Marijuana producer Cronos, Gingko Bioworks making lab-grown cannabis

Shutterstock

• 
  Gingko Bioworks, a startup known for its work turning
  bacteria into consumer goods, is partnering with marijuana
  producer Cronos to make lab-grown cannabis.
• The $122-million deal, announced this week, will allow
  Gingko to use Cronos’ Canadian lab space to make several
  different marijuana compounds without a farm.
• Gingko’s CEO told Business Insider the deal could have
  big potential for the pharmaceutical industry, who’s
  been hard
  at work turning marijuana compounds into
  medications.

---

After months of searching, it was love at first sight for Jason
Kelly, the CEO of a startup known for its work turning bacteria
into consumer goods such as fragrances.

Kelly’s company, called
Gingko Bioworks, had been looking for a marijuana production
partner so it could apply its technology to cannabis. Using a
process similar to that which it uses to make flavors and scents,
the company aimed to make lab-grown marijuana strains with
pharmaceutical potential.

Then it discovered Cronos, a Toronto-based cannabis producer
founded in 2013.

“They had green rooms, automated tracks to move plants around, A
to B testing on various light configurations — everything. It was
exactly what we’d been looking for,” Kelly told Business Insider.

As part of a $122-million deal announced this week, Gingko will
use Cronos’ Canadian lab space to play with marijuana’s DNA.
Ginkgo aims to manufacture a handful of the plant’s better-known
compounds like CBD (the non-psychoactive compound that’s not
responsible for a high) and THC, as well as some of its
lesser-known components, such as THCV, which staunches
appetite but is only present in the plant in very low quantities.

Using its technology, Gingko could make all of these ingredients
at a lower cost and in desired quantities, Kelly said.

If successful, the work would be of major interest to
pharmaceutical companies, which have long
been eyeing marijuana’s compounds for use in medications and
have recently begun turning
them into federally-approved drugs.

“There’ so much new discovery work on the pharmaceutical side
that’ possible using our approach,” Kelly said. “That’ definitely
an area that we’re excited about.”

Kelly’s company — which has also partnered with
big names like Bayer AG and Cargill  — hopes to use the
processes it has already perfected using yeast and fragrances to
create eight marijuana compounds in Cronos’ Canadian labs.

Marijuana-based pharmaceuticals grown in labs instead of farms

For years, pharmaceutical companies have been
actively searching for ways to turn marijuana’s compounds
into medications. There’s been a hint of progress in recent
years.

In June, the federal government
approved Epidiolex, a CBD-based epilepsy drug; last year, it
green-lit Marinol, a drug made with lab-grown THC that treats
nausea and other side-effects of chemotherapy and AIDS.

But drug makers continue to face high costs for
conventionally-grown marijuana. In addition, they must navigate a
confusing web of state and federal laws in order to get their
products approved.

The potential to solve these problems with marijuana that’s grown
in a lab rather than on a farm was a big impetus behind Gingko’s
deal with Cronos, said Kelly.

“Beyond THC and CBD, there’s a whole class of rare cannabinoids
in [the plant], but accessing them at a remotely reasonable cost
hasn’t been feasible,” he said.

Through the deal with Cronos, he aims to change that.

“Cronos had a view that what matters is ingredients and cost —
and the technology to prove it.”