Toll processing (aka ‘tolling”) refers to a supply chain service where a client procures and delivers raw materials (i.e., feedstock) to a third-party (Toll Processor) who performs a specialized production activity in exchange for a fixed fee (aka “toll”).
The graphic below illustrates a typical toll processing agreement to help understand the moving parts.
Let’s say. Company X is a cosmetics business that has decided to launch a line of CBD-infused skincare products. However, Company X recognizes that it must purchase extraction equipment, hire qualified personnel, establish quality controls and a compliance environment that aligns with the CBD industry. Getting this in place would require a significant capital investment and time in order to build CBD extraction capabilities from “scratch”..
An alternative to in-house production is to enter into a tolling agreement with a hemp extraction company where Company X purchases a given quantify of CBD crude oil and pays a fixed fee to convert the crude oil into distillate. The distillate is then shipped to Company X [by the Toll Processor] so that they can infuse it into their skincare care products for sale to its end-use customers.
Split tolling is a tolling variant where the Toll Processor processes the feedstock in exchange for an agreed upon share (aka “split”) of the finished product and Company X pays a discounted toll.
Common splits are 50:50 but we can customize splits based on market prices and budget needs. We also offer free tolling for customized splits based on certain finished products.
Example of How Split Tolling Works
Let’s say that Company X purchased 100kg of crude oil (Product A) at a price of $150/kg for a total cost of $15,000. Per the tolling agreement, Company X has agreed to pay the toll processor $100/kg to convert the crude oil into distillate. The crude oil has a 70% CBD concentration, so Company X expects to receive approximately 70kg or liters (70% * 100kg) of distillate (Product C) with 90%- 95% CBD concentration.
Company X pays a tolling fee totaling $100/kg * 100kg of crude oil = $10,000. The total cost to process 100kg of crude oil = $10,000 (toll) + $15,000 (crude oil) = $25,000.
If, the current market price of CBD distillate ranges between $1,000 – $1,500 (Full – Broad Spectrum). Company X would’ve paid $70,000 – $105,000 for distillate outright but instead saved $45,000 – $80,000 through tolling.
The significant cost savings is tolling’s main value proposition because the numerous supply chain “middlemen” involved in the production of CBD distillate are eliminated.
Our Tolling Services
We offer four tolling service categories (post-extraction) in both prevailing major and minor cannabinoids today:
|Tolling Service||Method||Description||Favorable Characteristics|
|Distillate||Wipe Film Evaporation||Converts hemp-derived crude oil into [compliant] full spectrum distillate comprising 70% - 85% CB”X” and 90%+ total cannabinoids||- Maximum profile of cannabinoids - High popularity in vaping, edibles and topicals|
|THC Remediation||Convert THC to CBN (solventless)||Converts hemp-derived crude oil into non-detect (ND) broad spectrum distillate comprising 70% - 85% CB”X” and 90%+ total cannabinoids, with 0.00% PPM THC||- Full profile of cannabinoids - Remote potential for intoxication - Remote potential for failing employee screening tests - High popularity in edibles and topicals|
|Isolation||Crystallization||Dissolve distillate in a "Generally Recognized as Safe" (GRAS) solvent and cooled to sub-zero temperatures to crystallize cannabinoid.||- Non-intoxicating - No detectable THC for employee screening purposes - Expansive infusibility potential|
|Emulsion||Ultrasound Emulsification||Apply ultrasonic waves to distillate or isolate to create nanoparticles and mixed with a fatty emulsifier for compatibility with the water in the bloodstream.||- High bioavailability when ingested - High infusibility potential for food and beverage|
Crude Oil Quality Standards
Crude oil quality varies widely due to variables such as farming practices, equipment sophistication, solvents, and workforce experience. Distillate quality is directly correlated to its feedstock and we have established a set of quality standards that ensures our clients receive the purest, but most importantly, the safest oil for human consumption.
Any feedstock procured by the client must meet the following quality standards:
- Sourced from a USDA certified organic farm
- Denatured ethanol prohibited
- Stage 4 filtration completed (an extra charge will be assessed for non-filtered feedstock)
- Process by a cGMP-compliant / certified facility
- Full chain of custody documentation (biomass to crude oil)
- Certificate of Analysis (COA) issued by a DEA-approved lab
- >60% CBD potency
- <0.3% THC potency (on a dry weight basis)
As a free service to our clients, we can procure crude oil from select suppliers on their behalf, subject to approval by the client.
Why Toll with Elysian OilWorx?
We believe the key difference driving our value is our relentless discipline in controlling operating costs. We deliver unparalleled value that is unmatched:
- Use only USDA certified organic and non-GMO materials
- All processing equipment is UL/ETL certified
- FDA registered facility and cGMP compliant (certification pending)
- Low Minimum Order Quantity (MOQ) – 10kg
- All orders include a COA issued from a DEA-approved lab
- All delivered products are packaged in food-grade borosilicate glass bottles or UN certified aluminum containers
- On-time delivery based on reserved production schedule
- Free onsite storage
- Complimentary invitations to special events promoting education and informed decision-making
- Opportunity to become a member of our R&D team as a product tester
- A portion of sales is donated to charitable organizations dedicated to wellness and self-care