The cannabis industry has been growing rapidly over the past few years, and according to research firm Cowen & Co, the US legal cannabis industry is estimated to touch $75 billion in sales by 2030. Given the solid industry outlook, several companies have been eyeing entrance to the market.
Evogene Ltd (NASDAQ:EVGN) is the latest addition to the CBD Space.
On Wednesday, Evogene announced its entry into the medicinal cannabis space through a subsidiary, Canonic Ltd. The news was met with a lot of enthusiasm, driving up EVGN stock by 36.6%.
Evogene has been eyeing the medical cannabis industry for about a year now and has already obtained research program approval and the establishment of a research facility from the government.
Developing Next Generation Cannabis Yield
Canonic Ltd will be tasked with developing the next generation of medicinal cannabis products from better and high-grade leaf yields. To develop its cannabis products, Canonic will leverage Evogene’s proprietary plant genomics and computational knowledge that has been proven over time to produce high yielding crops with exceptional qualities.
What's really exciting is Evogene’s Computational Predictive Biology (CPB) platform, which is able to address plant quality hurdles and develop stable yields with specific metabolite composition. The cannabis market is expected to be worth well over $37 billion by 2023 according to data by Research and Markets. So if Evogene is able to offer a juicy slice of that cannabis pie to the industry, things could work out very well for EVGN stock.
>> Pot Stocks On the Up: Two Nevada Kings You Need to Watch
Rule of the Jungle
However, the companies that survive in this space will have to address industry challenges such as low metabolite yields, which can significantly increase costs for patients. Other challenges include low variety stability, which causes highly inconsistent yields that are unreliable in medical treatment, and the uncertainty of pinpointing the correct cannabis metabolite profile for particular medical indications.
Through a non-GMO approach, Canonic has endeavored to resolve these developmental challenges by creating high metabolic yield cannabis, developing stable varieties, and creating cannabis varieties with unique metabolite profile fashioned for specific medical indications.
To start, Evogene and Canonic will address the post-traumatic stress disorder (PTSD) indication, severe chronic pain, and cancer.
What do you think about Evogene joining the cannabis industry?
Featured image: DepositPhotos © belchonock
