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Biosynthesis: The Science That May Unlock the Medical Potential of Cannabis

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Attitudes are changing fast on cannabis, and investors are taking note.

With the birth of legal recreational markets in places like California and a growing appreciation for the medical applications of cannabinoids such as CBD, the floodgates are open for companies to pursue new and groundbreaking opportunities in the sector.

Unlike other fields where medical research has been mainstream for many decades, the work behind cannabis – an incredibly complex plant – is only getting started.

Untapped Potential

Today’s infographic comes from InMed Pharmaceuticals and it explains the medical potential behind the 90+ cannabinoids that we have yet to fully understand.

It also details a scientific process known as biosynthesis, which helped revolutionize the production of insulin for diabetics. A process such as this may be a key in unlocking the medical potential of understudied cannabinoids.

Biosynthesis: The Science That May Unlock the Medical Potential of Cannabis

The medical benefits of cannabis are many, and scientific research is being conducted to explore the application of the plant in several disease categories, including multiple sclerosis, seizures, glaucoma, cancer, Alzheimer’s, and migraines.

However, this is just the tip of the iceberg. To understand the full potential of the cannabis plant, you need to know what cannabinoids are, and how they work.

The Human Endocannabinoid System

Like all mammals, the human body is loaded with natural cannabinoid receptors.

These receptors interact with cannabinoids, which occur naturally in the human body, but also in the cannabis plant.

Type of CannabinoidDescription
EndocannabinoidsMade in the human body
Plant cannabinoidsFound in the cannabis plant
Synthetic cannabinoidsManufactured artificially to mimic natural cannabinoids
Biosynthesized cannabinoidsBiofermentation process using E. Coli-based system, which creates cannabinoids identical to those found in nature

Some cannabinoids you may know include THC and CBD – and they have a wide variety of applications. They also make up the majority of cannabinoids (by volume) that can be easily extracted from the plant.

However, there are actually 90+ other cannabinoids that have potential medical benefits as well, and they make up less than 0.1% of total biomass. Because they are so difficult to isolate, they remain understudied in medicinal science.

A Problem of Volume

With only a tiny portion of the cannabis plant having medicinal value (the cannabinoids), a large degree of biomass must be harvested to extract even small amounts of medicine.

For example, 3 lbs (1.36 kg) of hig-CBD flowers may only yield 50 grams of pharmaceutical-grade compounds.

But this ratio is even more strenuous for the 90+ rare cannabinoids that make up less than 0.1% of the plant. With costs in the millions of dollars-per-gram range, it is extremely cost prohibitive to be researching these cannabinoids in any in-depth capacity.

Biosynthesis for Cannabinoids?

The process of biosynthesis could be a clue to maximizing the potential of these understudied cannabinoids.

In fact, this innovation has already helped democratize access to insulin, which originally was an extremely rare and expensive compound. To get just eight ounces of insulin, over 5,000 pig pancreases had to be harvested and processed. With biosynthesis, that is no longer the case.

Biosynthesis is a process that can occur by genetically modifying an organism to produce a pharmaceutically bioactive compounds that it normally would not make. Biosynthesis could thus be used to produce rare cannabinoids that are biologically identical to those produced by the cannabis plant itself.

Here’s how it works:

1) A biosynthetic cluster is inserted into a DNA vector.
2) DNA is inserted into E. Coli bacteria, where it provides instructions to produce cannabinoid compound(s)
3) The process is conducted at a large scale, resulting in materials that can be further processed into purified cannabinoids

The Potential of Biosynthesis

The world’s largest cannabis biotech company, GW Pharmaceuticals, has signed a contract with British Sugar to grow 18 hectares of cannabis for its CBD epilepsy drug, Epidiolex™.

Equivalent to approximately 23 football fields of greenhouse space, this represents a considerable amount of resources and investment needed to grow enough crops to treat 40,000 children with the disease.

If biosynthesis can produce similar quantities of cannabinoids from a much smaller space, it would be disruptive to the industry. Further, it may also make getting other understudied cannabinoids more economic – helping to possibly unleash the full medicinal potential of the cannabis plant.

