NetworkNewsWire Editorial
Coverage: According to a recent
Haywood Securities research report, the value of the cannabidiol
(CBD) market is expected to hit $2.1 billion by 2020. CBD is just
one compound out of more than 90 found within the cannabis plant,
though. While many companies with an interest in medicinal
marijuana pursue various avenues to extract cannabinoids,
InMed Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF)
(IMLFF
Profile) has developed a proprietary
process capable of extracting all 90+ cannabinoids in a laboratory
setting, eliminating most of the costly requirements that typically
come with cannabinoid extraction. To understand the value of this
process, it helps to take a look at the methods utilized by other
industry players such as GW Pharmaceuticals (NASDAQ:
GWPH) and Zynerba Pharmaceuticals, Inc. (NASDAQ:
ZYNE), as well as the challenges of high-volume cannabis
cultivators like Aurora Cannabis, Inc. (TSX: ACB) (OTCQX:
ACBFF) and Canopy Growth Corp. (TSX: WEED) (OTC:
TWMJF).
Fueled by mounting increases in consumer demand and expanding
legalization, the race is on to find a cost effective method of
extracting medicinal-grade cannabinoids. To glean
pharmaceutically-viable cannabinoid compounds, cannabis must first
be physically grown in quantity. Then, the cannabinoids are
extracted and processed in an attempt to meet the exacting purity
levels required by regulatory standards. Sourcing cannabinoids
naturally requires planting, growing, harvesting, extracting and
purifying huge quantities of plants. Breath of Life Pharma,
recently featured in a Rolling Stone
article, had to dedicate one million square feet of cannabis
cultivation space in order to produce enough raw flower for its
extraction business. Producing compounds from plant extracts is
time consuming and expensive, and, despite cultivating thousands of
tons of cannabis, most companies in this arena can only produce a
couple of the 90+ cannabinoids present in the plant. Many
cannabinoids are found only in trace amounts and will never be
accessible or economically feasible with current extraction
methods.
Dedicated real-estate, facility maintenance and operating costs
are all requisite for cultivation, making cannabinoid production a
cumbersome and costly business. There are also ongoing concerns
with growers resorting to the use of fertilizers, pesticides and
herbicides to produce healthier crops and improve yields. Such
actions can introduce toxic substances into edible and
pharmaceutical-grade cannabinoid extracts.
With capital intensive infrastructure investment, weather and
facility risks, on-going operating costs and contamination
possibilities, cannabis companies may soon rely on natural and
chemical synthesis processes to extract valuable cannabinoid
compounds for use in medicinals and potential new pharmaceutical
drug development.
Meaningful economic impact on profits should easily accrue to
cannabis companies capable of shedding all the costs and challenges
associated with current cultivation to extraction methods. InMed
Pharmaceuticals (CSE: IN) (OTCQB: IMLFF) is
scientifically bypassing the horticultural approach to cannabinoid
production by developing a robust, high-yield biosynthesis process.
The company’s proprietary cannabinoid manufacturing process
combines the inherent safety and known efficacy of natural drug
structures with the convenience, control and quality of a
laboratory-based manufacturing process. InMed’s innovative process
targets significant cost savings as well as enhanced production,
purification and quality control compared to existing
grow-harvest-extract-purify methods employed by other companies.
With similar scientific approaches used in multiple pharmaceutical
applications, InMed’s biosynthesis system will allow the extraction
of all of the 90+ naturally occurring cannabinoids. InMed's
proprietary biopharmaceutical approach to the production of
pharmaceutical grade, bio-identical cannabinoids is a
transformative technology in the rapidly emerging cannabinoid
pharmaceutical, nutraceutical and medicinal sectors.
Using its exclusive process in a controlled laboratory setting,
InMed’s scientists can create cannabinoid compounds that are
identical to those found in nature without the difficult, expensive
and time-consuming challenges of planting, growing and harvesting
cannabis then laboriously extracting the individual cannabinoids
for medical use. It also completely eliminates any need for
fertilizers or pesticides. To protect this valuable asset, InMed
recently filed a provisional patent for biosynthesis of
cannabinoids. Once converted into an International Patent
Cooperation Treaty (PCT) application, InMed will aggressively
pursue key international jurisdictions.
"This novel approach to the biosynthesis of cannabinoids is a
game-changer for drug development. The importance of producing
cannabinoids that are identical to the naturally occurring
compounds cannot be overstated. Many drug development efforts with
synthetic derivatives have failed," Dr. Vikramaditya Yadav,
assistant professor of Chemical and Biological Engineering at the
University of British Columbia, a co-inventor of the biosynthesis
technology, stated in a news release announcing the filing
(http://nnw.fm/WJ8zY).
