Artisanal Cannabis Extraction – An Interview with Precision Founder Nick Tennant

Cannabis and hemp derived concentrates are a fast developing product or service classification. Shaped by extracting cannabis making use of a selection of procedures which includes ethanol, butane hash oil and CO2, concentrates obtain their way into customer packaged products as ingredients for infused products or as stand-by itself solutions these types of as resins, rosins, distillates and hash.

Precision Extraction Options (Precision) was started in 2014 to present equipment and expert services to cannabis and hemp processors. In Oct 2021, Agrify (NASDAQ: AGFY) acquired Precision in a $50M income and stock offer. The shift positions Agrify to give close-to-stop infrastructure answers for cannabis cultivators and processors.

We interviewed Nick Tennant, SVP of Innovation at Precision, now a division of Agrify. Nick launched Precision after looking at a have to have for high quality products in focus processing. Prior to Precision, Nick was associated in a vertically integrated cannabis enterprise in Michigan where he gained expertise in cultivation, extraction and retail.

Aaron Eco-friendly: How did you get included in the cannabis market?

 Nick Tennant: I’ve been in hashish about 17 yrs now. I had family members in Colorado and California who I started to interface with about 2006. Close to 2008, Michigan passed their cannabis regulation, and we ended up a person of the first firms to get certified. The subsequent five a long time from that regulation having passed, up to 2013, I did quite considerably all the things in phrases of commercial hashish – cultivation, retail, edible manufacturing, you title it. Concentrates did not truly exist in a meaningful way the products and solutions undoubtedly had been there, but the technology was not. I seemed at engineering at the time and it was pretty primitive, so we created a shift to focusing on concentrates. We released Precision in 2014 and we in essence shot out of a cannon, executing a million pounds in revenue in our very first 90 times. Considering that then, we grew the corporation up to 60 workers and sizeable quantities of income. We marketed Precision to Agrify in Oct of this year.

Eco-friendly: Notify me about that changeover from a hashish merchandise business to an products maker.

Nick Tennant, SVP of Innovation at Precision Extraction Remedies

Tennant: It was a gradual changeover. As I started to see the extraction niche increase, I really started off to place much more time and assets into it. When we introduced Precision and ended up achieved with these kinds of achievements in just the initially 90 days, I realized that I had to abandon every thing else I was doing to emphasis on this. My former companions took more than the organizations, like the grows. We labored out personal instances concerning how I was heading to depart all those companies and concentrate total time at Precision.

Green: So, large information not too long ago with the acquisition, congratulations on that! Convey to me about Agrify and why a deal with Agrify built feeling to you.

Tennant: The strategic rationale is that we are giving an conclude-to-close infrastructure remedy. They have the horticultural facet, an exceptional general public automobile, and a lot of cash on the harmony sheet to proceed to scale the small business and get additional constituents in just the hashish infrastructure. Acquiring to the place the place you can exit the enterprises, it is a very long highway, and our enterprise is really niche. We were searching for to husband or wife with t a bigger participant in the field with extra means that would help us to scale what we were seeking to do, and Agrify was the best fit.

Eco-friendly: You have acquired many locations of focus at Precision ranging from ethanol extraction, distillation, and butane hash oil (BHO) extraction. In which are you focusing the company going forward?

Tennant: Going forward we want to provide that stop-to-finish one-cease shop infrastructural answer for any cannabis items company. We want Agrify to grow to be the dominant and fastest rising player in the hashish marketplace for infrastructural alternatives, no matter whether that’s horticulture or extraction. We’re continuing to extend our products portfolio into other niches so that if you’re setting up a cannabis facility, you only need to have to occur to a single corporation and the system is as very simple as achievable.

Eco-friendly: What sorts of products and solutions are you looking at the buyer gravitate toward?

