Ginkgo Bioworks has inked a $122 million USD deal with Toronto’s Cronos Group (TSX:CRON).
Ginkgo Bioworks is a startup that turns bacteria into consumer goods, and the partnership will allow the company to apply its technology to cannabis.
It seems that the deal has excited investors as Cronos stock was up 13% on the news.
Ginkgo Bioworks Signs Deal with Cronos to Create Lab-Made Cannabis
Essentially, Ginkgo is looking to create lab-made cannabis strains with real pharmaceutical potential.
The company wanted to work with Cronos as it had “green rooms, automated tracks to move plants around, A to B testing on various light configurations — everything.”
According to Ginkgo Bioworks CEO Jason Kelly, Cronos had “exactly what we’d been looking for.”
The deal will see Ginkgo use Cronos’ lab spaces to play with marijuana’s DNA. The aim is to make CBD and THC —the two most important marijuana compounds used in treatments—at a much lower cost and in larger quantities.
To achieve this, Ginkgo will use the same technology that it applies when making flavors and scents.
If the process is successful, it would spell a big win for Ginkgo Bioworks by drawing attention from major pharmaceutical companies. Marijuana compounds have slowly but surely been approved for use in the medical field and business in this area is expected to boom.
“There’s so much new discovery work on the pharmaceutical side that’s possible using our approach,” Kelly said. “That’s definitely an area that we’re excited about.”
In previous ventures, Ginkgo Bioworks partnered with major pharma brands Bayer AG (OTC:BAYZF) and Cargill.
Featured Image: Forbes