methods of production.
Matt Guenther: [00:35:49] And don't want to get too long winded on that because I really want to focus on the definition of chemical structure, because not only from a chemical and pharmacological standpoint, but also from a legal standpoint, as Shawn mentioned, you know, legislatively, we need to know what these terms mean. So the three primary components, the first of which is molecular geometry, is the one that I think most people are familiar with. If you were to Google CBD structure that, you know, stick image with the letters, that's molecular geometry. So it's two to two or three-dimensional arrangement of the atoms in a molecule shape on laying on angles, torsional angles, which if you didn't brush up on those this morning, don't worry, it's not as complicated as it sounds. We'll see those in the structures later. And basically it's what most people associate with chemical structure. And up until this point, that's what's mostly been used in a court of law. And that's why starting ten years ago, I started focusing more on electronic and crystal structures of compounds to show that there's substantial dissimilarities in those as well. So electronic structures, it's just the motion of electrons, you know, around the molecule, basically the electromagnetism, and usually involves really advanced quantum calculations. But MEP is a molecular electrostatic potential analyses. They're really quick and easy ways to analyze that. Those electronic structures, crystal structure. We're not going to talk about too much today, but I want you to be aware of it.
Matt Guenther: [00:37:13] So this is two-dimensional molecular geometry. I think we're all pretty familiar with it chose two different representations. You'll see the Delta-9 on the right has a couple of hydrogen atoms. They're coming. And then on the left, you don't see them. Really? Why? It shows those was the lines coming in and out. These are two-dimensional images, but they're supposed to be three-dimensional representation. So when you see things in, you know, goofy looking lines like that, that's just trying to emphasize the three-dimensional nature of the compound. And obviously is recognition of mentioned the primary difference. What separates these compounds in the molecular geometry is the location of a double bond you see in that top left ring system. So Delta 88, see, it's between the eight and nine positions, Delta-9, it's between the nine and ten positions. So depending on the chemical, there's always a numbering system to tell you, you know, what is what. It depends on the different ring systems you're dealing with. So I don't want to get too long winded with that. They're what I do want to explain. I think this is important because I know there's people with different knowledge bases of chemistry here. I just want to make sure I'm on time. When you're looking at these structures, you know, the bottom right of each compound has what's called a Pentel chain that Zig-Zag goes down, up, down, up, down.
Matt Guenther: [00:38:33] I know just looking at things chemically that that is five carbons and as many hydrogens as it needs to be stable. That top left. I know that's CH3 because it's a carbon as many hydrogen needs to be stable. The reason that's important is because when you add OH-hydroxy. If you learn a little basic chemistry in the stability behind it will go into you're going to start seeing what in the coming years will be played with that pencil chain and some of the sort of on the top left. And that's going to really cause dramatic impacts and pharmacological effect as well as chemical structure. So I wanted to include a comparison to CBD and CBN as well, because what you'll see, the main difference, obviously one's an agonist, one's an antagonist, and the biggest difference is obviously the broken ring system. So on the left, Delta-8 THC. Tetrahydrocannabinol in general are actually tricyclic terpene or terpenoids. They're derivatives of terpenes. So they're basically oxygenated terpenes. And so somewhere in the structure, you can find it. The reason that that's interesting tricyclic one, two, three ring systems, CBD is an area and it has a broken ring system. Doesn't look too different at the two-dimensional level with three-dimensional. It makes a very big difference. We're going to see that in a second.
Matt Guenther: [00:39:48] Also really wanted to bring up a comparison not too far to CBN, because as Rick has pointed out to stability is critical, especially when it comes to these isomers. So these things are going to spontaneously rise based on their environmental conditions and what where they feel most stable when. And CBN, as we talk about, you know, Delta-9 is going to degrade more rapidly in CBN compared to Delta-8 because Delta is more stable. CBN is kind of like where every compound is trying to eventually get to instability. And you'll notice that CBD, Delta and Delta-9 are all isomers with the Formula C twenty one each thirty two. And that's later in the presentation cannabidiol all very similar. Twenty six carbons to twenty one carbons to oxygens and twenty six hydrogens. And those losses of hydrogens are what actually ends up making the compound a little more stable. We'll see that a second wanted to bring up when I brought up the change before too. You might hear about THCV and THCP. One of them is just on the left here. It's just the purple Humalog. It means that instead of a five carbon chain, it's got a three carbon chain THCP same thing, seven carbons instead of five. The reason that's important is because we start studying the pharmacology of these compounds. I think we're going to find drastic differences based on compounds that allegedly should behave similarly based on some of the past experiences we've had.
Matt Guenther: [00:41:15] So now we're going to get in the three-dimensional molecular geometry. I apologize for anybody that's looking at this and wishes that I was spinning them around. I do that in real time and I will put out videos later so that you can see how I'm arriving at these when we try to vasin with the wire in the way I wanted to do things, it just didn't come through and render. Right. So in looking at this, you'll notice that at the top, if you look at the wire frame of these molecules, the double bonds where they're supposed to be, the ball and stick models don't show them. It's just a software thing. But I wanted to show you when we're talking those torsional angles I joked about earlier what you'll see even three-dimensionally here. And you can really see it when you spin it, is that the first two ring systems are likely pretty flat. And I'll show you that in a second. But then the third one, it's because of the differences and bond length bond angles, because of that difference in the position of the double bond it has to contort itself in order to actually remain stable. And so that's that's another big thing. You'll see a side angle here. I turn it around and flip it so that the opposite, that red dot is one of the oxygen's outstandings, molecule, everything below it.
Matt Guenther: [00:42:27] And that straight line is actually two ring systems almost perfectly lined up. You'll see a little bit of contortion just below the red, but pretty stable. And then the third ring system at the top is contort. It has to be because that's the only way they can find stability. You look at I wanted to include this, too, just because when we're talking about these balls and sticks, really all these individual atoms and molecules are just amalgamations of energy, you know, working together to form stability and create the compounds that we know. Here's CBD. I want to show you flat CBD. So, again, you can see broken up ring structures. This is flat, a little different on the left. And I want to go too far into this because the videos were better. But I want to get to CBN now. And what why how you can see the stability. Keep in mind that in the wire frames, the top left and bottom right ring structures have as many up there. They're not really double bonds are like one and a half bonds, but it's a hydrogen structure that keeps the compound stable. And this is where you can really see it. When you flip it, you can see all three of those rings are almost horizontal. You know, obviously, you can see a little bit of contortion there, just the left of that, you know, front facing oxygen atom.
