Research and Development in the Cannabis Industry 2020
Cannabis has been making a splash in the wellness world in recent years, with the general public and medical community becoming increasingly supportive of its therapeutic potential. According to Grand View Research, the global medical cannabis market is expected to reach $55.8 million by 2025. The gradual legalisation of cannabis and the growing interest in CBD products results in the growth of R&D investments in the cannabis industry. Cannabis companies that give consideration to research, among other things, such as supporting the voices of advocates, may find new therapeutic uses for cannabis and manufacture innovative products that will generate higher competition in the market. The main goal of further research and development is to produce cannabis products that better meet the needs of all users.
Why do we need to research CBD and medicinal cannabis?
Cannabis and its compounds have extensive therapeutic potential. To know what benefits it may bring, we need to know some basics.
An ordinary cannabis plant contains more than 120 chemical compounds known as cannabinoids. The ones that have the most significant therapeutic potential are cannabidiol (CBD) and tetrahydrocannabinol (THC). CBD and THC have different effects, but both can interact with the body’s endocannabinoid system (ECS), which supports homeostasis. Both compounds are chemically similar to the body’s endocannabinoids and interact with cannabinoid receptors and enzymes in the ECS.
Such interaction impacts the brain’s release of neurotransmitters. These chemicals are responsible for transmitting the signals between neurons and play a significant role in pain, immunity, stress, sleep, and other functions in the body. Unlike THC, cannabidiol is generally well-tolerated and does not cause intoxication. THC is a psychoactive compound that causes most users to feel ‘high’ to varying physical and/or mental degrees.
The cannabis applied for therapeutic purposes includes pharmaceutical and medical cannabis. Pharmaceutical cannabis undergoes clinical trials and includes products with plant-based or synthetic cannabinoids. Some of them, such as Sativex, Epidyolex, and Nabilone, are legally sold in the UK. Licensed medical practitioners prescribe pharmaceutical products. Medical cannabis includes plant-extracted cannabis and can be prepared in oil, tincture or edible form, for example. Recreational cannabis is used for non-medical purposes and is illegal in most countries. It can be smoked or come as edibles, sprays, sublingual tabs and many other products.
The demand for cannabis is expected to grow with further decriminalisation and legalisation of medical and recreational cannabis all over the world. The growing cultivation of cannabis is primarily driven by demand for the beneficial effect of cannabidiol. Research and development in the cannabis industry are necessary to collect valuable data on the plant and its potential usages, also allowing to take the right actions to adjust the yield of the cannabinoid content of plants, and breed the strains that suit different health conditions.
However, the strict control of the cannabis crop has limited scientific research and created a considerable knowledge gap in the industry. Let’s see what the benefits of R&D are and the progress in different countries.
Why is R&D in Cannabis required?
The research aims to collect data that can help set industry benchmarks in various areas. R&D may be helpful in many cases, such as:
- Advance the understanding of the chemicals already present in different strains of cannabis and the therapeutic properties of cannabis for health conditions, as well as the potential effects of accumulated exposure over time.
- Optimise production processes to improve yields and minimise costs.
- Create new and innovative products that will better meet consumers’ needs and develop safer dosing methods for more precise ingestion of cannabis.
- Sufficient research may give more confidence to physicians on cannabis safety and efficacy and impact the number of prescriptions that patients receive.
- Cannabis innovation may drive new approaches in the extraction processes, allowing a higher and more precise yield of raw material.
- Research into cannabis benefits for other health conditions yet to be explored.
- To gain market share with innovative cannabis products.
- To be recognized and accepted by regulatory agencies such as Health Canada, the Food and Drug Administration, and the European Medicines Agency.
Where is Cannabis research needed most?
The CBD manufacturing process includes four main stages: cultivation, processing and extraction, refining, and isolation of valuable cannabinoids. Along with this, manufacturers and scientists collect the data on cannabis through clinical trials and studies and secure their conclusions with patents. At each step of the manufacturing and post-production cycle, there is room for sampling and data gathering. Let’s look at the potential for discovery in each stage of the process.
Growing hemp
The life cycle of potentially beneficial plants includes several stages, such as selecting the right seed, germinating the seeds, placing them in fertile soil with a balanced ratio of nutrients, monitoring the flowering stage, and harvesting at the right time. In the growth stage, scientists may alter growing conditions of the plants to increase the yield and the content of cannabinoids. One of the assumptions is that the environmental conditions, such as the intensity and wavelength of light, may impact the number of chemicals in the plant.
