Using Denatured Ethanol in CA Licensed Market

Hey so I know someone in the licensed market in CA and they are weighing the option of using heptane denatured ethanol for extraction/winterization. What kind of risk is this? Is anyone regulating this? Is removing the heptane once it is in the facility illegal or would that be a potential solution for avoiding the alcohol excise tax? It seems somewhat pedantic to disallow denatured when the constituents will be removed and then tested for by the State COA. What if they just wanted to use pure heptane to extract (just hypothetically speaking to prove a point), is there anything that says they couldnt do that? I’m curious if the food grade requirement has any legal basis in your guys eyes.

From what the CDPH told me, any hydrocarbon used for extraction or processing requires a Type 7 license. This would include denatured ethanol used for winterization.

They have a Type 7 license.