The continued acceptance of cannabis in the U.S. and other markets is driving increasing recognition of the need for plant genetics tailored to large scale production. The growing demand for hemp/cannabis products means that the industry will increasingly face a key fundamental challenge – growers require stable, consistent, and predictable plant lines to scale commercial production and keep up with demand. 22nd Century’s plant science focus will serve as the critical link to develop and provide hemp/cannabis plants with valuable cannabinoid profiles and desirable agronomic traits for life science, consumer product, and pharmaceutical end-use markets.
22nd Century has been at the forefront of hemp/cannabis research since 2014 when the Company entered into a global research and license agreement with Anandia Laboratories in Canada through which 22nd Century was granted an exclusive sublicense for global IP rights to commercialize key aspects of cannabinoid biosynthesis in the hemp/cannabis plant and microorganisms. These licenses were transferred to Aurora Cannabis when it acquired Anandia in 2018. The two companies are working closely to enforce their IP against infringing parties, as well as to actively explore commercial development opportunities.
Since 2019, 22nd Century has been building its network of strategic partnerships needed to maximize and support each component in the upstream segment of the cannabinoid value chain. Components of 22nd Century’s proprietary value chain include: plant profiling tailored to the needs of customers (CannaMetrix), genetics to deliver differentiated traits to maximize yield of a specific cannabinoid or deliver a certain taste or fragrance profile (KeyGene), and commercial-scale plant breeding and cultivation of disruptive plant lines as well as year-round ingredient extraction/purification (Extractas Bioscience, Sawatch Agriculture, Folium Botanical, Aurora Cannabis, Needle Rock Farms, and Panacea).
The Company now controls the most comprehensive and innovative upstream cannabinoid value chain in the industry, an asset critical to unlocking commercial success for large-scale cultivation and extraction as this emerging industry continues to scale with the continuing success of global legalization and commercialization efforts and the entrants of new players from adjacent industries including tobacco, pharmaceutical, and other consumer products companies. The ability to accelerate the delivery of valuable, commercial-scale plant lines and IP in two-year cycles is key to 22nd Century’s value proposition. 22nd Century expects to monetize its lines and IP beginning in the second half of 2021 with upfront license fees from its Aurora IP partnership plus revenue from offtake commitments for its entire 2021 crop to be harvested this fall on its Colorado farm property. The Company is also accelerating its next generation plant lines for 2022 and 2023 revenue programs as it further leverages its highly disruptive breeding capabilities designed to give commercial customers a differentiated market advantage.