Some of the latest experiments conducted by scientists from Israel have found that the healthiest looking plants do not contain the highest terpene and cannabinoid concentrations and that a little stress (as would occur in the ‘wild’) would not hurt the plant. This does not impose real danger to the plant but imitates stress, potentially encouraging its natural development.
Their studies also include how fertilisation methods can impact the therapeutic properties of cannabis, how pruning may improve light penetration, how to find optimal temperatures, lighting, and irrigation for better production, and alternative pest control measures to prevent residual pesticides in the medical product. Harvesting also plays a significant role in the concentration of cannabinoids. Harvesting at the right time is necessary for the CBD-dominant strains. If the buds keep maturing, the strains can degrade.
Development of CBD-rich strains
Another area of research is developing CBD-rich cannabis strains. The amount of compounds depends on the specific strain and its genetics. As of now, there is no known way to increase the CBD level in the genetically THC-rich strains. Many current cultivars have been developed by recreational growers and therefore contain a high THC level. The aim is to create strains optimised for CBD content and other valuable compounds, such as CBG, CBN, and terpenes. Additionally, cannabis grown from seed can express many different genetic features unless it is a clone. Besides using clones from plants that have created CBD-rich strains, it is possible to discuss with breeders the potential features of the strains. It is also essential to have the samples tested by a laboratory. The best time for testing is 3–4 weeks after the seedlings grow out of the soil as this helps to select CBD-rich plants before flowering.
Auto-flowering seeds are also the way to get a CBD-rich seed. Due to their genetic history, they are more likely to contain more CBD. Auto-flowering seeds were created from older cannabis strains that are naturally rich in CBD.
Besides auto-flowering varieties, there are specific strains that typically have a higher CBD content than recreational strains, such as Charlotte’s Web and Cannatonic.
Development of Cannabis strains for specific health conditions
Scientists also investigate cannabis strains and plant compounds that work best for different health conditions. Strains vary in:
- Primary terpenes. There may be different terpenes, such as myrcene, pinene, limonene, caryophyllene, and others.
- Cannabinoid profile. This identifies if the strain is CBD or THC-dominant.
Depending on the chemical content, there may be strains that are more suitable for specific conditions, such as multiple sclerosis, diabetes and pain.
Cannabis & greenhouse cultivation development
Greenhouses are a low-cost way to cultivate cannabis. Advanced greenhouses allow cover for plants, climate control, the regulated exposure to sunlight, and year-round cultivation. However, traditional greenhouses consist of an outside wall and a roof, which leaves the construction exposed. Mould and other contaminants can damage the open steel structure and get into the growing area. One of the latest developments, hybrid greenhouses, help to protect the construction from environmental conditions. This system has a sealed air chamber, lasting from the roof to the ceiling and between the walls. That creates a natural insulation barrier which keeps all the heat from the steel structure. Due to the open steel structure, standard greenhouses have micro-climate zones. The air cavity helps to direct the airflow through the roof and wall cavity without additional ducts. Moreover, the system is designed in a way to kill pollen, fungi, insects, and cross-contamination in every room.
Advanced research facilities are also essential alongside growing. There are greenhouses for research purposes all over the world, and for universities, medical and agricultural companies. As cannabis gains popularity, the need to expand the scope of research into all facets of the plant continually increases. Agricultural departments may need such facilities to explore more efficient growing methods, as well as insect resistance, plant pathologies, production efficiencies, and ways to improve crop yields.
Cannabinoids extraction
Cannabis manufacturers utilise different extraction methods that fall into three categories: rosin press extraction, solvent-based extractions, and short-path distillation and isolations. Each of them has its benefits and uses in the cannabis industry.
- Rosin presses help to extract cannabis resin through heat and immense pressure. The resin contains high levels of cannabinoids and terpenes. The final extract may be of clarity, colour and consistency, depending on the raw material, temperature, and pressure used. Even though rosin press technology can not turn out as much as solvent-based extractions, it makes the process more affordable for small producers.
- Most extracts on the market are solvent-based extractions. In this case, solvents such as butane, ethanol or CO2 go through a closed-loop system. The necessary process is the same: solvents flush through a high-pressure chamber and wash cannabinoids and terpenes from the raw material. Then, the solvent is evaporated. Temperature exposure and other parameters help to get high-cannabinoid, full-spectrum extract or high-terpene, full-spectrum extract.
