The rich sci­ence of mar­i­juana

Race is on for Cana­dian firms to beef up re­search teams to gain in­tel­lec­tual prop­erty edge

Saskatoon StarPhoenix - - NEWS - VAN­MALA SUBRA­MA­NIAM

Greg Baute re­al­ized two years ago that he was stuck in the wrong job. He was work­ing in Mon­santo’s veg­etable seed divi­sion in Cen­tral Val­ley, Calif., re­search­ing the ge­netic traits of toma­toes and how they could be used in the global tomato-breed­ing pipe­line. Then Cal­i­for­nia in Novem­ber 2016 voted to le­gal­ize recre­ational cannabis.

“There was more known about toma­toes 100 years ago than there is about cannabis to­day from a ge­net­ics per­spec­tive,” Baute said, over the phone from his home on Van­cou­ver Is­land. “I saw the op­por­tu­nity to do some re­ally su­per fun ex­per­i­ments with it.”

In Jan­uary, he made the leap, be­com­ing di­rec­tor of Breed­ing and Ge­net­ics at Anan­dia Labs Inc. — one of the old­est cannabis re­search cen­tres in Canada — which was re­cently ac­quired by in­dus­try gi­ant Au­rora Cannabis Inc.

The po­ten­tial of the cannabis plant, Baute said, is “so huge it’s hard to even quan­tify.” In Canada, con­sult­ing firm Deloitte pre­dicts the le­gal recre­ational cannabis mar­ket will gen­er­ate $7.17 bil­lion in sales. An­other re­port by the Bank of Mon­treal, which as­sumed a blue-sky sce­nario in which the United States and all 28 coun­tries in the Eu­ro­pean Union le­gal­ize mar­i­juana for recre­ational and med­i­cal use, pro­jected that the global cannabis mar­ket could be worth $194 bil­lion in seven years.

The in­dus­try’s growth po­ten­tial is why Cana­dian cannabis com­pa­nies are rush­ing to beef up their re­search teams, hir­ing sci­en­tists, ge­neti­cists, hemp re­searchers and molec­u­lar bi­ol­o­gists, and, more im­por­tantly, en­list­ing the ex­per­tise of patent lawyers since the com­pa­nies that can clinch and lock in lu­cra­tive in­tel­lec­tual prop­erty will un­doubt­edly have an edge, es­pe­cially in an in­dus­try as young and com­modi­tized as cannabis is.

No doubt the race for IP was on Canopy Growth Corp.’s mind when it scooped up a small hemp re­search com­pany in Colorado called Ebbu LLC in a stock-and-cash deal worth $425 mil­lion just days be­fore Canada le­gal­ized adult-use cannabis. Ebbu has a slew of patent ap­pli­ca­tions un­der its belt, in­clud­ing ones that Canopy claims will “vastly re­duce the cost of CBD pro­duc­tion” and oth­ers di­rectly re­lated to cannabis-in­fused bev­er­ages.

“I don’t think the in­dus­try has fully em­braced the role that in­tel­lec­tual prop­erty of the cannabis plant will play in the next phase of growth,” said John Ka­gia, chief knowl­edge of­fi­cer at New Fron­tier Data, a cannabis-fo­cused data and an­a­lyt­ics firm based in Wash­ing­ton, D.C. “For so long, there had been so lit­tle re­search on the plant. Now we’re see­ing many prod­ucts that are too sim­i­lar across the mar­ket. Com­pa­nies that se­cure unique IP first will have a com­pet­i­tive ad­van­tage.”

There are myr­iad pos­si­bil­i­ties when it comes to the in­tel­lec­tual prop­erty of cannabis, which Ka­gia cat­e­go­rizes into three groups.

One group­ing is IP that con­cerns spe­cific plant ge­net­ics, the kind of cross­breed­ing work that Baute now does at Anan­dia Labs.

“Patents can be is­sued based on the chem­i­cal com­po­si­tion of a specif­i­cally bred cannabis plant,” Ka­gia said. “Those patents ba­si­cally say, through our cross­breed­ing pro­gram, we have iden­ti­fied a new vari­ant, or a new strain of cannabis that ex­presses its ge­net­ics in a very spe­cific way.”