Matt Guenther: [00:43:40] But you can start to see the stability three-dimensionally as you start playing with some of these compounds in the software and down the road. I'll. Some more exciting things, so that's all I Kuttler geometry. Now I want to talk about the electronic structures of things. And this was over a decade ago. That's why I started this software, because I had to figure out a way to show, you know, judges, potential juries, an electronic structure that made sense without getting into, like, quantum mechanics. So this is what I came up with. It's pretty easy to understand blobs of color. So what we do is we calculate the magnetic and electronic structure of the molecule. Using these MEP calculations, I set the software to put in six different gradients, you know, depending on polarity in charge. And what you can see here is Delta-8 at the top. And I made it transparent. So you can see the structure. And we've agreed that the two-dimensional molecular geometry has a lot of similarities, three-dimensional, still some a little less than 2-D. Now we get in the electronic structure and I can go right here, that's Delta-9. So, again, we can still see some similarities around the oxygens. As we would expect, the polarity is a little more increased. But this is really interesting when it comes to a substantial similarity standpoint is let's say, you know, I was a fan of impressionist paintings.
Matt Guenther: [00:44:59] Right. And I wanted a Monet in my living room, but I didn't have that kind of money. So I hired somebody to make something that was substantially similar. And if I showed them this picture and they then delivered this one, I'd say, hey, great work. But it's not substantially similar to what I ordered. You know, I don't want it hanging in my living room. So obviously I included. And when I have the videos and I'm doing this real time in three days, it's a lot more impressive because you can see just how different they are three-dimensionally, because the other sides of the molecules that you can see are pretty different. The idea is that the shape and polarity of these electronic structures, there's a solid argument to be made that they're substantially just similar. But again, that's for the courts to decide. So if you want to side by side comparison, that's a pretty good one. I also included NEPS for CBD and CBN. Obviously down the road. And there's a lot more calculations to do. But I think we're in our infancy of understanding the pharmacology behind some of these electronic structures and why some are producing an agonnism versus anagonism at certain receptors and pharmacology parts coming. We'll get there soon. Definitely want to talk about production Rearrangement for the isomerization.
Matt Guenther: [00:46:12] I know that there's a lot of people using a lot of different methods, labs I sourced from. There's three different methods that I really like and I've encountered numerous other ones and just not as educated about them. But I am educated about the chemistry behind them. People are kind enough to invite me in their labs and nerd out with me out of respect for them and their intellectual property. I don't want to go to in depth with it. Again, if you want to contact me personally, we can talk about it. But I do want to go over just the basis of what's occurring. So let me see if I can move this here. Just out of the way. Yeah, sorry about that. So Delta-8, Delta-9 CBD, they're all isomers like we talked about. They share the same chemical formula. C21 H30 02 just, just arranged in slightly different ways. CBN again chemically related but arguably more stable because it lost the hydrogen that didn't need that was messing it up as isomers. They can spontaneously rearrange themselves depending on environmental conditions. And that's why I know that there's been some controversy about as the plant make Delta-8 as a naturally occurring. All right. I've seen some arguments that the plant isn't supposed to be able to make this. I've seen conflicting nonetheless, whether it can make it or not.
Matt Guenther: [00:47:21] You can pull a plant, a cannabis plant out of the ground and they'll they did it way back in the 60s. That's how he characterized it, the full synthesis. So the reason I bring that up is whether it's the plant doing it or whether the plant is producing Delta-9 THC that is due to environmental conditions. Naturally isomerizing it is naturally occurring and it is part of part of the plant, a constituent. We pull it from the ground and test it. So again, multiple different routes to obtain nearly identical results. And again, we're talking about the hemp derived production of Delta-8. I cannot place enough emphasis on that. I thank you, Shawn, for emphasizing that hemp-derived production begins with extracting and isolating CBD from hemp. And then from there, it generally involves a PH modulation. There are some, you know, neutral routes out there and stuff like that. But generally somebody is going to try to put it in a more acidic environment and in the presence of the right concentrations, right conditions. It just it does it itself. We're not doing much anything. It just spontaneously starts isomerizing in to a combination of tetrahydrocannabinol the same way it did in 1941. And then that's, you know, again, they had a mixture of a bunch of different different type tetrahydrocannabinols there. Obviously, we've gotten much better over the years of getting exactly what we want out of the product.
Matt Guenther: [00:48:45] So anyway, there's there's always talk about color and. This is one of the things I talk about, the different acid's different catalysts, which at times are acids, for these reactions, and different post-wash methodologies are all going to contribute to the final color. The reason I bring up color, you're going to hear a lot of people ask questions about bleach. I heard they're bleaching it and stuff. And when when I hear bleach, I think of hypochlorite solutions. I hear ammonia I think NH4+ solution. What you may be hearing more about, I hope, is bleaching clays which have been used in a variety of industries, variety of different similar reasons. I hope that's whether anybody's putting hypochlorite on hands on this stuff, get them out of the industry. So, all right. So lab testing, this is one that a lot of people have trouble with. I included the kind of the basis of chromatography and Mass Spec. I don't claim to be an expert on either one. I'm much more familiar with Mass Spec, but my brother is a chemical engineer and so he wouldn't let me live unless I fully understood chromatography at some point in my life. So it is pretty simple. It's as simple as dissolving a fluid or dissolving your product into a fluid, which can be a gas, a solvent water, you know, methanol, ethanol, whatever that your mobile phase or phases.
Matt Guenther: [00:50:03] And it carries through a column and basically that column on the stationary phase, it's something that different compounds want to stick to for different amounts of time, basically different binding affinities. And so, like, how long that that compounder that that test sample is in the column is what we refer to as retention times. And Mass Spec, like I said, you're just breaking the molecule apart either with electrons or hitting it with energy, and it breaks up in its constituent ions, its fragments. And at that point, you had a puzzle piece and you just put together what more than likely the structure is going to look like. So a combination of chromatography and Mass Spec will yield your results. Gas chromatography used to be more common. Most people switch to liquid chromatography. HPLC is high performance liquid chromatography. And that's because, as most of us know by now, gas chromatography, which is run run around 300 degrees Celsius, that's more than enough energy to de-carboxylate the compound. And my personal opinion is that THCA and Delta-9 are two different compounds and should be quantified as such. But I don't write the laws, so I'm playing ball with what they say. I do want to note that again, I believe that we're in our infancy for testing and testing methodologies. I don't believe that the industry will be as successful as it could be if we just keep limiting ourselves from atomic chromatography and Mass spec.
