The recent relaxation of cannabis legislation in Canada, many parts of the US, and several European countries has attracted a lot of investment. While most endeavors focus on extracting cannabinoid compounds from cannabis plants, there’s a growing interest in producing them using engineered microbes.
Nehtaji Gallage was first acquainted with cannabinoids when she was a researcher at the University of Copenhagen. She was hunting for the genes that help cannabis plants produce their unique compounds, and synthetic biology could play a key role in producing cannabinoids. This led her to create the Danish startup Octarine Bio in 2018.
“When we started Octarine, we first understood the strong stigma around these molecules. Some would consider any science research in this field is not ‘real science,’” Gallage told me. “Neurological and psychological conditions are poorly served by current drugs. Cannabinoids are poised to offer breakthrough therapies for these debilitating conditions.”
Across the Atlantic, the Montreal-based company Hyasynth Biologicals also aims to make cannabinoids using synthetic biology. After participating in the iGEM synthetic biology competition, Hyasynth founder Kevin Chen was looking for fun things to do with yeast that could be marketable. This is how he became aware of the research around the positive effects cannabinoids may have in people with conditions such as epilepsy and chronic pain. “Back in 2014, when we founded the company, there was no legal supply of cannabinoids,” Chen said.
Cannabinoids are a group of more than a hundred compounds naturally produced by many organisms. Even humans produce their own cannabinoid compounds, which play a role as neurotransmitters. But the best known cannabinoids are the tetrahydrocannabinol (THC), which is associated with the euphoric effects of cannabis use, and cannabidiol (CBD), which is not psychoactive.
The social stigma around cannabis use and the complexity of working with illegal substances has discouraged research on the health effects of cannabinoids in the past, though there is recent research evidence about beneficial effects on anxiety, cognition, movement disorders, and pain. In particular, CBD has proven to have therapeutic value in psychiatric and epileptic disorders. Unfortunately, the hype around this compound has led to the commercialization of products with unproven therapeutic value, while the scientific community is still barely scratching the surface of understanding how different cannabinoid compounds act in our body.
The benefits of microbial fermentation
Cannabinoids are traditionally extracted from cannabis plants. But growing cannabis is neither cheap nor environmentally friendly. In 2016, 1% of the total electricity consumption in the US was used to cultivate cannabis.
“While you can grow your plants at home, scaling up is expensive and you have to worry about pests and increased carbon output,” Chen said.
Microbial fermentation has recently emerged as a low-cost and environmentally friendly alternative. In 2019, researchers from UC Berkeley in the US were the first to produce THC and CBD in yeast, opening the doors to cannabinoid fermentation.
“Our efficient [production] approach significantly reduces land and water use, decreases energy requirements and eliminates the need for fertilizers and pesticides,” said Eric Steen, CEO of Berkeley-based Lygos.
Fermentation is an established technology in other industries, where it’s used to make food, beverages, fuels, and various chemicals. Using synthetic biology tools, scientists can harness the power of fermentation to produce cannabinoids. To do this, they transfer genes from cannabis plants into yeast or bacteria to make them produce only the desired cannabinoid compound.
“It is very difficult to get rid of THC in CBD isolates from plants. When you engineer a microorganism, you can select what your final product should be,” Gallage explained.
This production approach gives a clean final product, allows the production of rare cannabinoid compounds in high scale, and even lets scientists come up with new cannabinoid compounds with improved pharmacological properties. “We believe the benefits of a broader class of cannabinoids are just starting to be understood and realized,” Steen noted.
Choosing the right host
What is the best organism to produce cannabinoids? Each company makes a different choice. Yeast is a popular host, given the expertise in growing it and performing genetic manipulations. “Host matters!” said Gallage. “Both for strain development and scale-up, production platforms have to be highly amenable. That’s why we are happy with yeast”.
Roy Lipski, CEO of the San Diego-based startup Creo, favors bacterial production. The key reason is that it avoids the complex IP landscape of cannabinoid production in yeast, which is dominated by the US-based biotechnology company Amyris. Frankfurt-based Farmako is also following this avenue, working with the bacterium that is used to make tequila to produce hundreds of different cannabinoid compounds.
For its part, the Canadian biotech Algae-C is exploiting the benefits of producing cannabinoids in algae. “Algae can be grown in virtually any environment; they can use waste water and CO2 as a nutrient source; they are naturally rich in many of the precursors we require for high-value products; and, lastly, any leftover biomass from our process can be used as a high value protein source for the aquaculture industry,” Mather Carscallen, CEO of the company, told me.
As for any other fermentation processes, the biggest bioproduction challenge seems to be efficient scale-up. “The biggest challenge in producing at a commercial scale is having the expertise and the scalable technology to deliver the specific product at the right price in the required timeframe,” Steen noted.
“[There are] so many different problems to solve: toxicity, inhibition, secretion, pathway balancing, different metabolic states in different growth stages, fermentation optimization, downstream processing…” Lipski explained. “From my experience, it’s the boring stuff that kills companies.”
As Chen noted, there is the added challenge that there are no legally established practices on how to produce the compounds, especially in the case of pharmaceutical grade cannabinoids.
A growing market brings new opportunities
There are now more than 30 companies developing biological methods for producing cannabinoids, though Lipski sees the industry evolving towards just a low number of big companies, with smaller businesses becoming part of the bigger players.
The global cannabinoid market is now estimated to be over €290B. “Cannabinoids are a multi-billion dollar industry, I believe there is space for everyone,” Gallage told me.
A key driver of the growth of the cannabinoid market is that cannabinoids are being used for more and more applications, including nutraceuticals and cosmetics. This opens many opportunities for companies using fermentation to produce these compounds at a low cost and high purity.
Most of these companies are going after a business model where, rather than selling directly to consumers, they provide the compounds to other companies that take over marketing and commercialization tasks. “We are now announcing partnerships and scaling our business to meet the growing demand for these products,” Steen said. “Our vision is to enable cannabinoids to reach every household,” Lipski concluded.