In a tightening cannabinoid market, Red Mesa Science & Refining is disrupting the industry by forging direct relationships with hemp farmers and extractors, cutting out intermediaries and significantly reducing costs. This innovative approach, championed by President Jeff Applegate, prioritizes quality, consistency, and fair compensation for all stakeholders. By streamlining the supply chain and focusing on efficient, around-the-clock refinement, Red Mesa is not only lowering prices but also ensuring a higher-quality product for consumers and manufacturers alike. This strategy positions them as a leader in the minor cannabinoid market, capitalizing on a growing demand for less-common cannabinoids like CBN and CBT.
Key Takeaways: Red Mesa’s Disruptive Approach
- Direct Relationships: Red Mesa bypasses brokers, fostering direct relationships with farmers and extractors, reducing costs by up to **15%**.
- Cost Efficiency: The company views production costs as “**leverage instead of a liability**,” prioritizing optimization and fair pricing for all.
- High-Quality Minor Cannabinoids: Red Mesa specializes in refining rare cannabinoids like CBN, CBT, and CBL through a botanical, non-synthetic process, offering a superior product.
- Commitment to Quality: The company adheres to “**The Red Mesa Standard**,” maintaining high standards through end-to-end ISO certification and voluntary FDA registration.
- 24/7 Operation: With a large-scale facility operating around the clock, Red Mesa is uniquely positioned for significant growth and international expansion.
Leverage Instead of Liability: Cutting Out the Middleman
Jeff Applegate, Red Mesa’s president, highlighted the detrimental effects of brokers on the hemp supply chain. “Brokers often impose additional costs, sometimes up to **15%**, which can hinder farmer’s profits and drive up expenses for manufacturers,” he explained in an exclusive interview with Benzinga Cannabis. This inefficient model leaves both farmers and manufacturers struggling. Red Mesa’s direct approach changes this equation. By working directly with growers and extractors, they are able to maintain competitive production costs, ensuring both quality and profitability.
“Keeping production costs low is fundamental to industry success,” Applegate stressed. “Collaborating directly with farmers and extractors in a cohesive supply chain is essential to keep our cost of input as a leverage instead of a liability.”
The Challenges of Hemp Farming
Sourcing consistent and affordable raw materials presents a significant challenge within the hemp industry. The initial oversupply in 2019 led to a sharp decline in hemp farming as prices plummeted, resulting in fewer farmers today. “There was an abundance of farmers when the 2018 farm bill was put into place,” Applegate noted. “The market, the producers, wasn’t sufficiently equipped to take all of the output that came. Since 2019, we’ve had nothing but a declining number of farmers.” He emphasizes that hemp is “**not an easy crop to grow at all**”, requiring significant processing before extraction, unlike the more directly marketable cannabis flower.
Inside Red Mesa: A Look at the Refinement Process
Red Mesa’s Utah facility, originally a cabinet shop, now houses a sophisticated hemp refinement operation. Its high power capacity, crucial for the energy-intensive machinery, makes it uniquely suited for this purpose. The process itself is a carefully orchestrated flow, starting with crude oil intake, moving through a series of distillations, crystallizations, and chromatographic separations.
Applegate described the transformation: “In distillation, we have the finished product. It’s usually a light yellow to golden color, thicker in viscosity than water, almost syrup-like when warm.” After crystallization, the distillate becomes a “white, fluffy powder—ready for B2B sale.” He emphasizes that their focus remains on **”creating the most coveted, consistent outputs to win the market,”** rather than venturing into finished goods production.
A Competitive Edge in Minor Cannabinoids
Red Mesa’s botanical, non-synthetic refinement process is what truly sets them apart. They isolate less common cannabinoids – such as **CBN, CBT, and CBL** – directly from hemp, **without relying on chemical conversions.** This method allows for the production of exceptionally pure and high-quality products. “Our botanical refining process generates final outputs derived directly from the hemp plant without the use of catalysts and acids required for chemical conversion processes,” Applegate explained.
This level of expertise required significant upfront investment. “To be the first refiner able to effectively offer rare minors such as CBN, CBL, and CBT at kilogram scale, we had to make significant investments in large-scale chromatography very early in the company’s history,” Applegate stated.
The Red Mesa Standard: ISO Certification and FDA Registration
“The Red Mesa Standard” encompasses their commitment to quality and consistency. This includes end-to-end ISO certification—a level of commitment that sets them apart from many competitors. “We have an end-to-end certification from the beginning of our business to the end,” Applegate proudly explains. Even though it is not legally required, Red Mesa has also voluntarily registered with the FDA as a food ingredient company, further demonstrating their dedication to stringent quality control.
24/7 Operation and Future Plans
Currently operating at approximately **45% of its 50,000-square-foot facility**, Red Mesa is strategically positioned for significant expansion. “We operate **24 hours a day, seven days a week**,” Applegate shared, detailing their gradual transition from single-shift to continuous operation. This round-the-clock productivity is crucial to meeting growing demand and fulfilling ambitious expansion plans.
Their outlook includes substantial growth within the industry and venturing further into the international markets. “We want to grow, of course. We also plan to enter the Japanese market in 2025 and establish regional distribution hubs to serve our customers more efficiently and worldwide.”
However, beyond market expansion, Applegate highlights the significance of regulatory reform as a catalyst for industry growth. “**The lack of clear rules for cannabinoid production is probably the biggest barrier we’ve seen to adoption.** To bring prices down and make cannabinoids more accessible, we need efficient production coupled with thoughtful regulation,” he stated, emphasizing that a cohesive regulatory environment will be key in making cannabinoids accessible to a wider consumer base.