Matt Guenther: [00:51:27] I think over the next two or three years you're going to start to see a lot of testing solutions that don't require two and three day turnaround times and really, I guess, less of a margin of error. And, you know, throughout the two and three years, you know, we can talk about it and talk more about what I think the future holds. The reason this is important is not only are you guys potentially buying selling products, transferring across state lines, of course, you don't want anything to be hot, but there's also some drug testing implications. So just to basically tell you what is causing the problem between Delta-8 and Delta-9, which is since mostly been fixed, it's the fact that they do have similar retention times and they do have similar post-ionization molecular fragments. And that's why, you know, a lot of labs are erroneously reporting Delta-8 as Delta-9, because if their equipment or their software is aren't calibrated, they're not going to get those peaks are just too close. Same thing with CDC and D10. We're seeing a lot of that right now as well. One of the thing, most of the labs have gotten better. I kind of like the fact that they're making labs register with the DEA and making it easier to do so, because I do want you know, the calibrations are very important to what we're doing and research and development.
Matt Guenther: [00:52:40] And it's very important to with drug testing, because I know there's a lot of people that talk about this. But here's the science behind it. When you take a drug test, like usually a dipstick test, it's programmed to test for the presence of the drug and its metabolites. Right. And so obviously, Delta-8 and Delta-9, it could definitely trick a test. I could see that happening just because obviously, if the peaks on chromatographs are that similar, is a dipstick going to test it when you send it into a lab? We've had confirmation personally if the lab is capable of separating Delta-8 from Delta-9 and the Delta-8 metabolites from Delta-9 metabolites, you're fine. But if that lab isn't calibrated to do that. Then they're going to think they're looking at D9 and D9 metabolites, and you could find yourself in a bad situation and above and beyond all things. You know, the reason I'm in this industry is to try to help and try to move our society forward. You know, I don't see anything bad happen to anybody. So I just wanted to be candid about that.
Matt Guenther: [00:53:36] Now, the pharmacological implications that I'm almost done. They're both CB1 and CB2 receptor agonists, the inhibitory constant in the KI. For D-8 it's higher than D-9 at CB1 and CB2. the higher the actual inhibitory constant, the less potentially psychotropic or psychoactive it would be.
Matt Guenther: [00:54:01] So D-9 is stronger, it's got a stronger constant, so it's making more of an impact at CB1 and CB2. Delta-8 not so much. The reason that I think it's really important to talk about this is that we haven't really adequately modeled our endocannabinoid systems, what receptors are doing, what it's great to talk about, see when want to see receptors all day. But that's why I put in those three receptor sites specifically. There's a lot of different novel activity at GPR18 GPR55 and GPR 119. And we got to start studying that because as I talked about before, as we start playing with these molecules and the research and development arenas, whether it be the alkain chains we're substituting those constituents or playing with the top left, you know, they're going to have a huge impact on not just seeing on not just CB1 and CB2. And what we what we see right now is the pharmacological profiles of Delta-9, Delta-8 being limited to CB1 and CB2. I don't think that that's doing those compounds justice in terms of complete pharmacological profile. So, you know, I'm hoping that down the road we get to spend a little more time looking into that stuff. So I guess, you know, obviously we're going to open this up to questions. If you want to contact me.
Matt Guenther: [00:55:14] There's three different places if you want to nerd out. This is molecular product formulation based email only a matt detla8.science. Anything about the American Cannabinoid Association, which is really a big passion project for me this year. We're going to be doing a lot of fundraising and doing a lot of stuff with HIA. Definitely anything associated with this presentation or moving forward with the industry, please email the HIA directly, whether it be Rick or Ryann and you can see me at americancannabinodis.org. And then for any information about commercializing your endeavors, especially with our vertically integrated company, contact me at Matt @ industrialhempfarms.com. And otherwise, I really appreciate the time and I look forward to contributing however I can in the future. Thank you so much to Ryan and Shawn. So.
Rick Trojan: [00:55:59] Thank you, Matt. Appreciate that. Lots and lots of good questions before we get into that, we just want to Ryann, if you want to cut to the next slide. Tell you about the Cannabinoids Council we have here. We have a Fiber Council, the Grain Council, and of course, one for the cannabinoid sector. The purpose is to convene thought leaders to find solutions distinct for the cannabinoid industry. So stuff like establishing industry standards. We currently work with us hemp authority and their standards on the CBD side. We'd like to have similar standards like that applied to all the cannabinoids, help identify best practices, make strategic recommendations, and really help expand the US cannabinodis on the international market, for that matter.
Rick Trojan: [00:56:44] So reach out and change public policy and the education, regulatory clarity, consumer confidence, craft or smokeable flower are all very important. So if you're interested in helping us with leadership and expertise on that, please reach out to firstname.lastname@example.org. We have a couple about 10 minutes for questions. Are there quite a few are submitted and written. And Matt, let's start with you talked a little bit about the lab. So there's a lot of we had a lot of questions about labs and labs uncertainty to be able to detect Delta-8 versus Delta-9. How do we how would you as a company or a consumer or retailer, how do you know that your testing agency is compliant, your testing partner is compliant, and how do you know you can rely on their results when it looks like there's so much deviation in the space right now?
Matt Guenther: [00:57:40] Great question. And like I said, moving forward, hopefully we come up with better solutions and more cost effective solutions. But really, one of the most efficient ways that that I found really, really qualified labs is by testing with everyone and a lot and see which labs are capable of producing consistent results with each other. You know, if the labs are putting out the most specific result, possible results and they're all matching, it's a pretty good idea that they're good. There are. And like I said, I don't want to I don't know how much I should say or say about other companies, but there's a really, really well known and respected company here in Florida that I test with a lot. And down the road, obviously, we might be doing some filming over there, too, which will be pretty exciting over the next month. So you can see exactly what's happening when when they're testing and some of the regulatory compliance behind it. But the best thing you can do is ask them a real nerdy questions, see how much they really know. And, you know, if ask them to describe, hey, man, what do you think you're seeing here? Because I know that I've had questions of, hey, why are these people shifting back and forth? And I could speculate till the sun sets, but unless I have more information about the equipment, the calibration, it's kind of hard for me to know. So the best advice, I guess, is ask tough questions and try to educate yourself, know if you get lied to or not.