On the cusp of revolutionizing cannabinoid extraction, InMed is
assembling the world’s leading experts to assist with advancing its
biosynthesis technology toward commercialization. In September,
InMed retained Ben Paterson, P.E. as a consultant to help define
the pathway for the scale-up, purification, and manufacturing
strategies for InMed's cannabinoid biosynthesis program (http://nnw.fm/pY34f). Paterson has nearly 40 years’
experience developing pharmaceutical manufacturing and purification
processes. He devoted 24 of his 37 years as a senior engineering
advisor at Eli Lilly in the company’s biosynthesis division. His
expertise in this arena includes the design, construction,
operation, optimization, and troubleshooting of both large and
small molecule drug facilities, including the E. coli
biosynthesis of numerous products.
No other extraction method reduces the cost or time required to
create pharmaceutically-viable cannabinoid compounds like InMed’s.
Other companies depend on the expertise of outside cultivators.
GW Pharmaceuticals’ (NASDAQ: GWPH) strategy is
to engage a UK-based greenhouse grower to cultivate cannabis for
its Epidiolex treatment. In 2016, GW Pharmaceuticals entered into a
partnership with British Sugar that saw the cultivator switch from
growing tomato plants to cannabis. The long-term contract involves
growing marijuana plants in an 18-hectare greenhouse complex in
Wissington, Norfolk, UK, to support GW’s development of a childhood
epilepsy drug. It is expected that the crop will yield enough
cannabis to treat 40,000 children per year globally. However, the
production process still requires a great deal of expense,
including electricity, lighting, heating, real estate costs and
other resources that could potentially cost tens of millions of
dollars, or more – racking up considerable costs compared to
InMed’s ability to extract cannabinoids in a laboratory
setting.
Zynerba Pharmaceuticals (NASDAQ: ZYNE) is
crafting synthetic cannabinoid development techniques. Unlike
InMed’s platform, these will not mimic naturally occurring
cannabinoids, but will be derived from chemicals. Zynerba has been
working on cannabinoid-based treatments for several major health
conditions. In addition to epilepsy, fibromyalgia and Fragile X
syndrome, the company has developed a synthetic transdermal
cannabinoid product in the form of a gel that enables compounds to
pass through the skin and into the blood stream. A skin patch is
also available. Zynerba claims that its product candidates are
produced in accordance with regulatory requirements, are consistent
in potency and have no impurities. However, the company recently
reported disappointing top-line results from its phase II study of
ZYN002, a synthetic CBD-formulated permeation-enhanced gel for
transdermal delivery.
For nearly 17 years, traditional cannabis producers in Canada
have struggled with capital infrastructure investment,
environmental risks and the open-ended costs of production,
believing that somehow they’ll become more profitable by reaching
economies of scale. Overseen by government-mandated quality
controls, it’s a capital intensive business no matter the size of
production.
With the incumbent operating costs of an 800,000 square foot
building, Aurora Cannabis (TSX: ACB) (OTCQX:
ACBFF) is one of the largest producers of medical cannabis
in Canada. However, even large licensed producers are susceptible
to the vagaries of marijuana cultivation and cannabinoid
extraction. In January, the company announced a
government-initiated Type II voluntary recall of its products, with
some of its marketed offerings containing “residual levels of
myclobutanil and/or bifenazate that exceed any of the levels
permitted in food production for these two pesticides.”
Unfortunately for Aurora and all other producers, any trace of
pesticides is compounded during cannabinoid extraction. The
long-term ramifications of the recall are difficult to ascertain
but certainly carry a financial and reputational impact. The
company’s cannabis oil extracts represent about 26 percent of gross
revenues. Biosynthesis produces 99%+ pure cannabinoids with no
possibility of contamination, since no plant material, fertilizers
or pesticides are ever used.
Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF)
has publicized its automated, data-driven processes, lean operation
and climate control systems, but it is still dependent on large
parcels of land and significant capital. Canopy is the parent
company of licensed cannabis producers Tweed Inc., Tweed Farms
Inc., Bedrocan Canada Inc. and newly-acquired Mettrum Health Corp,
giving Canopy a combined growing platform featuring over 665,000
sq. ft. of production space. The company has also acquired part or
full ownership of other cannabis producers and distributors.
Although it may be a “data-driven” mega producer, Canopy is still
subject to capital outlays, significant operating costs and
continuous quality control concerns.
The cost of cannabis production for extracts is fast becoming a
leading concern of cannabis growers and producers, especially those
looking to establish a reputation for quality and consistency in
addition to locking in long-term profitability in the burgeoning
marijuana market. The enormous profit potential of cannabis
production is offset by the vagaries of production and labor costs,
varying quantity yields, environmental risk, impurities and limited
cannabinoid compound extraction. InMed is at the vanguard of
cannabinoid production with its ability to biosynthesize any
cannabinoid in the laboratory. InMed’s proprietary cannabinoid
manufacturing system provides a scientific method to
cost-effectively produce larger volumes of guaranteed high-quality
compounds. This unique ability places InMed in an enviable position
as both the medicinal and recreational marijuana markets continue
to surge.
For more information on InMed Pharmaceuticals, please visit:
InMed
Pharmaceuticals, Inc. (CSE: IN) (OTCQB: IMLFF)
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