Cronos Group Inc. and Ginkgo Bioworks Inc. are collaborating to produce cultured cannabinoids.
Under the exclusive partnership, Ginkgo, a Boston-based biotechnology company, will work with Cronos on the research and development of microorganisms capable of producing certain target cannabinoids.
Cronos will fund certain R&D and foundry expenses expected to be about US$22 million, subject to the achievement of certain milestones.
Upon Ginkgo's demonstration that the microorganisms are capable of producing the target cannabinoids above a minimum productivity level, Cronos will issue up to about 14.7 million common shares.
Assuming all milestones are met, the transaction's value would total US$100 million.
Cronos will have the exclusive right to use and commercialize the key patented intellectual property related producing the target cannabinoids globally.
Cronos, a Toronto-based cannabis company, intends to produce and distribute the target cannabinoids globally and has received confirmation that this method of production is permitted under the Cannabis Act of Canada.