But there’s a dif­fer­ence be­tween how the U.S. and Canada is­sue patents when it comes to the cannabis plant it­self. In Canada, un­like the U.S., a patent can­not be is­sued for “higher life forms,” mean­ing that a unique nat­u­ral strain of the cannabis plant it­self can­not be patented.

If a new va­ri­ety of the plant is cross­bred, the cre­ator can ap­ply for a “Plant Breed­ers Right,” a form of in­tel­lec­tual prop­erty pro­tec­tion that gives the breeder ex­clu­sive con­trol over the va­ri­ety for be­tween 20 and 25 years.

As an ex­am­ple, a plant breed­ers right can be granted for a mod­i­fied plant cell, but not for find­ing an ex­ist­ing cell in the plant.

But ob­tain­ing the in­tel­lec­tual prop­erty right to a mod­i­fied cell, ac­cord­ing to Miche­line Grav­elle, an in­tel­lec­tual prop­erty lawyer and man­ag­ing part­ner at Bere­skin & Parr LLP, is good enough to go af­ter some­body in­fring­ing on the whole plant.

“You keep hear­ing that you can’t patent plants, but you can patent a mod­i­fied cell, so that’s re­ally good enough,” she said.

Essen­tially, Grav­elle said, there has to be some sort of “in­ven­tive in­ge­nu­ity” put into the plant, such as in­tro­duc­ing a new ver­sion of the gene, in or­der to ap­ply for in­tel­lec­tual prop­erty pro­tec­tion.

But the IP cat­e­gories that are most lu­cra­tive, ac­cord­ing to Ka­gia, are those that don’t re­late to the ac­tual ge­net­ics of the plant, but to pro­cess­ing and phar­ma­ceu­ti­cal ap­pli­ca­tions.

For ex­am­ple, a patent can be granted on a unique way to ex­tract cannabi­noids — the ac­tive con­stituents of cannabis — sus­pend them, and then evenly dis­trib­ute them to cre­ate a con­sis­tent in­fused-prod­uct such as a drink.

“Th­ese patents are less de­pen­dent on plant ge­net­ics, but rather on the chem­i­cal process of ex­tract­ing the cannabi­noid and in­te­grat­ing it into a new chem­i­cal prod­uct,” Ka­gia said. “This is the kind of work Ebbu has been do­ing on cannabis-in­fused drinks, which is why I be­lieve the ac­qui­si­tion is go­ing to be a huge op­por­tu­nity for Canopy on the edi­ble side of the prod­uct en­vi­ron­ment.”

Per­haps even more valu­able is de­vel­op­ing IP re­lated to the med­i­cal po­ten­tial of cannabis — cre­at­ing a new prod­uct, say, a par­tic­u­lar ther­a­peu­tic drug, based on blend­ing con­stituents of the cannabis plant, such as spe­cific ter­penes and cannabi­noids, to try to come up with a new com­bi­na­tion.

“Big Pharma is more in­ter­ested in the lat­ter two cat­e­gories of IP — the pro­cesses of ex­trac­tion and re­dis­tri­bu­tion of the cannabis com­pounds, and the re­for­mu­la­tion to cre­ate a new cannabis ther­a­peu­tic,” Ka­gia said.

Although Cana­dian li­censed pro­duc­ers are pump­ing re­sources into the sci­en­tific side of the sec­tor, for­eign phar­ma­ceu­ti­cal com­pa­nies are the ones lead­ing the patent charge and they have col­lected the most Cana­dian cannabis patents in the past year, ac­cord­ing to a New Fron­tier Data re­port.

The top three patent col­lec­tors in Canada are Switzer­land-based Ciba- Geigy AG with 21, Con­necti­cut-based Pfizer Prod­ucts Inc. with 14 and GW Phar­ma­ceu­ti­cals Ltd., a U.K.-based com­pany spe­cial­iz­ing in med­i­cal cannabis ther­apy, with 13.

Among GW Phar­ma­ceu­ti­cals’ patents is one that re­sulted in Epid­i­olex, the first CBD -de­rived oral med­i­ca­tion for the treat­ment of epilepsy.

