Socati acquires Blue Marble Biomaterials leading to mass scale production and quality control of broad spectrum hemp extract

15-May-2019 - Last updated on 15-May-2019 at 17:11 GMT

Nastasic

Hemp extract processor, Socati Corp.'s acquisition of Blue Marble Biomaterials, a global manufacturer of specialty compounds for consumer goods, will usher in mass scale production and quality control of in-demand broad spectrum hemp extract (which includes CBD among other cannabinoids).

The growing demand and interest in formulating products with CBD looks to be the next industry gold rush, but in terms of quality control and producing the ingredient at any sort of mass scale, the environment feels closer to the Wild West.

As deputy editor Hank Schultz of our sister publication NutraIngredients-USA puts it: "The category will have to be imbued with a great deal more scientific rigor, more attention to quality and, frankly, just more basic professionalism before regulators can take it seriously."

While the jury is still out on reliable scientific evidence on what health benefits CBD actually has or promotes, the industry can address quality control. From a regulatory standpoint, FDA does not permit CBD isolates for use in food, beverage, and supplement products, but the agency hasn't provided its position (yet) on broad spectrum hemp extracts. The FDA is holding a meeting on May 31 to explore CBD and cannabis-derived products' legal path to market.

"Generally speaking, the whole industry has to unite around transparency, accuracy, and accountability. I think if everybody in the space can be governed under those same standards, we’re in good shape," Socati chief revenue officer, Mark Elfenbein, told FoodNavigator-USA.

'We’re trying to define the broad spectrum space'

A Google search of CBD and hemp extract producers will yield plenty results for a consumer brand looking to purchase and formulate with the ingredient and its various forms, but Elfenbein claims that Socati is among the first to address the type of supply needs major companies looking to enter this space need such as ensuring that its broad spectrum hemp extract has below lab-detectable levels of THC.

"We’re trying to define the broad spectrum space," Elfenbein said. "It’s really all about quality control and enabling mass scale. I think those are the two most important things."

"Companies are trying to offer something they call broad spectrum hemp extract, but usually there’s a shortfall on it. Either they can’t manufacture it any mass scale, or it's closer to a CBD isolate, or they’re finding there’s a detectable level of THC in it," he said.

Socati's proprietary extraction and processing technology ensures that its broad spectrum hemp extract has below lab-detectable levels of THC -- a much lower amount than the legal standard of 0.3% THC commonly found in the market, said Elfenbein -- while keeping CBD and other cannabinoids intact.

The acquisition of Blue Marble will give Socati access the company's 22,000-square-foot food-grade production facility in Montana which houses an advanced analytics laboratory with a team of chemists, microbiologists, and engineers specializing in biomimetic techniques, microbial polyculture, and natural product development.

Prior to the acquisition, the Montana-based biotech firm had developed its own proprietary process for producing broad spectrum hemp extract using fermentation-derived alcohol as a solvent.

Asked whether Blue Marble will continue to pursue its extraction process for hemp extract, Socati Montana general manager (formerly CEO of Blue Marble) James Stephens said, "It’ll be complementary or supportive, but the primary focus will be deploying Socati’s unique technology in the space while adding value into their ecosystem based on all the innovation that Blue Marble has developed in the past on the flavor and fragrance side."

Specifically, Blue Marble will assist Socati with scaling up its supply of its broad spectrum hemp extract as well as formulation expertise such as flavor pairings.

When upgrades and the expansion are complete in the fall, the facility will feature a state-of-the art, mass-scale manufacturing process capable of processing 10 tons of hemp feedstock per working day.

"We will be able to substantially meet a big portion of the demand for broad spectrum hemp in 2019 and 2020, all from that facility," Elfenbein added.

'There will be a shakeout of some of the brands out there'

According to market research firm, The Brightfield Group, the CBD market is expected to reach $22bn by 2022, growing nearly 40 times the size it is today ($619m in 2018).

Elfenbein believes that major CPG companies from food and beverage to cosmetics and personal care brands are at some level of R&D with CBD and planning for the right time to release CBD-infused products (largely dependent on the upcoming FDA public hearing on May 31st).

In the past few months, retailers including CVS and Walgreens, announced future plans to carry 'CBD-infused' personal care products, and Oreo-maker Mondelez said it exploring adding CBD to its snack products.

Again, the real issue moving forward is finding a supplier that can consistently provide a quality product with non-detectable amounts of THC at scale, which is an unmet need in the market, according to Elfenbein.

"I think there will be a shakeout of some of the brands out there that don’t have that level of transparency," said Elfenbein.