Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos Group”), an
innovative global cannabinoid company, and Ginkgo Bioworks, Inc.
(“Ginkgo”), which is building the leading horizontal platform for
cell programming, today announced an amended collaboration and
license agreement (the “Amended Agreement”) that will enable the
companies to accelerate the commercialization of cultured
cannabinoids at scale.
The Amended Agreement with Ginkgo will enable Cronos Group to
commercialize products using cultured cannabinoids ahead of
reaching the originally stated productivity targets, while
maintaining the incentives to continue to develop towards and
achieve the previously agreed upon efficiency and cost goals. This
approach is expected to facilitate Cronos Group’s cultured
cannabinoid products being first to market in Canada, which will
drive significant market knowledge and consumer insights that are
expected to help deliver future novel and innovative
consumer-driven products. Cronos Group expects that the final
productivity target for CBG will be achieved prior to September
2021, as previously announced.
The Amended Agreement follows the receipt of Cronos
Fermentation’s processing license in April 2021, and most recently
the receipt of its CRA license. With the Amended Agreement and both
licenses in hand, Cronos Fermentation commenced commercial
production of CBG today. Cronos Group is prioritizing rare
cannabinoids, such as CBG, and plans to sequence commercial
production and subsequent product launches based on this
approach.
“Beginning commercial production demonstrates the significant
progress underway with our Ginkgo partnership and the competitive
benefits we see in being first to market with innovative consumer
products,” said Kurt Schmidt, President and Chief Executive Officer
of Cronos Group. “Cannabis holds many unique compounds with a wide
range of potential use cases and benefits. By leveraging Ginkgo’s
research platform and our fermentation manufacturing capabilities,
we believe we have disruptive technology that can deliver rare
cannabinoids at scale and elevate the consumer experience.”
“Biological manufacturing is unlocking access to important
cannabinoids that can be scaled up and produced reliably,
consistently and economically,” said, Jason Kelly, Chief Executive
Officer and Co-Founder of Ginkgo. “We look forward to continuing
our work with Cronos to facilitate innovation bringing this
powerful technology to the cannabis industry.”
Amended Agreement Terms
Under the terms of the companies’ original agreement, Cronos
Group agreed to issue to Ginkgo up to 14.7 million common shares in
the aggregate upon Ginkgo’s demonstration that certain
microorganisms are capable of producing the agreed upon eight
target cannabinoids above specified minimum productivity levels,
with tranches of common shares issued as each of the eight
milestone events (corresponding to such target cannabinoids) are
reached.
Under the Amended Agreement, milestone events have been
established for the early commercialization by Cronos Group of
products incorporating the target cannabinoids, such that, within
each tranche of common shares to be issued, one-third of the common
shares in the tranche will be issued on the date that Cronos Group
sells a product that incorporates the relevant target cannabinoid
to a third party. The remaining two-thirds of the common shares
within such tranche will be issued upon Ginkgo’s demonstration that
the relevant microorganisms can produce the relevant target
cannabinoid above the corresponding productivity level in the
original agreement. The aggregate number of common shares
potentially issuable to Ginkgo has not changed as a result of the
Amended Agreement.
Cronos Group has the exclusive right to use and commercialize
certain key patented intellectual property for the use of
microorganisms developed for the production of the target
cannabinoids globally. All R&D work undertaken by Ginkgo is
being conducted in compliance with U.S. federal law regarding
controlled substances. Cronos Group intends to produce and
distribute the target cannabinoids globally, where permitted by
applicable law and subject to applicable regulatory approvals and
has received confirmation that this method of production is
permitted under the Cannabis Act (Canada).
About Cronos Group Inc. Cronos Group is an
innovative global cannabinoid company with international production
and distribution across five continents. Cronos Group is committed
to building disruptive intellectual property by advancing cannabis
research, technology and product development. With a passion to
responsibly elevate the consumer experience, Cronos Group is
building an iconic brand portfolio. Cronos Group’s portfolio
includes PEACE NATURALS™, a global wellness platform, two adult-use
brands, COVE™ and Spinach™, and three U.S. hemp-derived CBD brands,
Lord Jones™, Happy Dance™ and PEACE+™. For more information about
Cronos Group and its brands, please visit:
www.thecronosgroup.com.
