Cutting Edge Technology ⚡️

A biotech startup is looking to change the way we produce cannabinoids...

In Today’s Issue:

  • → Cellibre’s Recent Raise. ⚡️

  • → Canopy Wants Wana. 💰

  • → The State of Emergency. ❌

The Race To Commercialize Cultured Cannabinoids

Biotech startup Cellibre raises $11.5 million USD to scale its platform…

Let's talk about Cellibre.

Founded in late 2017, Cellibre is a biotechnology startup seeking to solve a problem that would significantly alter the course of the cannabis industry.

An agricultural supply chain...

Today, the only method to produce cannabinoids is to cultivate cannabis plants — a process that takes 4+ months to complete.

Having successfully cultivated cannabis, the flowers these plants produce are sent to an extraction facility where specialized equipment extracts the cannabinoids from the remaining biomass.

This process is both expensive and rather wasteful with cannabinoids accounting for less than 20% of the total biomass cannabis plants produce.

Cellular agriculture…

In the 1960s a new technology emerged.

This technology was computers, with engineers writing software programs that have completely changed the very nature of our existence.

Now, technologists are seeking to take this one step further — programming cells to produce both the food & medicine we consume.

Just like the supercomputer you carry around in your pocket all day — this technology was once the stuff of science fiction.

Cellibre aims to use this technology to produce cannabinoids, which would reduce brand’s dependency on cultivating cannabis plants to access the cannabinoids consumers are seeking.

Future outlook…

Cannabis brands have access to a handful of the 168 cannabinoids we know of.

Cannabis plants are unable to produce the far majority of these molecules.

Should Cellibre successfully scale its technology, they could then supply cannabis companies with any & all cannabinoids they are seeking.

Cellibre is not without competition in this space to produce cannabinoids using this technology, however, having assembled a world-class team — they stand a great chance of succeeding.

Our Take

Cellibre is one cannabis company worth keeping a very close eye on.

Targeting a 90% cost reduction in the current price of producing cannabinoids, I will personally be watching this space closely.

The State Of Emergency

A state of emergency in response to the success of illicit cannabis…

Oregon has long been a leader in cannabis.

  • → In 1973 they decriminalized cannabis.

  • → In 1998 they legalized medical cannabis.

  • → In 2014 they legalized adult-use cannabis.

Despite this progressive cannabis regime, the State has struggled to displace the illicit cannabis market & one county is calling for greater support.

Water shortages…

On Wednesday, Jackson County in Oregon with a population of 220,000+ people officially declared a state of emergency in response to their inability to combat the illicit cannabis market.

To understand why the success of the illicit cannabis market warrants such a strong response.

  • → Over 80% of Oregon is experiencing severe drought conditions.

The poster child of this concern was the recent discovery of an illegal cannabis facility where 72,000 cannabis plants were being cultivated — with the required water being drawn from the Illinois River.

This poses an "imminent threat to the public health and safety of our citizens from the illegal production of cannabis in our county."

Legal hemp…

One of the primary problems regulators in the state face is the difficulty in distinguishing the differences between cannabis & hemp plants.

Can you personally spot the difference?

Authorities are claiming that it has become common practice for illegal cannabis farms to simply pose as legal hemp farms.

To add weight to this argument, the Oregon Health Authority and the Oregon Liquor and Cannabis Commission recently reported that close to 50% of registered hemp farms inspected in the state are illegally growing cannabis.

  • → 25% of registered hemp farms in the region outright refused entry to inspectors.

That said, this report did not offer clarity as to whether this is farmers intentionally cultivating cannabis, or if this 50% of farms were growing hemp plants that tested positive for having too much THC.

Reaching out for help…

In a clear admission that they are ill-prepared to deal with this issue on their own, the region is asking for support from the State to combat this problem.

"Jackson County strongly requests your assistance to address this emergency" the commissioners said in a letter to Gov. Kate Brown

Gov. Kate Brown has authorized doubling the size of cannabis law enforcement grants in the region, in addition to directing the Oregon State Police to dedicate additional resources.

Our Take

I cannot think of any other billion dollar CPG category where a majority of consumers purchase products from the illicit market.

With the current demand for illicit cannabis across the U.S, it’s clear that the legal cannabis industry in the U.S has substantial growth left to go.

Canopy Growth Wants Wana Brands

Canadian giant Canopy Growth is making moves to acquire Wana Brands…

In October 2018, Canada became the first G7 nation to legalize cannabis for adult use purposes.

Subsequently, billions of dollars flowed into the Canadian cannabis industry as producers raced to claim market share of this newly established market.

New demands…

Prior to successfully establishing themselves as market leaders in the adult-use cannabis market — several Canadian cannabis producers declared their ambitions of global domination.

These extremely ambitious goals allowed these Canadian cannabis producers to collectively raise billions of dollars from the investors who wanted a piece of this potentially trillion dollar pie.

The challenge for these companies is that these same investors who provided the capital these companies asked for to conquer the world are now asking for clearly defined plans for their entrance into the U.S market.

  • → 38 million people live in Canada.

  • → 329.5 million people live in America.

Making moves…

Courtesy of being listed on the New York stock exchange, Canadian companies are currently prohibited from acquiring U.S cannabis companies.

They can, however, purchase the rights to purchase U.S cannabis companies at the point which cannabis becomes legal in the U.S on a federal level.

In April 2019 Canopy Growth acquired the rights to Acreage Holdings in a deal that valued Acreage at $3.4 billion USD which made Canopy the first Canadian producer with a clear path to expand its plant-touching operations to the U.S.

Purchasing Acreage gave Canopy retail stores and cultivation facilities, however, Canopy now has its eyes set on expanding its edibles division.

Welcome Wana brands…

Founded in 2010, Wana brands is the #1 cannabis edibles brand in North America — with a strong presence in 12 states & Canada.

Similar to Cookies, Wanna Brands licenses its IP to other cannabis companies.

Led by Nancy Whiteman, the team at Wana has done a fantastic job scaling the presence of its brand across multiple markets.

This success has not gone unnoticed, and Canopy has announced its plans to acquire 100% of Wana brands for $297.5 million USD.

The timing of the deal closing remains very unclear due to the lack of clarity as to when the U.S will federally legalize cannabis.

Our Take

This is a great move by Canopy Growth, and I suspect Wana brands will not be its last acquisition as they expand into the U.S.

We can expect to see a lot more deals such as this one in the coming years as more Canadian producers make similar moves into this market.

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