Rick Trojan: [00:59:00] Test early and test often. All right. Shawn is a question for you on Shipping Laws and labeling requirements, shipping it nationwide. Thoughts there and then labeling what should be on and what shouldn't be on from a high level.
Shawn Hauser: [00:59:18] Sure. Well, the on the state level, these really differ state by state with hemp. In the FDA's absence of regulating cannabinoids, states have adopted their own regulations and they vary from certain ingredient requirements to QR codes to warning labels. So you really want to look at that on a state by state basis. On a federal level, you know, there are certain requirements that apply to the specific product types as far as, you know, dietary supplements versus vaporizers versus edibles. And those will apply depending on the product type. And of course, the product would have to be legal under the FDA to sell nationally.
Rick Trojan: [01:00:04] Excellent, would you speak? Quickly, would you speak to the liability of providing consumers with products that haven't been studied for toxicity such as Delta-8 and Delta-10?
Shawn Hauser: [01:00:20] Yeah, I mean, in general, I think there's potential for significant liability there across the supply chain. And, you know, especially if that product is not in compliance with federal and state food and drug laws and or the controlled substances laws. But even if so and the proper safety studies, if the proper safety studies aren't. Aren't followed, but it's likely not compliant with state laws, state and federal food and drug laws.
Rick Trojan: [01:00:53] We've with a lot of questions if this is going to be available offline and we are going to have this saved and put up on the member portal. So you'll be able to log in as members and view this recording as well. A couple more minutes. We have a question here. What other cannabinoids and byproducts results from the extraction process?
Matt Guenther: [01:01:14] Wow. So that's great. And it's a loaded question. So it depends. If you're talking about extraction from hemp, you're going to be seeing all kinds of things. And right now, just because of a lack of really adequate reference standards and labs, just having access to the reference standards, being able to calibrate accordingly, you don't see as much as you would like to. But if you specifically look for him and request the chromatograms to go through the thing after the conversion process, really, if you go through the isomerization, we're starting to see peaks for things like CBe, CBDm, CBDN and some of these other things that that I'm really excited about pursuing. And then also down the road, there's no limit to what we can potentially do, depending on on obviously the legal framework. But I think that we're going to be heavy into research and development for the, you know, producing, you know, the phytocannabinoids that we know and love, but that don't really have in extractable quantities right now. So, yeah, I mean, I don't know if that adequately put the answers to questions, but what we're seeing, like, you know, when you're seeing a ninety five and a ninety six percent and it's crystal clear and you're like, well what's the other two or three percent. A lot of them are minor cannabinoids that just don't really have, you know, verified reference standards in a lot of labs right now. So.
Rick Trojan: [01:02:34] This is a question for both of you, and this is, I think, a great question for retailers or wholesalers. There's so many companies right now ready to jump on board if you look online, selling Delta-8. What are the top things to look for to ensure you're getting quality products? Let's start with Shawn. Let's start with you. Maybe talk a couple of things and then, Matt, your perspective.
Shawn Hauser: [01:02:57] I guess I could I can speak to the legal side, of course, they're going to want to prove that the product is sourced from legal hemp. And, you know, having that the suppliers verification of their hemp license, the appropriate testing and not just THC content, but also, you know, contaminants and adulterants and, you know, good testing, getting a good certificate of analysis. And like Matt said, I do think it's efficacious to have multiple testing and then just supply chain custody documents to make sure the product is lawfully transferred throughout its supply chain and not subject to any contaminant on its way. And, you know, of course, on the legal side, the studies substantiating safety and efficacy for the intended use.
Rick Trojan: [01:03:51] Matt, what are your thoughts?
Matt Guenther: [01:03:54] I guess my initial thought would be, I guess if you're in this industry and you're going through retailers and different, you know, companies that you might want to source from or buy from, the first thing I would look for is to see if I own it, because if I do, I would buy from that one. If not, I would I would suggest that you really take the time to work principal to principal to see, you know, how involved the company and their owners are with the industry. Are they just somebody that was trying to throw some money at something or are they really passionate about it? Because I know myself and all the people we work with at IHF and all the people were lucky enough to network with and they say, you know, we're really committed to doing the right thing. And it seems to me that when people are committed to doing the right thing in this industry and for the right reasons, they get the best results. So I think the integrity is the first thing I look for in any company, knowledge and integrity. So.
Rick Trojan: [01:04:50] Excellent. How are you ensuring that byproducts of Delta-8 isomerization are safe for consumption? How you assume that other Matt I guess in this example two percent. How do you assume that that is or did you assume that safe for consumption?
Matt Guenther: [01:05:11] One of the things to consider is that, you know, in view and it's different for each person. But I have the luxury of actually looking at the chromatograms, too. So, you know, I know that they're testing for specific things, but it's pretty clear if something goes wrong, you know what I mean? If you're getting up to a certain point and again, that's something I can probably speak a little more to and definitely have a little more time. But yeah, there's based on every chromatagram I've seen that I've ever sold before, I release product. We're we're very good. And I can actually that might be a good next presentation is how I come to that conclusion. So.
Rick Trojan: [01:05:50] One final question, does the Indorse Delta-8? Recall in 2015, the shunned CBD. Thoughts? So the mission of the HIA is to advance the hemp economy and educate the market for the benefit of the members, the public and the planet. So the recent growth of the hemp-derived CBD market not only provides economic opportunity and new market access to farmers, processors, manufacturers, distributors and retailers. So it's our belief as Board members of the organization that access to safe legal hemp-derived Delta-8 and other cannabinoids is important for the continued industry expansion and for the stability of the industry. So we are excited for these markets to continue to develop. Again, we welcome you guys to join the Cannabinoid Council and have conversations with us. Help us set strategy moving forward, help protect and expand these markets. You can find info thehia.org For that. Want to take a moment again. Thank you very much, Matt. With Industrial Hemp Farms, Unshorn with The Sun, Zetterberg for your time and expertise. Thank you, everyone, for joining again. Will post this up on the members portal at the EDG. Thank you very much. Have a great day.
