Cannabis processing startups hope to unlock new chemicals and treatments

NelsonG · July 11, 2019

Jeff Ubersax knows yeast.

The chief executive officer of Demetrix studied yeast genetics and biochemistry in school and was an early employee at Amyris Biotechnologies, a technology company that was using fermentation to make biofuels back in the early days of the first clean technology boom back in 2008.

Now, the same technology that Ubersax and Jay Keasling, the celebrated professor from the University of California at Berkeley who co-founded Amyris and Demetrix, used to make biofuels is being applied to the production of cannabis.

The company launched with an $11 million seed round led by Horizons Ventures, a Hong Kong-based investment fund backed by the multi-billionaire real estate mogul Li Ka-shing, to begin commercializing the technology that Keasling had been researching in his lab.

The goal was to refine a process that would enable yeasts to make a range of cannabinoids that are found in the marijuana plant which could be used to develop new pharmaceuticals, additives and supplements for use in clinical and consumer applications. The technology works much the same way as brewing beer. Except instead of fermenting to produce alcohol, the fermentation process produces cannabinoids from genetically modified yeast cells.

While the technology holds promise, it’s still got a long way to go before it becomes competitive with extracts from the marijuana plant, but given new capital infusions the tide is turning.

Demetrix, for instance, has raised another $50 million from Horizons Ventures and Tuatara Capital, an investment firm focused on the legal cannabis industry, to significantly expand its production while simultaneously pursuing initial tests on the efficacy of rare strains of cannabinoids as treatments for certain illnesses.

“Natural cannabinoids have been used for a really long time,” says Ubersax. And last June the U.S. Food and Drug Administration approved the first pharmaceutical derived from cannabis, Epidiolex, as a treatment for patients with epilepsy.