Cultivation and extraction

The increase in demand for a variety of cannabinoid products has led to differentiation and innovation in manufacturing processes. The traditional method of producing cannabinoids, primarily THC and CBD, is to cultivate and process the cannabis plant. For some recreational users, this is the preferred approach. It is often considered the most ‘natural’ method and produces the dried cannabis flower, in a variety of strains, which can be smoked or vaped. However, this form of production can be unpredictable and labour intensive. Traditional farming has only a three-month growing season and is vulnerable to pests, disease and variations in weather. These factors affect the quality of the plant, the yield and the overall cost. While preferred by some, the flowers contain a mixture of cannabinoids, rather than a single active pharmaceutical ingredient (API). Extraction of cannabinoids from the plant is the most common method of cannabinoid production for medical use. There are several methods to extract the cannabinoids from the plant; the most common method is extraction with organic solvents. The downside of this approach is that cannabinoids only account for approximately 5% of a cannabis plant’s weight. This means that following extraction, 95% of a plant’s mass becomes waste. Additionally, since rare cannabinoids, such as THCV, occur in very small amounts within a plant, the extraction of rare cannabinoids from plants is not commercially viable. There is, however, innovation in cultivation. PharmaCann focuses on the cultivation of high-yield THC flowers for medical use. It has developed a greenhouse-based approach that reduces plant growth time to nine weeks and plants can be grown all year round. It recently raised US$40m in senior secured notes. BioHarvest Sciences (CNSX: BHSC, market cap US$160m) has a patented platform technology in which it isolates plant cells that produce desired products or metabolites, such as cannabinoids. The cells are grown in a petri dish and once they reach a high enough mass, the cells are harvested to produce a powder containing the desired product. BioHarvest has shown the feasibility of its overall approach with its red grape cell product, VINIA. Its first cannabinoid product has been guided to be commercially available in 2022.

Chemical synthesis

Chemical synthesis is a viable manufacturing method for both common and rare cannabinoids. This is a lab-based process where a chemical entity is converted into another through a series of chemical reactions. This can be a preferred option to manufacture small quantities of a cannabinoid, as chemical synthesis can be conducted relatively efficiently on a small scale. Other processes may provide better cost efficiency for larger production volumes. Additionally, the viability of chemical synthesis depends on the cannabinoid. In some cases, both small- and large-scale synthesis will be well defined. In other cases, the synthetic route may be unknown and/or unviable. Purisys is a leader in the manufacture of pharmaceutical-grade cannabinoids through chemical synthesis. It has a patented process for the synthesis of ultra-high purity CBD containing less than 0.001% THC. Ultra-high purity CBD comes with high costs of production; Purisys sells 100mg of CBD for US$400. Recipharm, a pharmaceutical contract development and manufacturing organisation, has developed synthetic routes to manufacture rare cannabinoids including CBDA and cannabigerolic acid (CBGA). It claims to have the ability to rapidly produce small quantities of cannabinoids and that it can develop large-scale synthetic routes of an API at pharmaceutical-grade purity for clinical trials. The synthetic forms of THC, dronabinol and nabilone, are both manufactured through chemical synthesis. They are both approved by the FDA for use by cancer patients to reduce chemotherapy induced nausea and vomiting.