- Cannabis distillates and isolates are commonly used in vapes, edibles, and drinks. These products are the main ingredients for pharmaceutical research and chemical industries. The production process is highly technical: a raw cannabis extract is heated to different boiling points to get beneficial compounds and evaporated. As a result, a pure single cannabinoid extraction is formed. There are a variety of such extraction methods, from short-path distillation to flash chromatography. However, there are also advanced technologies, such as molecularly imprinted polymer beads, which helps to get distillate without chromatography. Some extraction systems make it possible to create an isolate with up to 99.9% purity. The advantages of distillate extraction are high potency and purity.
Extraction of terpenes
The talk about extraction methods would be incomplete without mentioning the valuable terpenes. Besides beneficial effects, these compounds add aroma and flavour into raw cannabis concentrate. Additionally, cannabis terpenes widen the spectrum of a cannabis isolate and help to experience the entourage effect. Terpenes are highly volatile compounds and can be lost in most common cannabinoid extraction processes. In comparison with other extracts, terpenes are delicate and require extra care so that their flavour is preserved. Standard cannabinoid extraction methods and the elimination of impurities, such as chlorophyll and fats, can be damaging for terpenes. As there is no ideal way to get terpenes from organic sources, the cannabis industry keeps searching for new isolation methods. In most cases, the choice of the extraction method is determined by cost-benefit advantages. Time is a factor also worth considering: the longer the process turns out to be, the less effective for commercial purposes the product becomes and leaves more impurities in the resulting product as well. Therefore, manufacturers emphasise the need for innovative and cost-efficient extraction solutions, such as microwave technology, to get the terpenes and other valuable compounds.
The use of synthetic CBD
To be approved as an Active Pharmaceutical Ingredient (API), CBD — or more specifically, CBD isolate — needs to be produced according to GMP standards. Only pharma-grade certification allows CBD isolates to be used for pharmaceutical purposes. Besides pharmaceutical applications, CBD isolate API can be used in the development of CBD-based drugs, clinical studies, research, and clinical trials. The pharmaceutical world prefers synthetic or chemically synthesized CBD due to the element of control. This is an API produced in the form of pure crystalline powder, that is chemically identical to plant-derived CBD. Thanks to a simple molecular structure, CBD can be created through organic chemistry in a lab with the use of organic hosts, such as yeast and sugar (biosynthetic cannabinoids), or petroleum-based industrial compounds (synthetic cannabinoids). The use of synthetic compounds ensures a high-purity and consistent pharmaceutical product, which is not always possible in naturally occurring, plant-based CBD products. Natural ingredients are more palatable and may contain impurities, such as pesticides and heavy metals, though vigorous testing should disqualify these products from the market. This makes chemically synthesized cannabidiol a more attractive alternative for the pharmaceutical market. One of the advantages of biosynthetic technology is the consistency of all cannabinoids besides THC or CBD. There are more than 100 cannabinoids in the cannabis plant, and while the most commonly known (THC and CBD) can be easily extracted from the plant, rare cannabinoids are not that accessible yet. Moreover, little research has been done on the lesser-known cannabinoids, such as cannabigerol (CBG), which currently makes it difficult to evaluate their potential and demand for them as pharmaceutical ingredients. Therefore, the use of synthetic cannabinoids may be inevitable due to their consistent quality and affordable cost
Smart Farming and Artificial Intelligence for the Cannabis Industry
Artificial Intelligence (AI) is taking over. Ranging from self-driving cars to smart home devices and robo-dogs, a new era of tech is dawning. When it comes to the cannabis industry, AI may also bring benefits, including improvement of research processes. Here is where AI may be useful:
- To discover cannabis strains based on compound properties and chemical content. With the use of artificial intelligence, growers can cultivate cannabis for the treatment of specific diseases and symptoms. It is even possible to grow consistent crops based on what strains are best-sellers.
- Growing and cultivation generate a lot of valuable data. Analysing specific data helps to prevent mould, fungus, and other issues related to environmental conditions. Moreover, monitoring the plant growth and external conditions helps to forecast yield and provide harvest date, as well as ideal watering times and other metrics, with remarkable precision. Sick plants are every grower’s nightmare, which is why this project is dedicated to creating a specialised database for diagnosis.
- AI is also used to monitor plant health. Internet of Things (IoT) enabled devices in greenhouses can control temperature, light, humidity and pH levels predefined by massive data. IoT helps to gain the best of natural resources, simplify production and reduce cannabis cultivation costs.
- Artificial intelligence also boosts ecommerce personalisation, such as targeted product search results and recommendations, and purchase-data analytics for online retailers.
Smart farming is utilised through various technologies, such as drones. Even though drones have been around since the eighties, due to reduced cost and advances in tech, they have gained more attention and functionality. Sensors and digital imaging capabilities not only let farmers see their fields from the sky but also provide many more benefits:
- Control growth areas. Many things carry a potential risk to cannabis growth. Plants can be distressed by heat, diseases, poor water quality, and pests. Near-infrared sensors on drones can provide growers with a view of the field and point out at-risk areas.