Matt Guenther: [01:07:04] Thanks, guys.
Shawn Hauser: [01:07:04] Thanks, Rick. Thanks, guys.
Tim Lebrecht, Air Products: Hello, everyone, my name is Tim Lebrecht, and I'm here today to speak with you about industrial gases for the processing industry, my role ast Air Products is I'm the industry manager for Cryogenics. And I think there's a lot of information here that I've got for you today that you're going to be quite interested in, because a lot of things there's been a number of questions around what are industrial gases and what are they doing in the hemp industry. So I can tell you, I'm going to talk about what those things are. I'm going to talk about safety, how they can help with efficiency, how they can help with product quality. And lastly, if you've got safety and efficiency and quality, you're going to have increased profitability. So before I get started, I want to say, too, thank you and would say first thank you to the Hemp Industries Association for this opportunity to speak. And thank you for joining us here today, because I think the information I have to share will be quite useful to you. What I want to talk about is industrial gases and cryogenics, what do those words mean? What gases am I talking about? And then as we talk about that, the expertise of their products has would certainly come into play. So who is that as a company? The benefits that these gases can pose to your industry, where where we're doing research, what new technology, new items we're bringing to bear? And lastly, I think the items you don't want to miss is how each one of these gases go into specific applications that you may or may not be already doing today.
Tim Lebrecht, Air Products: But if you're not, I want to you want to listen to this because there's certainly some new ideas and new approaches that will go into your use in the future. So as we get started, what is nitrogen, what is carbon dioxide? These are these two gases. We do refer to them as industrial gases. And I know that you've heard that term before, but what does it mean? Why are they used in the hemp industry or why could they be used? Well, Wolf, first are known for being inert. Inert means they won't react, that you can put them in and they will do various different jobs, but they should not react within your process. Secondly, they're extremely cold, cryogenic and a cryogenic. We're going to define that in a slide or two. But the benefits of that cold temperature and how cold it will be will be very important. Each one of these gases requires unique storage and handling equipment. They also have some unique safety requirements and how they're handled in handling them correctly are very important. And then lastly, you might be wondering, well, it says industrial. How clean are these particular gases? Well, here at Air Products, we do have technology allowing us to manufacture them and to purify them to standards for the food and for the pharmaceutical industry.
Tim Lebrecht, Air Products: And we've been doing this for decades and decades so we can help you use them not just safely and efficiently, but also use the right gas or the right material that will be safe for your end customers. So as we start cryogenics, what does cryogenic mean, an easy definition, it's a temperature of less than one hundred degrees Fahrenheit. So what use is that going to be? Well, let's look first at the difference between the two, whether you're nitrogen or CO2. And these are not because I know CO2 and some uses can be supercritical. This is not a supercritical use. We'll talk about that later. Nitrogen has a boiling point of negative three hundred and twenty degrees. CO2 has a boiling point of negative one hundred and nine. Both those are Fahrenheit if you're looking at Celsius. So nitrogen is a negative one. Ninety five and CO2 negative seventy eight. So the ability of harnessing those temperatures, the ability of the harvesting, the inertness of that really provides some unique opportunities. It's unique in various industries, whether you're in the foods, pharmaceutical, chemical, et cetera. In this case, for the hemp industry, it can improve the inertness can certainly improve your safety, because many of you are using flammable materials such as ethanol, butane or other flammable type of use so it can help with your safety. I also know that there's especially this time of year, we're in the harvest season, molds and Nelda's can become very much an issue.
Tim Lebrecht, Air Products: So it will hinder those or stop it completely. It can rapidly cool material to optimise extraction or purification and the winterisation process. And we can also achieve higher production rates as we use that temperature to speed up reaction processes or to speed up purification. We're looking to improve product quality and enable a sustained and planned manufacturing process so that you don't have to work 24 hours a day during the harvest season. And then as you go six months into that, you're working a much more a shorter day, if we could level that out over the whole year. There's optimization that can happen. So cryogenic gases and nitrogen and CO2 can both assist in those areas. So let's talk about nitrogen first, and the question is, where do you get nitrogen? Isn't nitrogen in the air we breathe? And that answer is yes, nitrogen is in the air. We breathe. The air includes 78 percent nitrogen, roughly 20 one percent oxygen and a much smaller amount of argon. Here at our products, we specialize in the ability of separating those gases and then putting them into a form, or we can transport them from our facility to your facility. So as we look at this page that I have here, you see the air products portion is on the left. On the right hand side is that's your facility. So what we and our products do is we would then work with you, understand what it is that you want to do with that product and then put a liquid tank there that is designed around.
Tim Lebrecht, Air Products: Are you going to use it as a liquid? Are you going to use it as a gas? What's the flow rate you're going to use? And then we would put that equipment there on site so that you would have the ability of using it in a very safe and efficient way. And so that illustrates we want this tank to be outdoors, shows a photo of here of going in and using this as either a gas or liquid. So let's talk then, carbon dioxide, carbon dioxide, a little bit more challenging and the question around, where does that come from? Well, it's a byproduct of many different processes. Probably the most common is ethanol, followed by ammonia and then anything in the hydrogen production or various different wells that have it available. So, as you can see, there is this one has a more diverse approach. And it also is somewhat of a challenge in gas because it's it's a known greenhouse gas component. And the question is, right, why CO2 in this industry? Well, it's a way of B of creating a positive out of a negative at products we champion ourselves on thoughts on how do we how do we turn a negative into a positive. And here we've got a very positive use of carbon dioxide. And again, we do all this separation and ins and safety pieces and put it into our trucks and deliver those to your facility and at your facility.
Tim Lebrecht, Air Products: Again, there's going to be a tank outdoors. It's going to be a little bit higher pressure, but we'll put that will decrease that pressure before you use it and then send it in for various different applications. And we're going to talk in a little bit about what applications are going to use that and then how to do it more safely. Here's a good time to talk about air products as a company, we are a global provider for industrial gases. There's only a few global providers out there and here at air products, we are focused on many, many different industries and many different gases in this circumstance. I just want to talk today about nitrogen and CO2. But if you're seeing other trucks rolling down the road with our picture on it, you're going to see hydrogen, you're going to see argon and many other gases as well. Here at their products, our number one job, our number one focus every day when we go to work is safety. Maintaining a safe workplace is a fundamental and moral responsibility. And we take that we take that message very, very seriously. And what we believe is that one hundred percent of accidents are preventable. The only acceptable goal is zero accidents and incidents. We strive for that every day at air products. Safety is a condition of work.
