The world is rapidly changing, demanding that higher quality, less expensive, food and drugs and other high compounds be produced sustainably. The challenge is being met in a significant way through cross-pollination of biosynthesis, engineering and DNA research.
According to the Raymond James Cannabinoid Biosynthesis Report: “Biosynthesis is the production of molecules by living organisms.” This happens naturally, every day, in every organism, but engineers have learned to harness these powerful biological manufacturing systems to produce specific materials for humanity’s benefit- things we want, like vanilla or fragrances or detergent or medicines. By engineering the instructions for these materials’ production into the genetic code of simple organisms—e.g., bacteria, algae, yeast and other fungi—they can acquire the novel ability to produce molecules they usually wouldn’t. A cornerstone technology of the bio revolution, biofuels- yesterday’s vanguard of the bio revolution. First came biofuels in the early 2010s: visions of massive tanks and ponds of engineered microbes like algae, yeast, bacteria, all designed with the singular purpose of becoming factories that promised to manufacture large-scale fuel replacements more reliably, more sustainably and less expensively, offsetting the world’s dependence on fossil fuels. But then came the end-game- the oil price crash of 2014/15. While very few companies survived, those that emerged from the ashes did so as bearers of broad institutional knowledge, deeply experienced teams, and powerful intellectual property.
Cannabinoids: Today’s Bio Revolution
The production of cannabinoids—in our view—represents a flagship application for bio-driven processes: highly valued, low (but growing) volume molecules, difficult to access in nature, but demanded by large global markets for a massive diversity of end uses. We stand at the perfect moment in history: a beautiful era of computational, mechanical, and biological technology convergence. We believe bio’s success in providing access to pure, consistent, stable, and scalable sources of cannabinoids to large CPG and Pharma companies—beyond the “cottage industry” that is cannabis today—could bring about a renewed wave of innovation and investment into bio-based technologies, not seen since biofuels.
A Bio Revolution Accelerant
“Simply scaling up our current tools and technology will not solve the daunting challenges that face us globally,” Professor Susan Hockfield writes in her 2019 book The Age of Living Machines. Her reflection was informed by humanity’s means of escaping the horrors of Malthusian catastrophe predicted to unfold during the 19th century by way of significant, previously unimagined technological advances. Today, we face similarly daunting global challenges. She—and we—believe these challenges may be met, again, by revolutionary advances in today’s robust suite of technologies: “Biology and engineering are converging in previously unimaginable ways, and this convergence could soon offer us solutions to some of our most significant and seemingly most intractable problems.”
The Bio Revolution is Upon Us
How humanity has solved problems using biology, over centuries, has come in increments—some truly fantastic (penicillin, insulin, vaccines)—but today, we have reason to believe that bio-driven insights, innovations, and solutions will soon come in torrents, changing the equation forever. (If you won’t take our word for it, take McKinsey’s, or BCG’s, or The Economist’s.) What do we mean by ‘bio’? All that is involved in leveraging the power and diversity and efficiency and complexity inherent in nature—in biology—to solve the world’s most challenging problems. Why now? The bio revolution is coming as a result of breakthroughs in biological science and the benefits this field enjoys from decades of compounding advances in physics, electronics, computing, data science, diagnostics, automation, materials science, and a multiplicity of other seemingly incongruent fields. Today, they converge at bio.
How it works is pretty simple. Not easy, but simple. The high level view of the process is taking water, sugar and yeast through a fermentation process targeting specific cannabinoids. There are several companies that are competing in the Biosynthesized Cannabinoid market: Demetrix, Cronos, CREO, Willow Bio, Biomedican and several others. Some are in, or approaching, large-scale production.
Photo by Artem Podrez from Pexels
Three major problems to produce biosynthesized cannabinoids:
- Yields: Low yields mean high prices. Most companies have 1% dry cell mass yields or less over a six-day period.
- Olivetolic Acid production: OA is a critical component in producing biosynthesized cannabinoids. Only two companies in the world have patents for Olivetolic Acid- Aurora Cannabis and Biomedican. All others will have to license from Biomedican, Aurora Cannabis or buy Olivetolic acid in the market. Olivetolic Acid is currently $5-$7 dollars a gram or non-competitive for the cannabinoid market.
- Conversion of CBGA: Many companies can produce CBGA, which is what everyone starts with before converting it into other cannabinoids. CBGA converts into CBG easily but is challenging to convert into other cannabinoids. Most companies in this space are able to produce a couple of cannabinoids and terpenes; Biomedican has the platform to be able to convert into almost all 200 cannabinoids and 150 terpenes.
Conclusion
Cannabinoids will be a major factor in health, wellness and therapeutics in the future. Biosynthesis offers the ability to produce higher quality, lower cost, bio-identical, organic cannabinoids utilizing 90% less natural resources and energy. Quality and consistency will allow these cannabinoids to be distributed into multi-different market vertices such as pharmaceuticals, food and beverage, nutraceuticals, cosmetics and pet care. This is the beginning of the beginning and the upward trajectory looks amazingly large.
Dennis O’Neill is the President of Biomedican, the leader in biosynthesized cannabinoids. He has over 30 years experience as an Investment Banker. He helped start two of the largest regional Investments banks in Chicago then went on to Managing Director for Softbank Investments/ E2Capital office in Chicago and raised over 2 billion dollars in capital for early stage companies to date.
