Cronos and Ginkgo Partner to Produce Lab-Grown Cannabis

Cannabis producer Cronos Group Inc. announced it is partnering with Ginkgo Bioworks Inc. in a $122 million deal to genetically engineer the active compounds in marijuana. Ginkgo will work with Cronos to identify cannabinoids that appear in small quantities in the plant, extract the DNA and produce them in a lab.

Cronos will give Ginkgo about $22 million to fund research and development, and will issue up to $100 million worth of common shares in tranches as it achieves certain production milestones.

Jason Kelly, CEO of Ginkgo, said they met with several other cannabis companies and chose Cronos because it treats the industry as a technology venture rather than an agricultural business.

“They hadn’t spent a zillion dollars buying out too many farms. Their focus is to get the right stuff and make it the most efficiently with the highest purity,” he said.