Canadian cannabis producer Cronos Group has teamed with Boston’s Ginkgo Bioworks to produce a wide spectrum of cannabinoids, but instead of using soil or rockwool, they’ll be growing cannabinoids with yeast.
According to a statement released Tuesday, the two companies have agreed on a plan to merge their two areas of expertise into one effort bound to pump out a variety of cannabinoids, in an industry set to be valued over $32 billion in five years.
The companies say that they’ll focus on creating cannabinoids beyond THC and CBD, because these more obscure cannabinoids are present only at very low quantities in the cannabis plant, making them economically impractical, difficult or impossible to extract at high purity and scale. So, instead of growing fields of plants that offer a minuscule percent of a cannabinoid such as THCV, Cronos and Ginkgo believe their partnership will create a process that’s more economically viable.
“Cronos Group is building the world’s most innovative cannabinoid platform,” said Mike Gorenstein, CEO of Cronos Group, in the press release. “The potential uses of cannabinoids are vast, but the key to successfully bringing cannabinoid-based products to market is in creating a reliable, consistent and scalable production of a full spectrum of cannabinoids, not just THC and CBD.”
This is not the first effort of a Canadian company to grow cannabinoids on yeast. For example, in 2016, the Montreal-based company Hyasynth successfully grew cannabigerol (CBG) from yeast.
Ginkgo Bioworks‘ CEO and Founder Jason Kelly said that his company will be producing rare compounds found in the cannabis plant by genetically engineering the cannabis DNA into yeast that will then be grown in a laboratory.
“Legal cannabis is a multibillion-dollar industry with no signs of slowing down, but providers will need to innovate to keep up with demand for better products, including those taking advantage of rare and difficult to extract cannabinoids,” said Kelly, “Engineering strains of yeast that can produce these cannabinoids via fermentation is a perfect fit for our organism design platform.”
So how will they actually accomplish creating cannabinoids on yeast?
The words “genetic modification” or “GMO” don’t appear in the company’s press release, but Ginkgo does admit they’ll be using genetic engineering, which is essentially the same thing. Ginkgo says they are in possession of the largest library of designed DNA sequences on the planet and that they will be using DNA sequences for cannabinoids and engineering them into yeast strains.
After they transfer the DNA sequence for producing cannabinoids into yeast, Ginkgo says they’ll be able to develop further yeast strains to produce a wide range of cannabinoids in a laboratory.
Cronos plans to fund the process to the tune of $22 million as the research and development makes it to certain milestones. After Ginkgo demonstrates that the freshly spliced microorganisms are capable of producing the target cannabinoids above a minimum productivity level, Cronos Group says it plans to issue up to approximately 14.7 million common shares. According to both parties, if everything goes to plan, the transaction will have a $100 billion value.
It’s worth noting that many cannabinoids themselves are still federally illegal in the United States regardless of which plant they are grown on. However, in Canada — where Cronos is located, the federal government’s adult-use market is about to come online in October.
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