You can grow marijuana to get the cannabinoids in the plant that are increasingly being touted as having wide-ranging medical benefits. Or maybe you can just make the cannabinoids in a lab.
Cannabis company Cronos Group and Ginkgo Bioworks announced on Tuesday a deal to genetically engineer the highly-sought-after compounds. The companies say they’ll work to identify rare cannabinoids that appear in small quantities in the marijuana plant, extract the DNA and produce the cannabinoids in a lab.
Cronos shares were up more than 15 percent in trading on the Toronto Stock Exchange Tuesday morning on the news.
“The potential uses of cannabinoids are vast, but the key to successfully bringing cannabinoid-based products to market is in creating reliable, consistent, and scalable production of a full spectrum of cannabinoids, not just THC and CBD,” said Mike Gorenstein, CEO of Cronos Group. “We are thrilled to partner with Ginkgo; their biological engineering capabilities and disruptive technology platform are unrivaled. Together we can revolutionize the cannabis industry.”
SIMILAR TO BREWING BEER
“By transferring the DNA sequences for cannabinoid production into yeast, Ginkgo expects to develop strains that produce cultured cannabinoids at high quality and purity in a process similar to brewing beer in a microbrewery,” Ginkgo said in a press release. “In addition to allowing for the efficient and scalable production of cannabinoids, the use of Ginkgo’s platform is expected to unlock access to potentially medically-important and valuable cannabinoids that are present only in low quantities in the plant.”
The companies said Cronos will put $22 million (U.S.) into new R&D efforts by Ginkgo. Cronos will issue $100 million worth of common stock shares, with plans to eventually slice the stock up into tranches.
“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 Jason Kelly, CEO and co-founder of Ginkgo Bioworks. “Engineering strains of yeast that can produce these cannabinoids via fermentation is a perfect fit for our organism design platform and we are excited to be working with Cronos Group as they lead the way to high-quality cannabinoid treatments.”