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Cannabis

The Allure of Craft Cannabis to Investors

Craft products are taking the retail world by storm. Find out why investors should be paying close attention to craft cannabis and its potential impact.

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The Investor Appeal in Craft Cannabis

They say if you do what you love, then the money will follow. In the multi-billion dollar cannabis business, that has certainly proved true for those who have been passionate about the plant for decades — otherwise known as craft growers.

Today’s infographic from Pasha Brands dives into the huge consumer demand for craft products, and why investors should pay attention to this trend as it extends into cannabis.

The Perfect Craft Product

Chances are, you may have encountered any of the following at least once: microbrewed beer, specialty coffee, premium wine, or organic food. They’ve become so popular, that craft versions of all these are steadily carving a valuable niche in their original markets.

 U.S. Market Size, 2017Craft Market Size, 2017Share of total
Beer vs Microbrew Beer$111B$26B23%
Coffee vs Specialty Coffee$32B$10B31%
Wine vs Premium Wine$80B$44.8B56%
Food vs Organic Food$898B$49.4B5.5%

Whether it’s introducing flavors into brews, slow-roasting beans, producing wine in small lots, or using a conscious “farm to table” label — what they have in common is the careful attention that’s paid to the process from start to end.

Craft cannabis bears a strong resemblance to all of these in that way, as growing it involves extra care, compared to large-scale producers. For example, hand-trimming is more labor intensive than using machines, but results in products with superior quality.

What are some other characteristics of craft cannabis?

  • Attention to detail
    A hands-on approach allows growers to personally ensure each cannabis plant is healthy.
  • Sustainable practices
    The use of organic farming to save energy, creating a smaller environmental footprint.
  • Social responsibility
    Smaller growers typically leverage local connections, creating employment opportunities.
  • Artisanal branding
    Sophisticated and modern packaging helps appeal to different types of craft cannabis consumers.

It’s clear why consumers care about craft cannabis. But what does it offer investors?

Making the Case for Craft

Investors should be paying close attention to craft cannabis for three key reasons: a higher price point, a focus on quality, and access to the retail market.

Upscale Price Tag

On average, organic cannabis has a higher price point attached to it, compared to regular grade cannabis.

  • Industry average: $9.02/ gram
  • Organic average: $11.40/ gram

Using organic methods to grow cannabis means that the final product on shelves boast an enhanced potency and effect. Since craft cannabis is also grown organically, it’s clear that consumers are willing to spend more to secure a premium product.

Promise of Quality

It might not come as a surprise that the most famous craft cannabis regions are also where the biggest volume of legal cannabis sales come from. California and Canada accounted for nearly 38% in global market share in 2017:

  • Worldwide sales: $9.5 billion
  • California sales: $3 billion
  • Rest of U.S. sales: $5.5 billion
  • Canada sales: $0.6 billion
  • Rest of world: $0.4 billion

These two areas have a foothold in cannabis sales, and with recreational legalization unfolding in both – and 75 million people living between the two jurisdictions – it will only continue to grow.

Opening the Doors

Following nation-wide legalization in Canada and an increasing number of states in the U.S., the continent is facing a cannabis shortage. Why? As it turns out, while craft growers are abundant, they still face regulatory hurdles in order to move from the “gray” underground market into launching legal operations.

Craft cannabis could be a cornerstone for industry growth, but its growers have been in the shadows for a long time. As cannabis gains momentum, tapping into the huge network of craft growers will be key for success.

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The Hidden Problem Looming Over the Cannabis Edibles Market

The cannabis edibles market is one of the most exciting growth segments for legal sales, but a variety of concerns remain, especially for beverages.

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A Problem Looming Over the Cannabis Edibles Market

The boom in legal cannabis has been absolutely historic.

According to ArcView Research, it’s already a multi-billion dollar industry – and by 2022, the legal market could be worth $32 billion globally.

As in any nascent industry, the early days of cannabis have been exciting and formative. As it begins to mature, it’ll become clearer what products will drive future growth.

