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.
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.
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 Cannabinoid||Description|
|Endocannabinoids||Made in the human body|
|Plant cannabinoids||Found in the cannabis plant|
|Synthetic cannabinoids||Manufactured artificially to mimic natural cannabinoids|
|Biosynthesized cannabinoids||Biofermentation 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.
Why Retail Cannabis Could Be the Next Big Investment Boom
Retail cannabis could flourish into a $47.3 billion industry by 2027. What makes this cannabis segment so enticing for investors and consumers alike?
Imagine being an investor in Microsoft at the time of the company’s IPO in 1986. Or better yet, buying Amazon shares while it was still just an aspiring online book store in the late 1990s.
Chances to be an early adopter in the next billion-dollar industry are far and few in between – but it’s exactly what is happening today with the nascent cannabis market. After close to a century of prohibition, cannabis is back in the limelight as legalization rolls across the U.S. and Canada.
Visualizing the Retail Boom
Today’s infographic from Choom Holdings Inc demonstrates the consumer interest in retail cannabis, and the challenges and opportunities that come with this potential.
Legal cannabis today is a lucrative modern market in the U.S. and Canada. In 2018, sales were $10.8 billion – and they are expected to grow to $47.3 billion by 2027.
Who’s driving this growth? A recent survey reveals that:
- 58% of U.S. cannabis consumers use it at least once a week
- 66% of these weekly users are millennials, aged 18 to 34
- 46% of cannabis consumers who also drink, prefer it over alcohol
- 74% of cannabis consumers who also drink, believe it to be safer than alcohol
With more people using cannabis frequently, the disruptive potential of retail cannabis becomes clear.
The Cannabis Supply Issue
Colorado, Washington, Nevada, and most recently California have been among the major U.S. states to legalize recreational cannabis in recent years.
Although cannabis sales across all states have soared, there’s one caveat to mention, which is clearly seen in the case of California. As the state began selling cannabis in stores on January 1st, it also simultaneously ran out of supply when the grey market came rushing up.
This trend of pent-up demand is clear across both mature and new markets – even Canada couldn’t escape the same supply crunch, subjecting customers to long lines and wait times on day one of legalization. For example, only one legal retail store was open in the entire province of British Columbia on October 17th.
It’s not surprising to see why cannabis is such a valuable retail product, though: dispensaries typically outsell Whole Foods and other similar retailers.
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(Source: Marijuana Business Daily)
The Value Play in Cannabis
Seizing an early adoption opportunity is a best-case scenario in the investing world.
Today, such an opportunity may come in the form of retail cannabis. The segment still faces specific hurdles, but these challenges have the potential to convert into golden opportunities as the market matures in North America:
1. Inherited demand
Legal retailers will reach new consumers as the grey market begins to come online.
2. Strong foundation
Retail cannabis is only legal in ten U.S. states, but it already shows strong promise.
3. Building bridges
Retail cannabis stores are just now opening in Canada, but licenses are hard to get.
Retail cannabis is a brave new world for consumers and investors alike – and early entrants to the industry with access to capital and a large retail footprint will likely lead the charge.
The Science Behind the $13 Billion Medical Cannabis Industry
A deep-dive into the science behind the medical cannabis industry can provide some investor insight into what makes it a multi-billion dollar market.
The Science Behind the Medical Cannabis Industry
There’s nothing quite like cannabis in the plant kingdom. Beneath its humble surface, over 750 unique compounds exist within – all of which have helped propel the cannabis industry into the multi-billion dollar market it is today.
Today’s infographic from The Green Organic Dutchman takes a deep dive into the cannabis components which contribute to its therapeutic potential, how it interacts with the human body, and the ways it can be consumed.
The Chemical Effects of Cannabis
While many people would be familiar with THC and CBD as the two major cannabinoids, there are a few lesser-known cannabinoids which also play important roles: Cannabichromene (CBC), Cannabigerol (CBG), Cannabinol (CBN), Tetrahydrocannbivarin (THCv), and Tetrahydrocannabinolic acid (THCa).
In different combinations, they work together with terpenes – aromatic oils that are present in most plants – to provide relief for a variety of ailments.
|Pain/ Sleep||CBD, THC||Cramps, Migraine|
|CBC, CBD, CBN, THC||Insomnia|
|CBC, CBD, CBN, THC, THCv||Pain|
|CBC, CBD, CBDa, CBG, CBN, THC, THCa||Arthritis, Inflammation|
|CBD, THC, THCa||Crohn’s disease|
|Mood/ Behavior||CBD, CBG||Anxiety|
|CBD, THC||ADD/ADHD, Stress|
|CBD, CBG, THC||Bipolar disorder, OCD, PTSD|
|CBC, CBD, CBG, CBN, THC||Depression|
|Neurological||CBC, CBD, CBG, CBN, THC, THCa||Amyotrophic Lateral Sclerosis (ALS)|
|CBC, CBD, CBG, THC, THCa||Parkinson’s, Alzheimer’s|
|CBD, CBN, THC, THCa||Multiple Sclerosis|
|CBD, CBN, THCa, THCv||Epilepsy, Seizures|
|Other||CBC, CBD, CBDa, CBG, THC, THCa||Cancer|
When cannabinoids and terpenes interact, the human endocannabinoid system is already equipped to deal with the entourage effects that are created.
Modern-Day Medical Cannabis
It’s clear that many cultures embraced cannabis long before scientific research came into play. Its therapeutic properties were widely recorded and extolled around the world.
After decades of restricted access and stigma, the tide is turning back towards what our ancestors discovered long ago. Millions of patients rely on medical cannabis today, with Canada and Israel paving the way in cannabis research.
Medical cannabis has been legal nationwide since 2001, aiding scientists in studying its effects.
Funding: CAD$1.4 million (US$1.05 million) invested by the government towards research projects.
Since the 1990s, medical cannabis has been legal for patients of cancer, chronic pain, and PTSD.
Funding: 8 million shekels (US$2.16 million) annual government funding to support innovation.
Back in the day, typically only dried cannabis flower was used. However, consumption methods have evolved into three broad categories today: ingestion, inhalation, and application.
The dosage of cannabis consumed is easy to control using edibles or beverages, tinctures or sprays, and capsules.
The effects of cannabis are quickly felt through smoking, vaporizing, and/or dabbing concentrates.
Transdermal patches and topicals like balms offer localized relief through a controlled dose.
Each of these methods have their own pros and cons, but in the end, they all offer the medical cannabis patient with a wide variety to choose from. Some of these forms, such as topicals and edibles, even lend themselves to the rapidly growing consumer cannabis segment.
In the seventh part of this series, we’ll delve into the rise of retail that’s set to disrupt the cannabis industry.
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