About Ginkgo BioworksGinkgo is building a
platform to program cells as easily as we can program computers.
The company's platform is enabling the growth of biotechnology
across diverse markets, from food and agriculture to industrial
chemicals to pharmaceuticals. Ginkgo is also actively supporting a
number of COVID-19 response efforts, including community testing,
epidemiological tracing, vaccine development and therapeutics
discovery. For more information, visit www.ginkgobioworks.com.
Forward-looking StatementsThis press release
may contain information that may constitute “forward-looking
information” and “forward-looking statements” within the meaning of
applicable Canadian and U.S. securities laws (collectively,
“Forward-Looking Statements”), which are based upon our current
internal expectations, estimates, projections, assumptions and
beliefs. All information that is not clearly historical in nature
may constitute Forward-Looking Statements. In some cases,
Forward-Looking Statements can be identified by the use of
forward-looking terminology such as “expect”, “likely”, “may”,
“will”, “should”, “intend”, “anticipate”, “potential”, “proposed”,
“estimate” and other similar words, expressions and phrases,
including negative and grammatical variations thereof, or
statements that certain events or conditions “may” or “will”
happen, or by discussion of strategy. Forward-Looking Statements
include estimates, plans, expectations, opinions, forecasts,
projections, targets, guidance or other statements that are not
statements of historical fact. Forward-Looking Statements include,
but are not limited to, statements with respect to: Cronos Group's
expectations regarding the potential success of, and the costs and
benefits associated with, its partnership with Ginkgo; expectations
about the development of the cannabis industry and potential demand
for cultured cannabinoids; the ability to commercialize cultured
cannabinoids and the timing thereof; Cronos Group’s expectation
that the final productivity target for CBG will be achieved prior
to September 2021; Cronos Group’s plans to sequence commercial
production and subsequent product launches based on its
prioritization of rare cannabinoids over more common ones; the
anticipated benefits of the Amended Agreement, including that the
commercialization of cultured cannabinoids ahead of achieving final
productivity targets will facilitate Cronos Group’s cultured
cannabinoid products being first to market in Canada; the
anticipated benefits of being first to market with cultured
cannabinoid products in Canada; Cronos Group’s intention to produce
and distribute the target cannabinoids globally, where permitted by
applicable law and subject to applicable regulatory approvals, and
its expectations of the regulatory framework for cultured
cannabinoids; and Cronos Group’s intention to build an
international iconic brand portfolio and develop disruptive
intellectual property. Forward-looking Statements are necessarily
based upon a number of estimates and assumptions that, while
considered reasonable by management, are inherently subject to
significant business, economic and competitive risks, financial
results, results, performance or achievements expressed or implied
by those Forward-looking Statements and the Forward-looking
Statements are not guarantees of future performance. A discussion
of some of the material risks applicable to Cronos Group can be
found in Cronos Group’s Annual Report on Form 10-K for the year
ended December 31, 2020 and Cronos Group’s Quarterly Report on Form
10-Q for the period ended March 31, 2021, both of which have been
filed on SEDAR and EDGAR and can be accessed at www.sedar.com and
www.sec.gov/edgar, respectively. Any Forward-looking Statement
included in this press release is made as of the date of this press
release and, except as required by law, Cronos Group disclaims any
obligation to update or revise any Forward-looking Statement.
Readers are cautioned not to put undue reliance on any
Forward-looking Statement.
For further information, please contact:
Cronos Group ContactShayne LaidlawInvestor
RelationsTel: (416)
504-0004investor.relations@thecronosgroup.com
Ginkgo Bioworks ContactMedia Relations
press@ginkgobioworks.comInvestor Relations
investors@ginkgobioworks.com
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