In this context, cannabis edibles and beverages have taken center stage – and today’s infographic from Trait Biosciences outlines the magnitude of this opportunity, along with some of the challenges the market faces going forward.

The Rise of Edibles

From dark chocolate to CBD-infused beverages, the cannabis edibles market is one of the most diverse and exciting markets for both consumers and businesses.

Edibles and beverages have already more than doubled in their share of the overall cannabis market since 2011, and the market is expected to grow in size from $1 billion to $4.1 billion between the years 2017 and 2022.

This year, the Specialty Food Association even named cannabis edibles and beverages as a “Food Trend of the Year” – a nod to the fact that edibles are going mainstream, even within the scope of the much larger food and beverages industry.

Not surprisingly, as this category emerges, there are many big brands exploring options in the edibles market, including Constellation Brands, Molson Coors, Mondelez, Carl’s Jr, Anheuser Busch, Neal Brothers, and Coca-Cola. In particular, the beverages space seems to be hot: Constellation shelled out $4 billion for a stake in the largest cannabis company globally (Canopy Growth), and beer-maker Anheuser Busch partnered with Tilray to research THC and CBD drinks.

Marketplace Risks

There are four major sources of risk that could impact future growth potential for companies in the fast-moving cannabis edibles market:

  • Regulatory risks:
    Regulators are becoming increasingly concerned about the dosage, packaging, and labeling of edibles products
  • Stiff competition:
    Mega brands are entering the edibles space at a blistering pace, and could dominate market share from newer entrants
  • Taxes:
    Complex layers of taxation could decrease demand for edibles, such as in California, while also pushing consumers towards the black market
  • Consumer concerns:
    Unpredictable dosage amounts, taste, and even toxins have surfaced as issues with the media, as consumers voice their concerns with edible products

But above and beyond these known risks, there is another potential hindrance to the edibles and beverages market that flies under the radar: how cannabinoids are absorbed into the bloodstream when ingested.

The Journey Into the Bloodstream

Unlike substances like sugar or alcohol, cannabinoids are not soluble in water. Instead, they are soluble in fats.

A substance such as sugar can enter the bloodstream within 10-15 minutes of ingesting. On the other hand, fat soluble substances such as cannabinoids have to wait – which is why sometimes edibles take hours to kick in.

Ultimately, cannabinoids are absorbed through the body’s fat. This happens in the small intestines, which help distribute them to the rest of the body.

Implications for Edibles and Beverages

For some cannabis producers, fat-solubility just means slow onset times and a generally undesirable taste. For other products, like CBD beverages, it creates bigger problems. Water and oil simply don’t mix.

To get around this, producers are using special emulsion techniques to make oil particles smaller, so that they mix with water better, increase bioavailability, and speed up onset times.

  • Macroemulsion:
    Think of this as mixing oil and vinegar. It’s your common emulsion that will separate over time, since oil and water don’t mix
  • Nanoemulsion:
    Stable but thermodynamically unstable. Uses surfactants to keep water/oil binded
  • Microemulsion:
    Stable, but uses a higher concentration of surfactants (which lower the surface tension between two liquids)

While these techniques are seeing increased usage by producers of cannabis products, they do have their own set of limitations.

Oil and water solutions still unbind over time, and products may only have a limited shelflife. Reporting by WSJ has found that these beverages also have a questionable aftertaste for many consumers, and onset times of these products are still not as fast as smoking or vaping.

It’s also worth noting that various health regulators, scientific journals, and international organizations have raised concerns about using nano-sized particles in food and beverages.

For example, the Canadian government warns that there is a “causal relationship between nanoparticle exposure and adverse health effects”, while the respected scientific journal Nature warns that nanoparticles “may behave differently within the human body”, and that “safety of nanoparticles should be judged on a case-by-case basis”.

Next Steps?

The cannabis edibles market is poised to be the next big thing – but when it comes to how these cannabinoids get absorbed by the body, there is still much work to be done.

How will the industry and consumers move forward to capitalize on growing opportunities in the edibles and beverages market?

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