Scientists just made marijuana compounds in a lab for the first time, and it could open to the door to new treatments for devastating diseases

• Scientists at UC Berkeley have for the first time created cannabis compounds in a lab, instead of by harvesting them from a plant.
• They detailed their work, which uses synthetic biology, in a study published Wednesday in the journal Nature.
• If the technique can be scaled, it would likely transform the marijuana industry by allowing scientists to explore little-known cannabis compounds and also manufacture those like THC and CBD for less money.
• Several other startups have announced similar efforts, but none has yet demonstrated publicly that they have a technique that works.

Lab-made marijuana is coming.

In a move that's expected to transform the marijuana and pharmaceutical industries, scientists at the University of California at Berkeley have for the first time created cannabis compounds in a lab, instead of by harvesting them from a plant. If the technique can scale, the method will pave the way toward making marijuana's therapeutic components more quickly and efficiently, and for a fraction of the cost of traditional methods.

Using an increasingly popular approach known as synthetic biology, the researchers genetically engineered yeast to churn out a key component of marijuana that's a precursor to two of the most well-known compounds in the plant: THC and CBD. Using those precursors, they then made the compounds themselves - no farm or field required.

While THC is known for causing a high, CBD has an emerging reputation as a therapeutic and is the active ingredient in the first federally-approved marijuana-based medication. Thanks to its likely health and wellness uses, the market for CBD could reach $16 billion by 2025, up from perhaps $1 billion or so currently.

And, in addition to THC and CBD, marijuana plants naturally contain a host of other little-known compounds that scientists suspect carry their own therapeutic properties. But it's been too difficult to produce them in large enough quantities to study.

That could now be set to change.

In a paper published this week in the journal Nature, the Berkeley researchers outline how both types of marijuana compounds - the well-known ones like THC and the lesser-known ones like THCV - could be made in a lab. That will likely have big implications for startups and pharmaceutical companies who aim to make new marijuana-based drugs for everything from epilepsy to pain and arthritis.

Several companies are working on similar efforts. Wall Street has taken notice as well, noting that lab-made marijuana is one of a growing list of factors helping to speed cannabis' entry into the pharmaceutical and consumer wellness industries.

"There could be whole host of new products that could come from this," Jay Keasling, a UC Berkeley bioengineer who led the study, told Business Insider.

'A critical step in the pathway that no one's had until this point'

Before they could make marijuana compounds without a field or greenhouse, Keasling and his team had to go hunting for the ingredients required to make it work in a laboratory - something of a holy grail for the cannabis industry.

Lab-made marijuana has multiple potential advantages over traditionally-grown marijuana, from lower cost to a smaller environmental footprint.

Several companies are interested in becoming the first to prove the method, also known as biosynthesis, works. Boston-based synthetic biology startup Ginkgo Bioworks, Maryland-based biotech Intrexon, and Canadian startup Hyasynth Bio have all referenced aims to produce cannabis in a lab.

Wall Street is keen to see it happen too.

"Compared to chemical methods, biosynthesis methods are more cost-effective, scalable, and environmentally friendly," analysts at investment firm Cowen wrote in a note circulated this week.

For Keasling's part, he and his team spent years figuring out how to do it.

They uncovered a clue in the patent literature about a way to tweak the genes of yeast using marijuana DNA that would result in it churning out a key precursor to the cannabis compounds CBD and THC.

The process of modifying the DNA of a basic organism like yeast or E. Coli to coax it into producing another product is known as synthetic biology. In recent years, investors have been pouring money into companies in the area. Put simply, synthetic biology involves harnessing the power of cells to make everything from less-toxic sweeteners for food to drugs and biodegradable building materials.

Read more: A Silicon Valley startup with 26 patents under its belt just raised $400 million from SoftBank and Goldman Sachs to make materials from living things

So Keasling and his team took all the basic ingredients identified by previous researchers - a combination of specific components of yeast DNA and specific components of cannabis DNA - and tried to make the marijuana compounds in a lab. Several attempts failed.

"We tried all the tricks we had," Keasling said. "We just could not get it to work."

So they took another stab. After several years of work exploring hundreds of marijuana genes, they were able to home in on their target. It was an enzyme called CsPT4, and it allowed them to make the ingredients they needed. Using those ingredients, they were then able to make compounds like CBD and THC.

"This is a critical step in the pathway that no one's had until this point," said Keasling.

A startup that aims to make new drugs and ink deals with pharma

The next step for Keasling is scaling up. To do that, he must prove his technique can work in larger experiments and at a lower cost than traditional manufacturing.

That could be of major interest to pharmaceutical companies like GW Pharma, who recently became the first company with a US-approved marijuana-based drug. (Called Epidiolex, the drug is designed to treat rare forms of epilepsy using high concentrations of CBD.)

It might also interest any one of a number of startups that in recent years have pledged to turn marijuana compounds like CBD into federally-approved drugs for diseases like Crohn's and multiple sclerosis.

Read more: A pair of high-profile Stanford scientists wants to use marijuana to treat an entire class of diseases where big pharma has fallen short

Keasling has already licensed the technology he describes in the study to a startup he founded in 2015 called Demetrix. He said it would be open to working with a range of established companies in the pharmaceutical or food industry.

Jeff Ubersax, Demetrix's CEO, told Business Insider that the startup has raised $11 million in venture capital led by Horizon Ventures, a Hong Kong-based VC firm. Horizon has also backed the plant-based burger company Impossible Foods and Siri, the developer of Apple's virtual assistant.

No stranger to startups, Keasling has previously founded several companies and currently serves as an advisor to four. In 2003, he helped found the biofuels-turned-skincare company Amyris and in 2010 he founded Lygos, a startup that aims to use microbes for renewable energy purposes. He's no longer involved with Amyris but remains an advisor to Lygos.

Read more: After a kick-start from Bill Gates, a Silicon Valley company aims to be the 'Intel Inside' of the $200 billion sweetener and skincare market

With Demetrix, Keasling and Ubersax are focused on two main goals, they told Business Insider.

First, they aim to churn out lab-made versions of cannabis's already well-known compounds, such as CBD and THC. They also want to make a handful of under-studied marijuana compounds, ingredients Keasling said likely carry therapeutic properties. These could include ingredients like THCV, for example, which may have appetite-staunching potential.

Other startups have similar aims. Ginkgo Bioworks, a Boston-based synthetic biology company, recently inked a $122-million deal with Canadian marijuana producer Cronos to make cannabis compounds like THC and CBD as well as lesser-known ingredients using the same synthetic biology principles.

Keasling thinks he can make marijuana compounds for a fraction of the cost of traditional cannabis production, citing the fact that his method won't require greenhouse building materials, large amounts of land or water, or manual labor.

"From a scientific perspective with all the rare cannabinoids we're going to be able to produce, I think it's going to be really cool," Keasling said.

---

---