- Control fertilisation and irrigation processes. Chemicals, such as pesticides and herbicides, are nearly inevitable in large-scale farming. However, drones may help to reduce the impact of (or need for) fertilisers. When GPS and ultrasonic echoing sensors identify a concern, drones with sprayers are sent to treat weak areas. The same applies to the areas that need extra water and vital nutrients. Additionally, drones can reduce the need for manual labour and prevent exposure to chemicals.
Collecting data on the potential of cannabis
Data is the key. Collecting facts about cannabis helps to identify the potential of the plant and use this data to improve the health and wellbeing of its users. Data collection is done through clinical trials and studies.
More data from clinical trials will be valuable for the following reasons:
- Valid data supports broader cannabis use and adds unique advantages to cannabis products.
- It is also important for researchers to know what chemical or cannabinoid within cannabis causes a particular effect.
- Manufacturers can co-opt time and investments, reducing the costs on clinical trials.
- When backed by data from clinical trials and proper research, consumer concerns regarding products may be alleviated.
The research opportunities depend on the legal status of cannabis, which varies in different countries. Among the leading research hubs in the world are Canada, Israel and the Netherlands.
The cannabis legalisation under Cannabis Act 2018 has given Canada an advantage over the US regarding research. The Canadian government has funded millions of dollars into scientific research and community education projects for the general public on cannabis use. Additionally, the Canadian Institute of Health Research has launched the initiative Cannabis Research Strategy (ICRS) to boost government investments in medical and recreational cannabis research and provide Health Canada massive amounts of data to study the therapeutic impact of cannabis.
Israel is considered one of the global leaders in cannabis research and innovation. The Israeli Ministry of Health supports cannabis research and invests millions of Shekels per year, which makes Israel one of those countries where the government funds cannabis research. In 2016, the government adopted Resolution 1587, introducing the idea of ‘cannabis for medical and research purposes’. Israel recognises the need for further research and more evidence on cannabis benefits and therefore promotes research from plant science to clinical trials. Given this open attitude towards cannabis research, scientists and academics from all over the world relocate to Israel to pursue their studies.
As for the UK, cannabis research remains high on the agenda. In 2019 began the first university-backed cultivation of medical cannabis in a lab in Somerset. Together with King’s College London, they investigate the potential of cannabis for the treatment of inflammation and respiratory diseases. Such research is paramount to increase awareness and understanding and acceptance of cannabinoids and cannabis-based products amongst healthcare specialists, patients and the general public. In 2019, the leading European independent medical cannabis company, EMMAC, and Imperial College London announced a cannabis research programme to evaluate the entourage effect of cannabinoids for pain alleviation. Such a strategic partnership is vital to further the industry’s understanding of the medical benefits of cannabis.
Additionally, Drug Science, a leading British independent research organisation, launched Europe’s most prominent national medical cannabis registry. Project Twenty21 will track 20,000 participants until the end of 2021, producing the most large-scale data pool of evidence for the effectiveness and safety of medical cannabis in hopes of convincing UK legislators to make some necessary changes medical cannabis program.
As for the USA, cannabis is legal for medical purposes in 47 states and legal for recreational use in 11 of those. The 2018 Farm Bill has excluded hemp and its extracts from the CSA schedules, promoting research and sales activity. However, clinical research on cannabis in the US is rather difficult to conduct and involves interactions with many federal agencies. This includes obtaining a registration from the Drug Enforcement Administration (DEA), acquiring research-grade cannabis from the NIDA, and going through a review by the FDA of investigational new drug (IND) application and research protocol. It takes a considerable amount of time and money to obtain FDA approval for a clinical trial and acquire a Schedule I license to own and conduct research with cannabinoids. So far, the National Institute on Drug Abuse (NIDA) is the only federally lawful source of research-grade cannabis in the US. States that legalised recreational cannabis prohibit licensed producers from providing cannabis to doctors and scientists for research purposes. The House Education Committee has approved House Bill 463, relating to the creation of the Kentucky Center for Cannabis Research.
For this reason, the General Assembly planned to contribute towards approximately $4 million over the next two fiscal years. The centre would conduct cannabis research, ranging from pharmaceutical development and clinical studies to the review of possible side effects and risks, which aims to create a helpful structure for analysis. The National Institute of Health has already approved cannabis research at the University of Kentucky, where scientists also study cannabis effects on young adults while operating vehicles, and potential interactions between cannabis and opioids, for example.
