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Cannabinoid Extraction Companies

To reap the benefits of the wide variety of cannabinoids, they must first be extracted from the cannabis and hemp plants. Companies can employ various extraction methods depending on the desired end product, concentration, and other considerations. However, preserving the quality and purity of the cannabinoid is crucial, regardless of the method used. Therefore, cannabinoid extraction companies invest significant resources into research and development (R&D) to optimize these processes. Companies—whether they are refining existing extraction methods or pioneering new ones—can realize significant tax savings through the R&D Tax Credit.

The R&D Tax Credit is an activities-based credit. Employee wages, raw materials and supplies, and third-party contractor costs associated with R&D activities are considered qualified research expenses (QREs). Companies can receive refunds of up to 22% of total QREs through federal and state tax credits, depending on the state in which your business operates.

Example activities that qualify:

  • Optimizing extraction/refinement strategies to retain terpenes or reduce their damage
  • Assessing new techniques to enhance cannabinoid potency or purity
  • Scaling up extraction processes
  • Experimenting with proprietary extraction processes
  • Analyzing final products (chemically, chromatographically)
  • Implementing novel extraction procedures to reduce costs and increase efficiency
  • Designing and manufacturing first-article extraction and/or distillation equipment

Do you have these job titles on your payroll, or do you hire third-party contractors to do these jobs?

  • Analytical Chemists
  • Chemists
  • Director of Extraction
  • Distillation Managers
  • Extraction Engineers
  • Extraction Operators / Technicians
  • Laboratory Technicians
  • Scientists

Use our Hemp Tax Calculator to estimate your potential benefit, and partner with HempTax to claim your benefits with no up-front costs. Contact one of our experts today.

Want a quick estimate for your company?

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Got questions? Schedule a quick call with an R&D expert.

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How much could I get back in R&D tax credits?

Great question! Try out our R&D Tax Credit Calculator to see the value of your R&D tax credit reward.
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