Innovation is budding in the medicinal cannabis sector, as startups like Byron Bay Bio pursue DNA testing to help breeders identify and protect desirable traits in plant medicine.
The venture is now deep into an equity crowdfunding campaign, attempting to join a growing cluster of Australian startups using the promise of medicinal marijuana to woo investors.
Conservative estimates put the global market value of medicinal cannabis at US$16.6 billion in 2022.
The market is only expected to grow in Australia, where medicinal cannabis was legalised in 2016 and is currently available by prescription.
That expansion stands to benefit cultivators who develop and stabilise strains of cannabis for medicinal use.
Byron Bay Bio believes DNA analysis, targeted specifically to the medicinal cannabis market, could help those cultivators patent and commercialise their innovations.
“We consider the pharmaceutical industry and medicinal industry coming into this sector,” Byron Bay Bio CEO and repeat entrepreneur Jeff Lang tells SmartCompany.
“They’re going to want that IP protection. They’re going to want their licensing. They want that standardisation and quality level.”
Internationally, startups and pharmaceutical giants are already pursuing intellectual property rights over medicinal cannabis strains.
Hundreds of patents related to the therapeutic qualities of cannabis have been registered in the United States, mostly by major pharmaceutical corporations.
Cannabis-linked patents already exist in Australia, but those related to novel cannabis genomes lag behind those registered in larger markets like the US.
Founded in 2019 by cannabis industry veteran Will Stolk, Byron Bay Bio says it has developed a proprietary genome sequencing process for the novel classification of cannabis strains.
Byron Bay Bio is now pledging to work alongside third-party research facilities to undertake that analysis.
Lang says the venture is already working with 14 cultivators across Australia, New Zealand, the United States, Thailand, and Colombia to identify novel genomes, with the goal of securing intellectual property protection.
In doing so, Byron Bay Bio joins a cluster of local startups, like The People’s Plant and Medigrowth, pledging to prosper from valuable cannabis genetics.
The purported benefits of genomic testing go beyond IP protections.
Lang suggests it could help growers produce crops with more reliable results, making it easier to predict the concentration of active ingredients like THC and CBD.
Cannabis products intended for medical market must meet standards set by the Therapeutic Goods Administration (TGA), Australia’s medicines watchdog.
This includes the concentration of cannabinoids like THC and CBD in the herbs, tablets, or oils prescribed to patients.
To meet TGA standards, the actual concentration of any active ingredient within herbal cannabis products must be within 80% and 120% of the stated content.
Reliably producing those results is “very hard to do with plant-based medicine, because we’re dealing with variation,” Lang says.
“Every plant, every crop has some variation.”
Using DNA testing to understand where those variations exist, and then fine-tuning those genes, could help breeders create and commercialise cannabis varieties with reliable cannabinoid concentrations.
“We can create a patent on the actual gene, in the particular varieties, for a particular outcome,” says Lang.
There is no suggestion the TGA’s requirements are inappropriate.
But Byron Bay Bio believes there is a market for cannabis products with more predictable concentrations of active ingredients.
“The difference between 20% and 25% could greatly affect a doctor’s prescribed use,” Lang says.
“You don’t want to be giving patients something with a higher strength [than their intended dose] or weaker.”
The other side of Byron Bay Bio’s vision for more predictable medicinal cannabis products is its plan to develop and release a handheld scanner.
The device, packed with near-infrared spectroscopy technology, will allow buyers to determine the THC, CBD, and terpene levels of any given cannabis at a glance.
The venture plans to split the difference between expensive laboratory-level equipment capable, and cheaper home-testing kits with limited capabilities.
“We’re going a lot deeper than that,” Lang says of existing enthusiast-level kits.
Byron Bay Bio plans for the device to scan for mould, too, which Lang calls a “big problem with cannabis products”.
Lang is circumspect on the proprietary chemical and microbial sensors powering the device, citing a pending patent application.
“What we can state is our handheld cannabis testing device is focused on testing both the strength of the cannabis compounds as well as the testing for any foreign material,” he says.
Byron Bay Bio plans to release the device for commercial use in 2025.
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
