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In common with other mushrooms and in agreement with its use in Traditional Chinese Medicine (TCM) Lion's Mane mushroom extracts are mainly produced by hot-water extraction. However, with the growing emphasis on its neurological benefits and the realisation that the main compounds identified as contributing to its action in this area are more readily soluble in solvents such as alcohol there has recently been an increase in alcohol extraction, with the alcohol extract sometimes combined with the aqueous extract as a 'dual-extract'. Aqueous extraction is typically carried out by boiling for 90 minutes and then filtering to separate the liquid extract.

Sometimes this process is carried out twice using the same batch of dried mushroom, the second extraction giving a small increase in yield. Vacuum concentration (heating to 65°C under a partial vacuum) is then used to remove most of the water prior to spray-drying.

As Lion’s Mane aqueous extract, in common with extracts of other edible mushrooms such as Shiitake, Maitake, Oyster Mushroom, Cordyceps militaris and

Agaricus subrufescens contains not just long chain polysaccharides but also high levels of smaller monosaccharides, disaccharides and oligosaccharides it cannot be spray-dried as is or the high temperatures in the spray-drying tower will cause the smaller sugars to caramelise into a sticky mass that will block the exit from the tower.

To prevent this maltodextrin (25-50%) or sometimes finely powdered fruiting body will usually be added prior to spray-drying. Other options include oven-drying and grinding or adding alcohol to the aqueous extract to precipitate the larger molecules which can then be filtered off and dried while the smaller molecules remain in the supernatant and are discarded. By varying the alcohol concentration the size of the polysaccharide molecules precipitated can be controlled and the process can be repeated if necessary. However, discarding some of the polysaccharides in this way will also reduce the yield and so increase the price.

Another option that has been researched as an option for removing the smaller molecules is membrane filtration but the cost of the membranes and their short lifespan due to the tendency of the pores to get clogged makes it economically unviable for now.