How Fermented Cannabinoids May Disrupt and Support the Industry

One of the most spectacular aspects of a legal cannabis industry is the research and development that’s permitted to take place. In legal markets, scientists and cultivators alike can work together to develop some incredibly innovative products and unlock new opportunities that reach far beyond the traditional cannabis industry.

Case in point we have fermented cannabinoids which are cannabinoid molecules identical to the ones found in cannabis plants but produced from a microbial organism such as bacteria or yeast.

“Much like a cannabis plant has native biochemical processes for producing cannabinoids, as well as many other complex functions, a simple microbe can be reprogrammed to perform the same types of biochemistries, without all of the complexities of a plant that requires soil, light, and time,” said Prakash Iyer, associate director of commercial strategy and operations at Ginkgo Bioworks.

Iyer added that there are many applications for fermented cannabinoids in today’s cannabis landscape.

“[They] can offer time and cost efficiencies over plant-derived cannabinoids, but more importantly, this technology unlocks the potential to access rare cannabinoids,” he said. “Most people are familiar with THC and CBD, which are derived from cannabis cultivars bred for high concentrations of these molecules. However, cannabis plants natively are able to produce more than 100 variant cannabinoids, most in vanishingly small quantities and each with unique pharmacological potential.”

Iyer pointed out a couple of examples in cannabigerol (CBG), which may reduce anxiety by blocking the same receptors that THC hits, and evidence to suggest that tetrahydrocannabivarin (THCV) can potentially be used as an appetite suppressant for weight control.

“Each cannabinoid is capable of being produced individually at high purity via fermentation, allowing for custom blended cannabinoid products to hone in on specific effects allowing for consistent and high-quality consumer experiences,” said Iyer.

This advanced production process may eventually provide a viable alternative in places like Oregon where the state’s Liquor and Cannabis Commission (OLCC) recently banned CBN based on its interpretation of House Bill 3000, citing concerns over artificially-derived cannabinoids. According to the OLCC’s compliance educational bulletin, the term ‘“Artificially derived cannabinoid” refers to a cannabinoid that is made by chemical conversion from another substance extracted from cannabis. It does not include substances made by decarboxylation without adding chemical reagents or catalysts. The two most common artificially derived cannabinoids are CBN (cannabinol) and Delta-8-THC, both of which are commonly made from CBD (cannabidiol).” No language in HB 3000 or the OLCC’s compliance bulletin references fermentation or cultured cannabinoids.

Aside from the ability to produce rare but extremely useful and potent cannabinoids in abundance, there are also some other excellent financial reasons for the industry to celebrate fermented cannabinoids.

“Significant improvements have already been made to cannabis breeding and cultivation, leaving little room for further cost reduction with this method. The ability to produce fermented cannabinoids to augment supply and scale for bulk THC and CBD for product formulation will be essential for meeting a growing demand.”

Another company in the cannabis space that is changing the landscape through fermentation is Creo, a California-based cannabinoid fermentation company.

“This fermentation process was pioneered in the 1970s by a company called Genentech which then sold the product to Eli Lilly who first made human insulin using this fermentation process,” said Roy Lipski, Creo CEO. “Ever since then, this fermentation process has increasingly been applied to not only more and more pharmaceutical drugs, but also more and more ingredients.”

Lipski pointed out that there are many consumer products out there that already use this process, including various types of vitamins used as essential ingredients in Beyond Meat, an increasingly popular plant-based meat substitute with a $2.15-billion market cap. “This process has been gaining traction for 40 years now but consumers are not necessarily too aware of it.”

As for the future of the fermentation process in cannabis, Lipski sees opportunities.

“As [cannabis] moves to broad distribution, mass appeal consumer packaged goods, I think that many of the manufacturers are going to look for the kind of quality, reliability, and supply that they are used to in all their other ingredients,” he said. “I think they’re going to conclude that the fermentation process meets their needs much better than the plant agricultural process.”

Still, Lipski was quick not to dismiss the importance of the cannabis plant in agricultural settings.

“To be clear, I think there will always be a role for the plant. [It’s] a unique mixture of hundreds of different metabolites. It’s like a vintage wine, you can’t recreate it, but equally, there will be a very large market for cannabinoids just as an ingredient. The two will coexist but each fulfilling a different part of the market.”

If Lipski’s vision proves to be true, farmers may find themselves being pushed to transition into laboratory production to meet suppliers’ demand for specific cannabinoids in many markets or refocus their efforts on growing terpene-rich plants for medical and adult-use dispensary customers.