Company looking to ‘brew’ cannabinoids secures $50 Million investment

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On Thursday, one biotechnology company in the San Francisco Bay Area announced that it had just completed a massive fundraising round and secured $50 million, thanks to the fact the company has genetically modified brewer’s yeast so that it can ferment sugar into cannabinoids.

We first covered the early goings of the California company Demetrix in February. The company was founded by Jay Keasling, a UC Berkeley professor of chemical and biomolecular engineering who also works as a scientist at Lawrence Berkeley National Laboratory. Last spring, the renowned scientific journal Nature even ran a piece on the work Keasling and his peers did, illustrating that the company was already off the ground.

According to Nature, “The hope is that this fermentation process will enable manufacturers to produce THC, CBD and rare cannabinoids that are found in trace amounts in nature more cheaply, efficiently and reliably than conventional plant-based cultivation.”

The coolest thing about this whole concept is not necessarily the idea of brewing major cannabinoids like THC or CBD, but pumping out the stuff we only find trace amounts of in the plant. However, it appears that Keasling is pretty hyped on the major cannabinoids, too.

We don’t even know the full medical potential of major cannabinoids — never mind the more obscure ones that Demetrix says it can grow on yeast.

On July 11, Demetrix announced in a statement the new round of funding came from their previous investor, Hong Kong-based Horizons Ventures, and from Tuatara Capital, a cannabis-focused private equity firm.

“Horizons Ventures shares Demetrix’s passion for unlocking the potential of natural ingredients for customers around the world via its cutting-edge synthetic biology work, a field that we truly believe will bring a seismic shift to the world,” Patrick Zhang of Horizons Ventures said in the statement. “Cannabinoids hold tremendous promise for improving human health, and Demetrix is uniquely positioned to bring these compounds to market in a cost-efficient way. We’re excited and proud to be part of this journey.”

Also worth noting, Horizons Ventures invests far beyond the cannabis industry. The private investment arm of Li Ka-Shing is an investor in big tech players like Facebook, Spotify, Siri, Zoom, Impossible Foods and Perfect Day. Ka-Shing is 90 years old and the 30th richest person on the planet, having built his wealth as the world’s leading port investor, developer and operator of the largest health and beauty retailer in Asia and Europe. His sons, who just took over the family business last year, may end up being some of the leading pharmaceutical cannabinoid investors on the planet.

If Demetrix is right, basing their claim off a number by Ackrell Capital, the global market for cannabinoids will be worth $100 billion by 2029. The number seems far from outlandish when you consider that the global pharmaceutical industry is expected to be valued at $1.2 trillion by 2024. We don’t even know the full medical potential of major cannabinoids — never mind the more obscure ones that Demetrix says it can grow on yeast. 

Demetrix CEO Jeff Ubersax said in the statement the company’s biggest advantage “is access to an exclusive license on Keasling’s research from Berkeley. The technology Keasling developed gives the company a unique ability to isolate and develop new cannabinoids and start screening them for utility.”

Kris Krane, who founded the cannabis industry group 4Front Advisors in 2011 and currently serves on the board of directors for the National Cannabis Industry Association, says that the large investment in Demetrix is risky, but could have large potential.

“It’s new science,” Krane told Cannabis Now. “And there may be competition. So [it’s] hard to call it a stable investment. But clearly, way fewer people are attempting this than growing flower. And the potential market is massive. Pharmaceutical cannabinoids are much more likely to be grown this way than in flower.”

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