MJBizMag February 2022 - 43

James forecast in September 2020 that
the biosynthetic cannabis niche would
grow from $10 billion in 2025 to
$115 billion in 2040.
close to making plant-based extracts
that go into derivative products
obsolete. "
Other companies working on
biosynthetic cannabinoids include
Massachusetts-based Ginkgo Bioworks,
which has a partnership with Ontario,
Canada-based cannabis company
Cronos Group, and Montreal-based
Hyasynth Biologicals, which has
an investment from Organigram, a
licensed producer in New Brunswick.
Willow Biosciences in Canada also
is working on biosynthesis, as are
U.S. firms Cellibre in San Diego and
Demetrix and Lygos, both in Berkeley,
California.
Bio Opportunity
To be sure, the biosynthetic cannabis
sector has caught the eyes-and
dollars-of many traditional cannabis
investors. Consider New York-based
Tuatara Capital, one of the United
States' first cannabis investment firms,
which in 2016 invested in Teewinot Life
Sciences, a biosynthetic cannabinoid
maker in Tampa, Florida.
Tuatara's thesis for investing in
Teewinot " was based on the belief
that there would be a future market
demand for a technology platform
that could produce pure, consistent
cannabinoids ... and the development
of scientific methods to replicate the
cannabinoid production that occurs
in the cannabis plant, without the
plant itself, " Al Foreman, Tuatara's
chief investment officer and managing
partner, said via email.
" Based on our observations of adjacent
industries and how they source
and produce ingredients, we believed
that once alternative forms of cannabinoid
production ... were accessible,
then larger product companies would
seek that out, " Foreman added.
Flower Forever
While the notion of mass-producing
high-quality, consistent cannabinoids
Additionally, it is unknown whether
biosynthetic cannabinoids will have a
significant cost advantage over plantderived
cannabinoids.
" In most derivative products ... the
price of the cannabinoids generally
isn't the major consideration, " Makoso
said. " It's all of the other ingredients
and the packaging and the sales and
distribution costs that are generally
where the expenses are.
" Cannabinoids, even in the regulated
markets, are relatively inexpensive. "
Al Foreman
Taking Minors to the Majors
Tuatara's Foreman noted that
at a fraction of the cost, time and space
sounds like a threat to the industry
as we know it, cannabis executives,
investors and even biosynthesis
companies say a market for cannabis
plants will continue to exist.
" There are companies that will be
able to sell pharmaceutical applications
of their compounds, but they will
never put out of business every person
that grows or extracts cannabinoids or
produces cannabinoid products, " said
Jim Makoso, CEO of Flowe Technology
in Seattle.
Biosynthetic cannabinoids are likely
to appear as ingredients in pharmaceutical
products, wellness products
or ingredients in food. But they won't
appeal to the biggest demographic of
cannabis consumers: those who prefer
flower over other formats.
Makoso estimated that 55%-60% of
the cannabis market is flower.
" That says a lot about the market
for cannabis products. Some people
just like to take their flower, break it
up, stick it in a joint or their bong or
their bowl. ... That part of the market is
never going to go away, " Makoso said.
" Those (companies) that are producing
synthetically produced cannabinoids,
I think there's a place for them, but I
don't think they're going to ever come
biosynthesis is most valuable as a
source for cannabinoids that appear
naturally only in very small quantities.
As research progresses into the
efficacy of individual cannabinoids,
Tuatara believes the need for isolated
minor cannabinoids as ingredients
in pharmaceutical, wellness and food
products will increase-and the supply
chain required to efficiently produce
those inputs will need to be in place.
Sobel agreed, noting that
BioHarvest plans primarily to focus on
pharmaceutical markets.
" We believe this will be interesting
for Big Pharma companies interested
in creating formulations that use
cannabinoids, " Sobel said. " Also, many
CPG (consumer packaged goods) and
food companies are looking for steady,
reliable supplies of CBD and other
cannabinoids. "
And while there is still a long way to
go to commercialization, stakeholders
see a light at the end of the tunnel.
" The timeline for this alternative
production opportunity has taken
longer than originally anticipated
when we invested in this segment, "
Foreman said.
" But as the market has progressed,
the opportunity set has started to take
shape. "
mjbizdaily.com | February 2022 43
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MJBizMag February 2022

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