Tennant: I imagine that hashish will continue to be to be quite artisanal due to the fact of the uniqueness of the plant. If you glance at comparable industries, I could examine it to craft beer or winemaking. I think that hydrocarbon and water hashes will go on to engage in a significant part. I also consider that ethanol and distillate-dependent goods will keep sector share just like the Budweiser and Kendall Jacksons of the globe.

People today adore the native kind of essence of the plant, that this is a plant kind of bestowed upon us by the universe with all these exclusive therapeutic and restorative homes. I imagine that hoping to capture these homes and that indigenous essence of what is likely on in the genome of the plant and translate that into a product is heading to be the topic that proceeds to dominate, and I assume that for various factors. For the same rationale any individual will go to Total Food items, and they’ll purchase the area organic and natural grown fruit or veggies, persons are heading to gravitate in direction of artisanal hashish solutions. Men and women that take in cannabis, generally talking, are far more naturalistic or homeopathic than most.

Green: Precision has engineering for a selection of extraction strategies where by the concentration has been on hashish. Are you seeing any new marketplaces outside the house of hashish?

Tennant: Sure. We’ve dealt with versions of various botanical extraction businesses in excess of the several years, but they are a incredibly modest phase of our enterprise. We’re a cannabis enterprise. Non-cannabis extraction may well make up much less than 1% of our small business so it is very little.

Inexperienced: What traits are you pursuing in the hashish industry?

Tennant: Consolidation, I would say, is a massive one particular. MSOs are consolidating and getting up the tiny gamers. The 2nd big development is regulation, and what’s heading on in DC. Outside of that, you certainly have new states coming online, shifting shopper developments, issues like that. I would say these last two are less impactful from a macro standpoint, but even so, still matters that we stick to.

Environmentally friendly: Adhering to up on consolidation, do you see a demand from customers for larger sized methods now?

Tennant: I’d say 95% of what we do is below 2000 lbs a working day, which we take into account artisanal. You’re not going to see huge scale output consolidation for the reason that you have fragmentation by state. It would be most productive for a hashish company to manufacture every little thing in a person locale but it’s just not possible with the state rules. It’s extremely fragmented. Somebody like a Trulieve may well have 20 unique manufacturing operations, all managing equivalent processes. Maybe we will see much more upon national legalization and the opening of condition borders.

Inexperienced: What in your particular life or in the hashish sector are you most fascinated in learning about?

Tennant: I am consistently studying. Which is just how my mind is, and the type of man or woman that I am.  I’m interested in a range of topics, but I assume I’m most intrigued in how capital marketplaces are likely to materialize and substantiate about the federal legalization for the reason that we’re in this unusual space of hashish. It is odd, simply because you have a growth marketplace which is generating substantial amounts of income and huge quantities of tax dollars, but you will have to remind your self that there is no actual liquidity in this market place, that means you simply cannot finance items. A standard hashish company that desires to go out and get money is obtaining charges amongst 16 to 18%. There is just a cash restriction given that hashish is a Program I compound, and these large loan companies don’t want to enjoy into that.

The dilemma in my head and the massive catalyst for the total market is: what happens when we get a descheduling, decriminalization and/or legalization on a federal stage? How does that impact the large money sentiment to deploy this zero-curiosity fee money that we’re observing in the rest of the entire world? We’re observing it in home loans. We’re observing it in every single facet of the globe. There is free money printing, but it is not flowing into hashish since individuals federal regulations are prohibiting it as these kinds of. Ultimately, as more infrastructure comes on line, these firms are not going to have to scrape by to build a $3 million lab. They can finance it at a acceptable fascination level, and the infrastructure can arrive on the net.

Which is going to be much better for the client. There will be far more infrastructure, a lot more merchandise, much more exploration and advancement, a lot more retail areas. Almost everything receives much better, a lot more handy, and much more robust. I would think that finance fascination premiums are the major lever within the sector right now, and mainly because of that, you will probably see cannabis capital markets go very mad when legalization comes around.

Eco-friendly: Ok, excellent. That concludes the job interview.

Tennant: Many thanks, Aaron.