Tim Lebrecht, Air Products: And we do that not just our safety, but we're interested in your safety. And many of the applications, many of the uses that we want to talk about and believe that need to be considered are safety in nature. And as we talk about those, we're leveraging the expertise they talked about as we have supplied products to the chemicals industry, the refining industry, pharmaceuticals, food and beverage, water treatment, many of those areas are hand in hand with hemp processing. So the reason we're really here to talk about is we've created so many technologies over the years that have optimized and been used in those particular industries and have really done step change optimizations. And now we can use those in this new hemp processing industry as well as develop new. So it's a mix that we're that I'm going to be talking about here shortly, a mix of established technology and some new that are that are going to be making a difference for you. So here's a map, but I'm not going to go into details on this map, but but the message here is we are where you are as their products. We've got plants all over the United States. I've not included the rest of the world, but we also have plants throughout the world. So if you're viewing this webinar from outside the United States, I encourage you to keep watching because we do have opportunities there. But in the United States, we are where you are.
Tim Lebrecht, Air Products: And as far as quality and standardization, I did want to mention here, because so much of what the food and the pharmaceutical industry are part of is not just very high purity, but also traceability, quality processes, and that we are meeting the grapes and also the GMP requirements are a big deal any place for the US, FDA or federal country equivalent. We're following those regulations. We must comply with those. And nitrogen and CO2 are analyzed and have traceability back to specific Lotte's specific details on a batch basis so that you have the ultimate flexibility of knowing where did that nitrogen or where did that CO2 come from? We've done this for decades from the pharmaceutical and food industry, and we can then deliver it to you in the hemp processing industry very effectively. As we look at technology. And this is really the key is to where we wanted to move forward, we're not just doing it ourself, even though we've done a lot over the years, we are working with various laboratories, various universities in our products. We do have a cryogenics R&D area. We've got a full scale food test lab and a cryogenic applications lab where we can do grinding, where we can bring hemp in and understand is there an opportunity to preferentially take trichomes off of that and then process just that and not have the biomass. Are there other areas involved, such as working with the University of Virginia? We've got a cold chain approach of the better of really what is the difference of CBD versus CBG work and using a cold chain.
Tim Lebrecht, Air Products: So there's a lot of things we've got working. But the message here is you've got the full arsenal of an air products R&D team and you also have the relationships that we have developed with various universities where we can help bring established technology, prove it out to you in a laboratory environment, and then take it into the field and then also work with cutting edge universities on on specifics. We do have a partner listed here. There was a recent press release. I would encourage you to look for where we're working with the University of Virginia. So that's one example. There are others, but I've just listed that one today. So here now is the part that you really want to pay attention to. I wanted to jump into the areas here where we enhance areas in the market. We're looking at greenhouse growth, supercritical CO2. We're looking at packaging, using those nitrogen or CO2, biomass processing, extraction and purification, all those type of areas. Industrial gases can bring betterment. The benefits. I highlighted a few early on, but we're talking higher yields, stronger plants from a greenhouse standpoint in supercritical extraction. We're looking at purity, solvent concepts. We're also looking at preservation and quality, efficiency, shelf-life enhancement, all those type of things at a very high level.
Tim Lebrecht, Air Products: And now we're going to get into more specifics. Let's start first. Early on in the phase, the growth phase. Now we don't do anything in the fields for many types of growth of hemp, but we are able to supply items to greenhouses. CO2 into a greenhouse is a way of increasing yield and growth. Photosynthesis is a process where the chemicals you're using highlight and they turn CO2 into sugars. So as we look at where does the industrial gas, where do we come into play, it's that CO2 supplementation. We've got the the ability to not just supply the CO2, but the work with individuals as well. How do you put the CO2 into that facility? What concentrations are safe? What concentrations actually magnify the growth versus hinder the growth or really not have any effect? So our technology team is there and can help in that in those light. As far as biomass handling and preservation, I'd say here is likely where we have seen the most difference to date. I don't know if you've seen or heard this in your locality, but we actually have been doing flash freezing using tunnel freezers that have been used and have been made for the foods industry. It's a faster alternative to either hanging in the air or mechanical drying processes. This allows the hemp and I'm going to have a short video here shortly and you can see it. But what I want to tell you what you need to look for.
Tim Lebrecht, Air Products: We're actually in this photo. We're putting the hemp onto a a conveyor belt that's going to flow through this tunnel freezer. We're using a 20 foot tunnel freezer here that will process between a thousand and fifteen hundred pounds per hour, whether nitrogen or CO2 is used. We do have some flexibility. The unit that we're going to show here in the picture is is a nitrogen unit. And we have successfully frozen hemp during the twenty nineteen harvest. But you may say, oh, that was last year. Well that was we were just trying it out this year in 2020. I've got active projects in multiple parts of the country in different areas with a number of different tunnel freezers going simultaneously. I believe the largest one that we're entertaining now is up over five thousand pounds an hour. So where I want to highlight here is this is where we've got some unique technology, unique concept. This is the first time I do want to point you to a specific means of getting information from us at air products that comes hemp. We call that our knowledge center. And at that knowledge center, there are data sheets, there are videos, there are customer testimonials. There's a lot of information there. So I'd encourage you to look at that. Here's an example of something you may see now. I'm going to click on the screen here. And if technology works, it's going to go to a video. Let's see how this works.
Speaker2: Did you know industrial gases can help improve the harvesting and processing of industrial hemp, the same air products, gases that have been used safely and successfully for over 60 years, and the food and pharmaceutical industries can also be used by hemp processors to improve the quality and yield of their product. gases such as Ultracal, liquid nitrogen and related equipment like our tunnel freezers can help make your production process more efficient. Freezing your harvest prior to storage prevents mold and locks in the plant's rich chemical content during the grinding process. Adding liquid nitrogen to the conveyor can eliminate oil stickiness that causes clogging and subsequent downtime. And when cold extracting liquid nitrogen can be more efficient, removing the desired oils all resulting in improved quality and yield. Talk to us and work with our application experts to review your process and identify opportunities. We have a state of the Art Applications lab to test your product, or we can visit your site for field testing. Let's work together to improve your hemp production process. Visit our website for more information.
