September 17, 2018

OrganiGram Holdings, the parent company of medical marijuana producer OrganiGram, has finalized a $10 million investment in Hyasynth Biologicals Inc., a Montreal-based biological company focused on cannabinoids and biosynthesis.

The strategic investment, which is the largest announced direct investment in such cellular agtech in Canada, will be structured as convertible secured debentures that will be purchased in three tranches and valued in the aggregate at $10 million.

Using patent-pending enzymes, yeast cells, and technological processes, Hyasynth has made it possible to produce phytocannabinoids and phytocannabinoid analogues in genetically modified strains of yeast. The process involves inserting a gene into yeast, which over the next five days will grow a basic molecule for cannabinoids which is then converted into specific cannabinoids through the addition of proprietary enzymes. This ability to produce CBG, CBD, and other cannabinoids in a lab setting for specialized products such as vaporizable cannabis, cannabis-infused beverages, and as pharmaceutical ingredients represents a lowered cost of production compared to traditional plant-based production.

“Hyasynth’s technology offers us access to the future of cannabinoid production today,” said Greg Engel, CEO, OrganiGram. “We know that cost-efficiency and scalability will be necessary to meet the needs of the Canadian and the global cannabis markets. Working with Hyasynth, we can throw out old assumptions about the scale, speed and precision with which we can produce both extract-based medical products and a comprehensive and diverse range of recreational use products like edibles and beverages.”

OrganiGram and Hyasynth are not the only partnership racing to be a leader in lab-created cannabinoids. The announcement of this investment comes only weeks after Cronos Group Inc. announced its partnership through a $122 million deal with Boston-based Ginkgo Bioworks for the development of genetically engineered marijuana compounds.

Under the terms of the deal Cronos will make an initial investment of $22 million in Ginkgo to fund R&D initiatives, which will then be followed by the issue of common shares valued at up to $100 million in tranches as pre-set benchmarks are achieved, reports Bloomberg.

“Being able to consistently and efficiently produce high-purity cannabinoids, that’s the holy grail,” said Mike Gorenstein, CEO, Cronos.

Engel of OrganiGram notes that the market for premium, indoor-grown cannabis will always exist, however, the potential is enormous for the large-scale production of cannabinoids through bio-fermentation; removing the variables associated with traditional growing cycles.

Hyasynth plans to use the capital from this deal to fund, refine, and optimize their processes at scale via a contract manufacturer, and to build out an all-purpose facility for production. Furthermore, as part of the deal, OrganiGram will be allowed to purchase large quantities of cannabinoid products from Hyasynth.

“We are proud to work with OrganiGram and make this transformative technology available to the Canadian and global cannabis industry,” said Kevin Chen, CEO and co-founder of Hyasynth. “Applying our research to the engineering of cannabinoid-based products means we can help companies like OrganiGram create more, better and more accessible products, while also essentially eliminating product shortages. Our goal is to not only contribute to the evolution of a new industry but to also help take care of the people who use and rely on these products.”

-Lynda Kiernan