Cronos Group (TSX: CRON) (NASDAQ: CRON) this morning announced that it has amended its collaboration and licensing arrangement with that of Ginkgo Bioworks. The amended arrangement has resulted in Cronos beginning the commercial production of CBG as of today.
The arrangement, as demonstrated by the commencement of commercial production of CBG, will enable the acceleration of commercialization of cultured cannabinoids at scale. Effectively, Cronos is now able to begin commercial operations of cultured cannabinoids ahead of the originally stated productivity targets, while incentives for Ginkgo’s are maintained.
With production of CBG beginning today, Cronos now expects to achieve the final productivity target for the cannabinoid by September 2021. Production follows the firm receiving a processing license in April from Health Canada.
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The amended arrangement between the two firms effectively establishes milestone events for the early commercialization of products that include target cannabinoids. Now, upon the sale of the first products containing such cannabinoids one-third of common shares in the related tranche are to be released to Ginkgo. Under the terms of the arrangement, up to 14.7 million shares of the issuer are to be issued based on eight separate milestone events, each of which relates to a specific cannabinoid.
Notably, while the first firm to commercially produce CBG from biological manufacturing in Canada, Cronos is not the first such firm to do so globally. Canadian peer Willow Biosciences (TSX: WLLW) beat the company to that milestone event, with Willow commencing the production of CBG at scale back in March.
Cronos Group last traded at $10.36 on the TSX.
Information for this briefing was found via Sedar and Cronos Group. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
