Shares of several legal marijuana stocks were jumping after Canadian cannabis company Cronos Group announced a $122 million deal with Boston-based Gingko Bioworks.
The two have partnered up to research ways to make cannabinoids, one of the active ingredients in marijuana, in a lab, instead of from plants.
The companies will be researching ways to genetically engineer THC, the active ingredient in cannabis.
Cronos Group is one of the largest publicly traded medical-marijuana companies while Gingko has producers such as Bayer and Cargill as some of its partners.
“Many pharmaceutically relevant cannabinoids are present only at very low quantities in the cannabis plant, making them economically impractical, difficult or impossible to extract at high purity and scale,” Cronos stated in a press release.
“The landmark partnership between Cronos and Ginkgo will leverage the expertise of both organizations to solve this challenge and make more accessible the benefits of cannabinoids in an economically sustainable way.”
“Cronos stands out as having partnered with high profile companies including MedMenEnterprises, Cura Cannabis Solutions, Mucci Farms, and Pohl-Boskamp GmbH,” GMP Securities analyst Martin Landry, said recently.
“These third party endorsements are telling and, in our view, representative of the high quality operations and management team that Cronos has assembled.”
Disclaimer: We have no position in Cronos Group Inc. (NASDAQ: CRON) and have not been compensated for this article.