Cannabis R&D tax relief
Many businesses produce CBD-infused products, including skincare, food and drink products as well as vaping oils. Aiming to support research and development activities in this area, the UK government has begun to offer R&D tax relief. It allows companies to reclaim money spent on the creation of a new product or the improvement of an existing one.
Tax relief also applies to companies that invest in R&D within the CBD industry, including:
- Creation of new technologies, e.g. for yield optimisation
- Development of new methods for the ethical and/or legal consumption and usage of CBD products
- Studies into CBD-based therapies to improve patients’ lives and further CBD understanding
Eligible costs may include the cost of development and testing with the use of in-house workers or subcontractors, the staffing costs, supplies and materials, software, prototypes, utilities, and payments to the subjects of clinical trials.
Companies with qualifying R&D activity may claim a tax deduction or a cash refund from HM Revenue and Customs. Profit-making companies get a chance to lower the corporation tax bill or get a corporation tax repayment.
Cannabis R&D protection
Massive investments in research and development in cannabis is expected to drive the global cannabis market. The emerging medical cannabis market provides considerable opportunities for innovation. All innovative players and their R&D activities require protection and support. There is a strong interest in patents related to the processing and production of cannabis products as well as further use of these products for treatment. Companies can use patent data for some of the following purposes:
- To protect the company’s assets and successfully cope with the growing competition.
- To find solutions in parallel industries.
- To collaborate with companies in similar industries on cannabis-related innovations.
- To find new opportunities within the cannabis industry.
With further cannabis legalisation, companies strive to conduct more research and pursue new patents. The number of patents is growing; the amount of cannabis patent holders in the USA has almost quadrupled since 2016.
While numbers are growing, the pharmaceutical giants are heading to Canada due to local legal issues. Given the current regulatory frameworks, acquiring a patent in Canada is a much cheaper and quicker option when compared to other countries, such as the US. Even though the US Patent and Trademark Office has been providing cannabis-related patents since 1942, the patenting process is unclear and not consistent due to differences in federal and state cannabis laws.
Given the rapid growth of the cannabis industry, receiving patents has several advantages, such as increasing the competitive environment and possible barriers to entry. It may take two years from the time of requesting examination to then actually obtaining a patent from Canadian authorities. Sounds like a long time, but it can take much longer in the United States. Additionally, the Canadian patent system offers what they call a ‘Special Order,’ which accelerates examination and may significantly reduce the time from review to patent grant. However, some subject matter is excluded from patentability in Canada. For example, plants are not patentable there, though it is possible to obtain patents for inventions linked to cannabinoid formulations. In any case, a balanced patent portfolio allows companies to protect their innovations and sustain against the competition.
On the other hand, securing intellectual property rights and getting a patent is a challenging process, as the discovery must be novel. Taking into account the many years of cannabis prohibition, there is a significant lack of data and documentation for cannabis, which is essential in the patent application. Additionally, the burden of monitoring the patent and the prevention of potential infringement rests on the applicant’s shoulders.
Bottom line
In recent years, cannabis has become a global phenomenon with over 2,000 players on the market. However, the regulatory hurdles and the lack of scientific evidence have made it difficult for healthcare professionals and patients to obtain suitable treatment. In this case, research on the potential benefits of cannabis and the development of new solutions is a crucial way to set clear standards and a precedent for optimal treatment with cannabis products and to drive continuous innovation.
Further R&D aims to fill gaps in the basic knowledge of cannabinoids and their interaction with the endocannabinoid system, which helps to develop more effective and safe cannabis products. The overall aim is to accurately assess and optimize treatments in terms of product, as well as dosage and delivery systems. The top priority is to offer patients remedies that are adjusted to their individual needs.
Besides studies of plant genetics, there is a need to study the rare cannabinoids, such as CBG and CBN, the terpenes and the development of new cannabis products. As the spectrum of cannabinoids and terpenes is broad, we should learn how to isolate the definite cannabinoids and combine all active substances in such a way that we achieve the best therapeutic effect.
Healthcare specialists also need clinical data to make sure that medicinal cannabis is consistent, effective, and safe for the patients. Patients can then also learn about treatment options with cannabinoids via medical professionals. Moreover, for cannabis to truly be accepted as a product with therapeutic potential, regulatory bodies such as the FDA, the European Medicines Agency, and Health Canada, require more significant clinical research into plant efficacy, which gives R&D the top priority in the industry.
GCI Summit provides research into developments of the CBD industry, in addition to insights into global networking gatherings, domestic community groups, and news.
