Green Dragon is an alcoholic beverage made by leaching the leaves of the cannabis plant in a high-proof alcohol, most commonly vodka. The THC dissolves into the alcohol resulting in a dark green or brown liquid. Sugar is often also dissolved in the alcohol to mask the extremely bitter taste of the extract.
Green Dragon is a method for extracting the active ingredients found in cannabis buds. These chemicals, mainly tetrahydrocannabinol or THC, are not very soluble in water, but much more soluble in organic solvents such as alcohol. In addition, the chemicals responsible for the bitter and "grassy" taste of cannabis buds are insoluble in alcohol, but more soluble in water. Chlorophyll is soluble in alcohol. Baking (as in "drying") the dry buds and leaves prior to adding them to the alcohol in either method increases the potency of the resulting preparation. This is because the baking process converts the inactive tetrahydrocannabinol acids into the active THC (see decarboxylation).