Tim Lebrecht, Air Products: Ok. Get back to here, OK? That is a great example, I'd say, of our flash freezing technology and you can see it there in action. As I said, we've can the typical size is about a thousand to fifteen hundred pounds an hour for a 20 foot tunnel freezer. If you need to do more, we would go to a longer freezer as it's all about speed of that conveyor and the residence time inside of it. I do want to take a second here to talk about, well, what do you do once you freeze it because you do the tunnel freezing? And then what it does is we want to work. You want to put that material right into a refrigeration truck because when you flash freeze it at such cold temperatures, you're essentially encapsulating everything in it. So it's not a means of drying, but it is a means of preservation and isolating any issues from we had talked about the molds and the mildew and one hundred percent of the CBD or CBG or the terpene, whatever is in that material. When you flash frozen, it will still be in it when you go to process. So after it leaves the tunnel freezer, you're going to probably want to put this either in direct cold storage or in a refrigeration truck until you get the cold storage. And in this circumstance, cold storage means zero degrees. Doesn't mean you need to go to cryogenic numbers.
Tim Lebrecht, Air Products: But it's not just a refrigeration, it's a freezer type temperature. And a typical cold storage warehouse type company can work for you in that light. Here's a photo or picture of what these tunnel freezers are, and you can see that there is a loading table here on the left, there's nitrogen that is put in in the center portion of that. And there are fans within it that are spreading that temperature throughout. So it's an even evenly cool. So there's some high voltage, some low voltage and exhaust that are with that. So they said we sell this routinely into the foods industry. And now it's been as we're moving this into the hemp processing industry, we've done both sales and we've also done some one, two or three month temporary leasing type programs. So I'd encourage you to contact your air products representative if you're interested in this and see, hey, what can we do for you in the amount of hemp that you're processing and also the the types or whether you're doing a CBD, whether you're doing a smokeable bud or some other types of hemp units. Also, as we talk about handling, I did want to take a opportunity to talk about modified atmosphere packaging, this is the CO2 or a nitrogen or a blend of both of those. And the way this works, it's not truly where you need to then isolate the temperature at very cold.
Tim Lebrecht, Air Products: You're actually using the inertness where you're safely packaging either flowers or biomass with oils. And we're all around preserving and preserving with quality in that if you don't have the oxygen present. The mold in the milieus are not going to have the oxygen for for growth or oxidation, so you're inherently increasing shelf life and quality. So both of these, whether you'd be flash freezing or whether you'd be doing modified atmosphere packaging, what this allows is for you to expand shelf life, take the time and process this appropriately up front and then give yourself the ability after it's been in storage or for it could be for a number of months. We've not looked at a number of years, but if you can store it throughout the entire calendar year and then operate at an eight hour a day, a 12 hour a day, a five day a week, whatever type operation your manufacturing set up allows, you can level load your facility much more efficiently and much more effectively. Now, as we get into that facility, that processing facility, there's three different ways I want to talk about, because there's several. First is the CBD oil extraction. Where were you looking at using nitrogen and CO2 in some different ways and then also seed and fiber in those areas. We're doing something different. We're not really looking at the extraction process. But we're looking at Cragin and grinding and how do you use that cryogenics to actually allow those seeds and fiber to be handled more efficiently, more effectively? Let's start with the extraction.
Tim Lebrecht, Air Products: Extraction techniques can be called ethanol, could be supercritical CO2, butane or hefting or some others. There's there's a number of items out there. There's even a few where they're trying to be somewhat solvent. Less industrial gas can help improve many of these processes, especially when you're talking extraction or purification. Let me do this, all right. As far as CO2 goes, we're talking supercritical or subcritical CO2. This is is actually the reactant I had said before CO2 and nitrogen were inert. Well, there are at their more natural vapor pressure stages. CO2 can become a solvent, but you've got to take it up to a supercritical pressure and that pressure temperature combination is so very important, a high pressure boost is an area that air products can help many processors or technology providers in this industry. They ramp the pressures all the way up to the supercritical, which is well over a thousand, could be a few thousand. But many of them start. They need the starting point of the CO2 to be nine hundred upside. We don't store that no one stores a CO2 at nine hundred psi, it's a lower pressure. So there's a pressure boost. Technology could be pumps, could be some other type of things that go that could take place. And there's also the replenishment CO2 can be recycled into these processes.
Tim Lebrecht, Air Products: And many of the technology firms will talk about recycling and how not so much CO2 needs to be made up. We've been finding in the majority of those that we serve, there's roughly a 15 percent make up. At minimum, it could be more. And so we will continue to replenish with fresh CO2 at that at that usage rate. I also want to comment here that air products does have a supercritical CO2 laboratory with our European team, and we can make use of that in many circumstances. As we get into extraction as a different unit operation, I want to talk about the cold, the cold of liquid nitrogen, specifically in this circumstance, because CO2 is cold, but not quite cold enough to do what we need to do to make the extraction. And then the winterisation portion do what you need to do more effectively. Cold ethanol extraction is one where we've heard many people, they kind of stop at about minus 40 degrees C or minus 40 degrees F. They they're the same temperature as both the both of those temperature ranges crossover at that point. Important temperature range, though, is what happens if you could go to minus 80 degrees C. And once people start to look at that and say, wow, the purification side or the ability to process extraction at that colder temperature, it brings a whole new set of opportunities to them. So mechanical chilling, being limited to minus 40 is really can hinder getting it to those next level of of optimization.
Tim Lebrecht, Air Products: Our air products team is ready to either provide you with colder temperatures than minus 40, either directly from liquid nitrogen or working together with a mechanical chiller. So maybe a mechanical chiller would only cool ethanol down to, say, a zero degrees C, minus 10 to minus 15. And then we could take the liquid nitrogen, which remember was was, well, a negative one. Ninety five C, I want to say, really can cool it down to those colder temperatures minus 80 C is a good limit because as you get colder than that, the ability for the ethanol to, to work is somewhat limited because it's viscosity starts to increase. But anyway, the end of the cold ethanol, an extraction is a great area. And we do have heat exchange technology that allows quick movement of the ethanol starting point into those colder temperatures. Cryogenic conveying is is an area that I want to mention here as well. If you're ever interested in both the ethanol and the biomass meeting in the extraction chamber at nearly the same temperature, we can do that cryogenic conveying here is the same unit that we have used in our cryogenic grinding technology for a number of years. And it's a means of conveying either biomass or other type of materials into an extractor in this case or into others at a very controlled temperature.