Biosynthesis

Biosynthesis is a process that produces naturally occurring chemical compounds through successive enzyme catalysed reactions. Advances in bioengineering have led to methods to convert microorganisms into cost-effective and scalable ‘microbial cell factories’ that can produce molecules, such as cannabinoids. The bacteria E. coli and baker’s yeast (S. cerevisiae) are often the microorganisms of choice to perform biosynthesis of useful, naturally occurring molecules. The genomes of these microorganisms are well understood, which allows bioengineering to convert these cells into molecule production factories. This is achieved through inserting specific enzymes into a microorganism and/or by modifying its genetics. This instructs the bioengineered microorganism to produce a specific molecule. As with plant cultivation and chemical synthesis, extraction and purification steps are required to collect the pure API. Baker’s yeast is generally regarded as safe for the production of biopharmaceuticals; in 1982, the FDA approved the use of bioengineered baker’s yeast to produce therapeutic insulin. Throughout the biotech industry, both yeast and bacteria are broadly used for biosynthesis. However, some manufacturers state the use of bacteria instead of yeast can make the cannabinoid extraction process easier and more cost-effective on an industrial scale. Bacteria directly secrete the cannabinoid products into their surrounding medium, whereas yeasts must be separated from the cannabinoid molecules, following synthesis. Overall, biosynthesis is seen by many as the most cost-effective and environmentally friendly method to manufacture industrial-scale cannabinoids although this remains an evolving value proposition. The microorganisms can convert sugar into cannabinoids and can be fermented in existing large-scale infrastructure such as bioreactors that are readily available. Genomatica uses both bacteria and yeast to manufacture a variety of products including compostable packaging, cosmetics and cannabinoids. It focuses on renewable feedstock to grow its bioengineered microorganisms. Genomatica is partnered with Creo to produce CBG. In June 2021, Creo was issued a US patent for its proprietary method of manufacturing geranyl pyrophosphate, an essential molecule in the biosynthesis of many cannabinoids. One of the older biosynthesis companies is Amyris (Nasdaq: AMRS; market cap US$1.4bn); it has been biosynthesising a range of products since 2003. It is positioning itself to become a market leader in large-scale, low-cost production of CBG. Amyris’s Spain-based manufacturing partner is currently producing industrial-scale CBG using 225,000 litre fermenters. In March 2021, Willow Biosciences (TSE: WLLW; market cap C$44m) completed its first commercial-scale fermentation of CBG. Willow has since increased production, currently fermenting CBG in 10,000 litre reactors. It has also reported that it has developed a process for biosynthesising the rare cannabinoid CBGA. Founded in 2015, Demetrix has raised US$61m in funding to scale up its biosynthesis-based manufacture and isolation of cannabinoid products. In 2021, the company made its first CBG product available for sampling, and quickly moved to scale up production. Demetrix’s R&D efforts are also focused on developing proprietary biosynthesis pathways for other rare cannabinoids.

Combined fermentation and chemical synthesis

As noted, there are a several companies that bioengineer and ferment bacteria or yeast to manufacture cannabinoids. BayMedica, a division of InMed Pharmaceuticals (Nasdaq: INM; market cap US$13.4m), also uses these means, along with chemical synthesis, to produce rare cannabinoids at food-grade GMP, primarily for the health and wellness industry. BayMedica’s platform bioengineers baker’s yeast to biosynthesise cannabinoids, which are isolated and purified. However, depending on the desired cannabinoid, purity, scale, chemical synthesis or a hybrid approach that may be the preferred route of manufacturing, BayMedica also modifies select cannabinoids to create novel chemical entities that are subtly different from naturally occurring cannabinoids but may have unique and pharmaceutically interesting properties. The additional advantage of its chemistry capability is that BayMedica can be agile in its approach to manufacturing. Depending on the cannabinoid and the scale at which it is produced, it can be more efficient and cost-effective to produce it by complete chemical synthesis, biosynthesis or a combination of the two. BayMedica’s dual expertise allows it to select the best route for each product. BayMedica is currently a global leader in large batch production of CBC.

Enzymes for biotransformation

InMed Pharmaceuticals is focused on the production of rare cannabinoids for pharmaceutical use. It has developed a proprietary manufacturing process, IntegraSyn, that utilises biotransformation, the modification of a chemical compound by an enzyme. The company’s IntegraSyn modular process begins with the fermentation of bioengineered E.coli to biosynthesize specific proprietary enzymes, rather than a cannabinoid. These enzymes are subsequently used to perform biotransformations on chemical substrates to produce rare cannabinoids, which can be separated and purified. Unlike typical systems, the initial fermentation step does not produce a cannabinoid. Additionally, the fermented enzyme can be used in the biotransformation of multiple cannabinoid products. This makes the whole process more flexible, meaning that production can be shifted from one cannabinoid to another when there is need to. InMed also reports that the IntegraSyn process is up to 50% faster than yeast-based biosynthesis, which typically takes 5–10 days for cannabinoid synthesis. It also states that the process provides higher yields than traditional biosynthesis, or the chemical synthesis, of several cannabinoids.