Willow Biosciences CEO Trevor Peters discusses how biosynthetically produced cannabinoids could shake up the cannabis industry

Willow Biosciences Inc (TSE:WLLW) (OTCQX:CANSF) (FRA:3D7) is a visionary Canadian biotechnology company that fits well the “disruptive” profile that modern investors are eager to include in their portfolios. Its biosynthetic approach to creating THC, CBG and other plant-derived ingredients has the potential to shake up the cannabis industry; it takes farming and plant-processing out of the picture, bringing benefits on environmental, cost and inventory management fronts, to name just a few.  Proactive connected recently with Willow President and CEO Trevor Peters to discuss the company’s competitive advantages, its focus on European markets, and first commercial-scale fermentation run.

Willow Biosciences is launching production of biosynthetically produced cannabis products featuring quality, environmental and other advantages over products made from the actual cannabis plant.  How is it possible to improve upon the plant itself?

Like almost everything in nature, plants have not evolved to produce cannabinoids for human consumption. Plants have evolved to make cannabinoids primarily as a defensive mechanism. If you look at cannabinoids, from an evolutionary perspective they’re great at fending off pathogens like bugs, yeasts and molds that would otherwise harm or kill the plant.

Plants are not out there for the benefit of humans, they’re out there for the benefit of themselves, and by virtue of that they’re not a production system for us. When we’re improving upon the plant, it’s really about taking what the plant has done and adapting it for the purposes of human consumption.

The key to what we do is we’re creating an organism in yeast – a living organism that is able to produce in a much more efficient manner what the plant is doing today. Rather than bothering nature for our benefit, let’s try and figure out a way to manufacture such that we have more efficient processes, lower costs, and safer manufacturing methods for human consumption.

Willow recently announced that by the end of 2021 you intend to be producing synthetic THC.  Does synthetic THC also offer the benefits you just mentioned?

The processes are almost identical. The yeast we use is very versatile and we can quickly adapt or evolve to produce different cannabinoids, THC being the first example. When you look at the production tanks from the outside, you wouldn’t know what’s being made inside.

Who will you sell the THC product to and are you already developing a sales pipeline?

The Canadian market is the only market available today for THC. We have a good regulatory framework in Canada, monitored and administered by Health Canada. As far as the sales channels are concerned, another great thing about the Canadian market is that it is more developed than other markets in terms of the regulatory framework, how things are done, and the safety of the products.

The sales channel and pipeline in Canada is fairly straightforward. We feel we can establish long-term contractual relationships with some of the larger formulators, like products and beverages, that require a high degree of purity and consistency. When you think about a complex food beverage matrix with a variety of ingredients, being able to have a highly pure starting ingredient is the basis of success.

The first product Willow is putting into production is ultra-pure CBG.  Talk about the timeline and market demand for this.

We initiated production in Europe at the end of March.  There are several reasons we chose Europe.  First, the assets exist for us to manufacture – indeed, our contract manufacturing organization is based there.  Second, the regulatory landscape is favorable toward cannabigerol.  And third, the market for using CBG in cosmetics and topicals is already established. Cosmetics and topicals are one of the many segments of the consumer packaged goods industry that we will go after.

We recently announced the results of several studies that were conducted with our development partner Signum Biosciences. They demonstrated the safety, anti-inflammatory, anti-aging, and antimicrobial properties of our CBG, and the bottom line is that it is safe when applied to skin and eye areas and can be a more potent antioxidant and anti-inflammatory for certain skin applications than plant-derived cannabidiol.

Sounds like there are some real advantages to end-users versus technologies that extract oils and other elements from actual plants.  Talk about the markets you are targeting – how big are they and how ready are they to embrace a new way of doing things?

In Canada, the consumption of concentrates, which would be distillates or isolates – basically, extracts from the cannabis plant – is pretty substantial. When you think about the US market, you could just do some simple multiplication based on population to arrive at the equivalent estimate for the US. Same with Europe.

With respect to adopting new technologies, Europe is a great landscape for us in that fermentation-derived ingredients are very well established. The concept of biosynthetically producing cannabinoids will fall very much in the mix of what is already being done.  In the US, we’re also seeing adoption of fermentation-based technologies – just look at the Impossible Foods burger.  More of the ingredients that we are used to consuming are going to be produced using fermentation.

With a smaller footprint environmentally, it’s a more sensible way to adapt nature to what we consume on a daily basis. When I look at adoption, especially when I talk to bigger companies that are already sourcing or procuring biosynthetically derived ingredients, most of them just assess the validity of our technology, and not the technology itself. They are very favorably disposed toward a higher purity ingredient at an equivalent or lower cost base.  The ability for us to do in 10 days what a plant does in six months is very appealing to them from an inventory management perspective.

How about the competitive landscape for biosynthetic cannabis compounds?  Are biosynthetically produced cannabis products common, and is Willow in a leadership position?  How should someone gauge your competitive standing in a sector that is still evolving?

Our process is biosynthesis – we use a living organism to produce cannabinoids.  The yeast cell allows us to essentially do what the plant does, but in a more controlled environment and a more controlled way.

When you look at synthetic cannabinoids, on the other hand, you could be talking about cannabinoids that are potentially harmful to humans.  That is definitely not what we’re doing. Those are all made using chemistry, and in illegal labs, by the way.  Being able to biosynthetically produce a phytocannabinoid is very distinct from a chemistry approach and from the concept of synthetic cannabinoids, which can be dangerous.

We’re certainly one of the leaders in the space.  The challenge for the competition, or anybody who thinks about biosynthetically deriving cannabis product, is that the science is not easy.  We have over 20 PhD-level scientists who work on this.  It is challenging in terms of not just generating the strains that are needed to produce the cannabinoids, but all the way through to manufacturing.

From a competitive landscape standpoint, Willow is definitely a leader.  We’re not aware of any other companies that are at the stage that we’re at in terms of being able to produce at a commercial level.  I don’t see a lot of competition.

Story by ProactiveInvestors