Tim Lebrecht, Air Products: We already have cryogenic designs for this where we can manage and control those temperatures very, very precisely. So those are an area that that could be of interest. So specifically a cryogenic conveyor. We have equipment available. And then also as far as that cold ethanol extraction or winterization, we will have a heat exchange system that we could speak to you about. That could be quite interesting for you. And with that heat exchange system, we certainly want to talk winterisation extraction is one area where colder temperatures can show a betterment. I actually believe winterisation is an area that could actually do an even better job. Winterisation here is a means of purification following extraction, whether it be supercritical CO2 or ethanol. And it's a means of really isolating those fats and lipids. New heat exchangers here that we're in the mid development with and will have ready very, very shortly will allow ethanol temperatures or winterization temperatures down to that minus seventy five or minus 80 degrees C range. Now, as we get into I said we lead with safety, I wanted to keep that is a focus here as well, whether it be processing in an extraction or winterization, whether it be in the biomass handling following harvest, we are certainly focused on safety here at our products. And gases like nitrogen are used due to that inertness. Nitrogen is more common in a blanketing type world or an emerging world than what CO2 is, but both would work.
Tim Lebrecht, Air Products: So if you had one on site, I'd encourage you to explore the use, especially if you've taken a liquid product and used it for its refrigeration criteria. You're going to get the gas. So then using the gas and in a way of capturing that or getting it to a pressure that's focused on the on the blanketing side will be very, very simple to do and very inexpensive. I've often referred to as blanketing and as the most inexpensive insurance policy you'll ever get. And an area like this is one where you definitely want to pay attention if you're using ethanol, if you're using butane or propane or obtain any of the flammables. I've read a number of places over the past year where hemp processors have had either significant fires, explosions or whatnot, and they whinge from not really paying attention to those flammable vapors. Blanketing is an area where we can help with that. And we really encourage you to explore that and explore that with us here in air products. I mentioned before, we're talking about fiber and seed, this is a whole different area than those of you looking to to do CBD or CBG type manufacturing. Cryogenic grinding is an area where you actually can unleash items that you wouldn't have before traditional uses of hemp, whether they be seed or oil, curd or fiber, cryogenic grinding work is it really opens new doors, benefits of cryogenic versus ambient, really shows of how can you unlock that oil content.
Tim Lebrecht, Air Products: We have worked with some of our current customers in areas such as fish farming and fish feed. Using the oils and proteins within hemp seed are actually preferable because they have buoyancy criteria that other other foods do not. So if you can then go through and do a cryogenic grind and get things down to very, very small micron levels, then we can then that can be better. Incorporated consistent particle size is another area dialing in that right temperature, getting the right consistency of whether it be protein or whether it be the oil content that you're after. The use of a cryogenic temperature range allows the standard deviation also to be shrunk and really violent to what that would be. So the oil you can see on the right hand side and some of these pictures, this is a trial apparatus that we had set up. We're taking the seed, which is in more of the center. And then you can see on the right hand side, oil has built up on that particular unit is it was really sending it through that just told us not cold enough. So we needed to dial in that temperature on the test unit a little bit colder. We put another 20 or 30 degrees with that. And that particular screen was clear and the the particles flew just went right through it.
Tim Lebrecht, Air Products: To know what is the right temperature and what is the right approach? I talked about this being a test unit. We have a full scale cryogenic grind lab and a corporate facility in Pennsylvania. We're more than happy to work with any hemp grinders, whether it be for Hurd or for fiber or for any of the oilseed work that's been done. We're currently right now working with another university here in the mid-Atlantic on a herd and fiber grain project. So hopefully in the next few months of the next year, there be some periodicals or some papers come out with specific details on that. Here's a quick illustration of what does a cryogenic grind process look like if you had oil seeds, for example, and the upper left hand corner, you can see the bin where the product feed would go in. So we would then have the ability to send that material through that hopper and into the cooling conveyor. Now, here's where the information and really the the air products knowhow comes through. That cooling conveyor is the unique part, getting the right throughput, getting the right temperature, the right speed. So what you're doing is getting the right amount of time, the right residence time inside that conveyor. So you're delivering. Could be seen. Could be heard, could be whatever type of particles into the grinding mill. You're setting that mill up for success and using the cooling conveyor and the ability to control the throughput and the temperature by controlling the speed of the auger by the amount of liquid nitrogen that's going into that.
Tim Lebrecht, Air Products: That's what we do. That's what we work with in our products. And the majority of the time, that's why we do so many trials with our cryogenic grinding so that we can get it just right. Because you don't want to be grinding at the absolute coldest temperature of liquid nitrogen. You're going to go through way too much nitrogen. How do we get you to the right spot? How do we optimize what you're doing? That's that's the core. That's the message. And I think that is the message that we want to really leave you with here is how do you optimize how do you use the latest technology that's available? How do you really build upon stand on the shoulders of those who have come before you? And that's why I say this can be done very quickly. So with their products, I'll speak for myself as the industry manager here in the cryogenic space. I've got individuals throughout the United States where that work for me and that we are standing ready. We're ready to work with you, ready to show you ideas, talk about product lines, hear about your process, what are your challenges, what is the size of your reactors? What what abilities, what what areas within this really can how can we help optimize our make sense doing so? Again, we want to increase your safety.
Tim Lebrecht, Air Products: We want to increase your efficiency. We want to increase your quality of your product, all of those by technology, whether we're creating it new, whether we're doing anything with existing technology. My team and myself, we know those. And if we get those right, you're going to increase your profitability. So I want to steer you here. I want to say thank you for allowing me to speak, but also steer you again to our air products knowledge center and the ability to contact us. So we are at air products, dotcom, hemp. And as we show here, air products, dot com slash help, you can reach myself, you can reach individuals that work for me and our sales team as well. So please note, we do want to show that as we work with individuals in this space, we will be looking for compliance. We can't just talk to anybody. We'll be looking for that show compliance with the applicable state and federal laws. Everybody has to do it that way right now. So I thank you for your time. And I ask that you would take this information and contact myself, contact my team, contact air products, and we stand ready to work with you to increase your safety, your efficiency, your quality and in turn, your profitability. Have a great day. I look forward to hearing from you.