An explosion occurred at about 6:30 p.m. Wednesday in a basement of the marijuana-extraction company Higher Level Concentrates at the corner of Industry and Portway streets. All three people in the basement at the time escaped. Two were taken to the hospital.

The manufacture of butane honey oil is a likely cause of an explosion and fire Wednesday night at Higher Level Concentrates, a marijuana extraction company on the corner of Portway and Industry streets.

Marijuana extracts are made by separating cannabinoids from marijuana with a hydrocarbon-based solvent, such as butane or propane, or by high heat or pressure. An explosion was reported in the area around 6:30 p.m., and afterward, large plumes of smoke could be seen rising from the building.

Multiple fire agencies responded, while police established a perimeter. The fire was contained by 7:20 p.m. Oregon State Police’s Office of State Fire Marshal is overseeing the investigation.

The building is leased by Jason Oei and William “Chris” West for Higher Level Concentrates and a grow operation, High Tide Biological, located in a walkout basement fronting Industry Street. West, 40, and Jacob Alan Magley, 34, were identified as the two people injured in the fire. Both were listed in serious condition at Legacy Emanuel Medical Center’s burn unit. Oei was at the scene when the blast occurred, but was uninjured.

Sweet Relief Natural Medicine, a marijuana dispensary, subleases an adjoining upstairs portion of the building facing Portway Street. Sweet Relief co-owner Oscar Nelson said the dispensary also sustained smoke and possible structural damage and will remained closed through the investigation.

Astoria Deputy Police Chief Eric Halverson said Higher Level Concentrates has submitted applications through both the Oregon Health Authority and state Liquor Control Commission to be a registered processor of marijuana products.

“There are many questions about what was or was not allowed through those processes,” Halverson said in a release today. “Information from the investigation, once complete, will likely be submitted to the Clatsop County District Attorney’s Office for their review.”

Even though Higher Level Concentrates is unregistered through the Health Authority, the company was allowed to process extracts without criminal liability through the end of the year by submitting a full application. Processors can transfer products to registered medical dispensaries. The dispensaries can sell concentrates and edibles to Oregon Medical Marijuana Program patients and primary caregivers.

“This is the first — and I use this term loosely — professional-type processor that has had such an incident,” said André Ourso, head of the state’s medical marijuana program.

Ourso said the Health Authority is awaiting the results of the state fire marshal’s investigation to see if Higher Level Concentrates was following all the rules for processors. The rules include using a closed-loop extraction system and a hydrocarbon-based solvent that is at least 99 percent pure. The extraction must take place in a facility with good ventilation that meets building and fire codes.

If it is found Higher Level Concentrates wasn’t following the rules, Ourso said, the company could risk not being registered by the Health Authority or licensed through the Liquor Control Commission.

Like marijuana dispensaries, most processors are trying to go from the medical jurisdiction of the Health Authority to licensing under the Liquor Control Commission by the end of the year, in order to access the recreational market. As of Jan. 1, medical dispensaries can only sell to medical marijuana cardholders.