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Israel’s CanBreed gets hemp growing and breeding license in California

Startup uses gene-editing technology to create cannabis seeds that are uniform and high quality, in a bid to increase profitability in the industry with more resilient species

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Cannabis seeds developed by CanBreed (Courtesy)
Cannabis seeds developed by CanBreed (Courtesy)

CanBreed, an Israeli genetics and seed company that develops and enhances uniform and stable cannabis seeds, said Tuesday that its fully owned subsidiary CanBreed Farms Inc. has received a license to grow and breed hemp seeds in the farm it owns in San Diego County in California.

The company bought the 1.4-acre farm last November for around $1 million. The license is valid for one year and is renewable annually.

At the farm, the construction of a hemp seeds production facility is underway. The farm’s initial planned capacity is 12.5 million seeds a year, which will gradually increase to 50 million seeds a year.

Nearly 500 thousand acres of hemp is currently grown in the USA and is forecasted to increase fivefold by the end of the decade, reflecting a potential addressable market of at least $5 billion for hemp seeds in the US alone, compared with a $1 billion potential market today, the company said in a statement.

CanBreed CEO and co-founder Ido Margalit at the startup’s cannabis R&D site in Givat Chen (Courtesy)

At the site of the San Diego farm the firm is also building labs, greenhouses, and facilities to produce the seeds. The company expects the farm to become fully operational during the fourth quarter of this year, and commence production of the first batches of seeds for the US market towards year’s end. In mid-2021, the company will begin recruiting professional staff to operate the farm, the statement said.

The grant of the hemp growing and breeding license by the State of California will enable the company to commence activities as soon as the construction works are completed.

Founded in 2017 by Ido Margalit and Tal Sherman, CanBreed’s goal is to increase the profitability of cannabis farming by enabling growers to supply uniform and high-quality seeds for the cannabis industry.

The company said in December that it has completed the development of the first stable and uniform hybrid cannabis seeds, with 100% of the traits of their parent plants using genetic editing tools. Unlike most agricultural crops that are grown from stable seeds, cannabis plants are presently reproduced through cloning, by using cuttings from mother plants. Cloning is done to ensure genetic identity between the offspring and the mother plants, which until now could not be achieved by growing cannabis from seeds because there were no stable, or genetically identical, cannabis seeds.

The cloning process, however, is not ideal: cloning ensures a genetic identity between the offspring and the mother plant, but on the other hand, the cloning methods that exist today, such as tissue cultures, do not prevent the aging of the mother plants. Thus, similar to the natural aging processes that take place in any living organism, including humans, mother plants accumulate age-related mutations and changes in the genome that cause differences in the chemical profile of the plant. This leads to the fact that despite being genetically identical, the chemical profile of offspring differs from those of the young mother plants.

CanBreed believes that with its production of stable cannabis seeds, using gene editing technology, it will enable farmers to grow greater quantities of high quality cannabis plants using seeds, “making cloning redundant,” CanBreed CEO Ido Margalit said in a recent interview.

The company has also received a commercial license to use the gene-editing technology CRISPR-Cas9 in its work to enhance the genetic properties of its seeds with its core platform, YieldMax.

CRISPR technology, developed by Corteva Biosciences and the Broad Institute of MIT, enables precise editing of organisms’ DNA to activate or inactivate genes, holding promise for medical and agricultural application.

Last November, CanBreed said it had successfully edited a gene that confers resistance to powdery mildew disease in cannabis by using CRISPR-Cas9 technology.

The company is based in Givat Chen, Israel, where the use of medical cannabis is legally permissible, and operates one of the largest R&D centers and seeds production facility in the country.

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