In June, the U.S. Food and Drug Ad­min­is­tra­tion ap­proved Epid­i­olex as a pre­scrip­tion drug in all states where med­i­cal cannabis is le­gal, though that doesn’t im­ply Epid­i­olex is patented in the U.S. be­cause cannabis is not le­gal on a fed­eral level. A com­pany can ap­ply for a cannabis-re­lated patent, but the U.S. Patent Of­fice won’t nec­es­sar­ily ap­prove it.

G WP harm am ace utica ls is also in the process of en­gi­neer­ing a drug — which has re­ceived Cana­dian patent ap­proval — that will com­bine a spe­cific mol­e­cule within the cannabis plant with CBD to treat brain can­cer.

“I think we’ll slowly start see­ing more li­censed pro­duc­ers get on the IP radar,” Grav­elle said. “The re­search land­scape for the recre­ational side of things is go­ing in a di­rec­tion where you’re ex­tract­ing an ac­tive in­gre­di­ent and then re­pro­duc­ing it in a new prod­uct, say, a cold or hot bev­er­age.”

The Cana­dian patent database, ad­min­is­tered by the Cana­dian In­tel­lec­tual Prop­erty Of­fice, yields 345 patent ap­pli­ca­tions re­lated to the search term “cannabis.”

They range from a joint ap­pli­ca­tion filed in 2011 by British, Ital­ian and Span­ish sci­en­tists on how p hy toc anna bi no ids—a com­po­nent of the cannabis plant—can be used in the treat­ment of can­cer, to a more re­cent ap­pli­ca­tion from Amer­i­can re­searchers who claim to have found a method to make con­cen­trated cannabis oil “sta­ble, emul­si­fi­able and flavour­less” so it can be used in hot bev­er­ages.

But Canada places an 18-month “blind zone” on all patent ap­pli­ca­tions, so there is no way of re­ally know­ing what cannabis re­searchers in Big Pharma or the li­censed pro­duc­ers have been work­ing on for the past year and a half. Given the scale of cap­i­tal that has been pumped into the cannabis sec­tor over that time, Grav­elle said it is fair to as­sume there has been a sig­nif­i­cant uptick in the num­ber of patent ap­pli­ca­tions.

“Look, patents give you the abil­ity to keep some­one else off the mar­ket for 20 years,” he said. “If you end up with a broad patent, that is quite sig­nif­i­cant, and if you’re look­ing to get money or to get bought up, or to part­ner with an­other com­pany, ev­ery­one’s go­ing to be ask­ing what IP you have.”

Most of the patent ac­tiv­ity, ac­cord­ing to Ka­gia, is tak­ing place in Canada, sim­ply be­cause of the le­gal sta­tus of cannabis.

“Although there are hun­dreds of small and mid-sized com­pa­nies in the U.S. do­ing cannabis re­search and fil­ing patents be­cause of the Sched­ule 1 sta­tus of cannabis, the patent and trade­mark of­fice will is­sue patents for cannabis-de­rived ap­pli­ca­tions, but it’s still very much an open ques­tion of whether those patents can ac­tu­ally be en­forced,” he said.

That ques­tion is per­haps, Ka­gia the­o­rized, why Ebbu al­lowed it­self to be bought up by Canopy Growth.

For Baute, the pri­or­ity, at least for now, along­side patentable re­search, is to just make sure there’s a de­gree of con­sis­tency and sus­tain­abil­ity to the ac­tual cul­ti­va­tion of the plant.

“There’s just so much to be done. We need to first fig­ure out how to cre­ate cannabis plants that are dis­ease-re­sis­tant, that aren’t as sen­si­tive to light con­di­tions and that flower at the right time, with the right phe­no­types,” he said. “We’ve got our work cut out for us.”

I don’t think the in­dus­try has fully em­braced the role that in­tel­lec­tual prop­erty of the cannabis plant will play in the next phase of growth . ... Com­pa­nies that se­cure unique IP first will have a com­pet­i­tive ad­van­tage.

TI­JANA MAR­TIN/THE CANA­DIAN PRESS FILES

In the nascent and grow­ing cannabis in­dus­try, Cana­dian com­pa­nies are pump­ing their re­sources into the sci­en­tific side as they try to clinch and lock in lu­cra­tive in­tel­lec­tual prop­erty of the plants. Most of the patent ac­tiv­ity is be­lieved to be tak­ing place in Canada be­cause of the le­gal sta­tus of cannabis.

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