There is a rapidly growing market for the extraction of essential oils from hemp. Customers of this market include the pharmaceutical industry, self-care and cosmetics industries, the nutraceutical industry, and more. Due to the legalization of hemp products in many states, including Oregon, the market will continue to grow. With the US government legalizing the use of industrial hemp in December of 2018, hemp essential oils are now legal to be mass produced with an already extremely high demand. It is estimated that by 2024 there will be $20 billion dollars in retail sales of hemp essential oils in the United States. Vanguard Scientific in Aurora, Oregon is interested in large-scale hemp oil extraction. High Stakes Consulting is working to provide Vanguard Scientific an extraction system capable of processing 10,000 lbs/day of hemp. The capital cost of this project is projected to be $3.8 million, with an estimated net present value of $301 million at a 10% profit margin over ten years. The unit selling price for the essential oil would be $1,023 per kilogram of oil, less than half the estimated selling price given by Vanguard Scientific Inc. at $2250 per kilogram.
The first stage of the process will be the decarboxylation of the oils in the hemp biomass. The biomass will then be divided and sent to four extraction units where R-134a will be used to separate oils, waxes, and terpenes from the cellulose. The loaded solvent will feed to a vapor-liquid separator to recycle the solvent and continue the oil mixture to the next stage. From there, the solvent will be recycled back to the solvent feed stream, while the oil-rich solutions from both separators will be sent to winterization to solidify the fats and waxes to be filtered from the oil. The oil mixture then goes through a distillation process where by-products are separated from the final product oil. The process by-products and biomass will be collected and evaluated for sale potential.