An expanding tissue-culture laboratory with locations in Washington and Canada has entered into a joint venture with Australis Capital, a U.S. spinoff of Canadian marijuana producer Aurora Cannabis.

3 Rivers Biotech Inc., an agricultural technology company that specializes in commercial-scale micropropagation for marijuana, hemp and traditional crops including vegetables and fruit, will own 85% of the joint venture focused on marketing plant tissue culture offerings, to Australis Capital’s 15% ownership.

Under terms of the agreement, 3 Rivers will provide access to its “intellectual property and services, products and solutions” for Australis Capital clients, including future offerings such as tissue culture-based autoflower genetics and pest control, pathogen testing and genetic fingerprinting innovations.

In turn, Australis will contribute sales and marketing capabilities, and new opportunities through its industry network, according to a company statement.

Through its partnership with JRT Nurseries, a greenhouse operation and tissue culture lab in Mount Vernon, Washington, 3 Rivers can ship plants globally, and it is in the process of expanding its capacity in Washington, California and “other jurisdictions.”

“By teaming up with AUSA, we believe we will be able to access new sales and marketing channels and rapidly expand our global footprint for (plant tissue culture) of cannabis, hemp and traditional crops,” said Robert Allen, CEO of 3 Rivers.

With this joint venture and other U.S. investments, Australis Capital is building a foothold in the market.

The company is working to close a transaction to acquire 51% of ALPS, a horticultural crops consultancy, with the option to acquire the rest if completed, along with the acquisition of Green Therapeutics LLC, a multi-state marijuana producer with operations in Nevada, Missouri and Oklahoma.

Australis Capital trades on the Canadian Securities Exchange as AUSA and on the over the counter QB market as AUSAF.

British American Tobacco is selling flavored CBD vapes in the United Kingdom as it eyes new products beyond tobacco and nicotine.

But the parent company of Lucky Strike says it is not ready to enter the THC market yet.

The company’s Chief Marketing Officer, Kingsley Wheaton, told CNBC this week that CBD is an “exciting growth area for our business for the future.”

Last month the company launched a CBD vaping product called Vuse in England. Wheaton called the launch a testing and learning experience but did not disclose sales.

Wheaton said the tobacco company is holding off on THC inhalables because of limited market access.

“It’s a very different regulatory landscape as you go around the world, and many markets remain currently inaccessible for regulatory reasons,” he said.

British American Tobacco trades on the NYSE as BAT.

A blank-check investment company led by the co-CEO of North Carolina CBD maker cbdMD has raised $115 million to invest in consumer goods.

The new blank-check company, Adara, did not mention cannabinoid products in its November filing with the U.S. Securities and Exchange Commission. Instead, the company says it plans to invest in “companies in the consumer products industry and related sectors.”

One of Adara’s backers is Martin A. Sumichrast, who is co-CEO and chairman of the board for cbdMD, which is based in Charlotte, North Carolina, and makes and distributes CBD products. Other backers include a private-equity firm in Charlotte, Blystone & Donaldson.

Adara trades on the NYSE American as ADRA.U. cbdMD trades on the NYSE American as YCBD.

North Carolina CBD maker cbdMD has hired Sibyl Swift, a former U.S. Food and Drug Administration official as a consultant to lead the company’s regulatory efforts and prepare products for certifications.

Swift served in various roles at the FDA from 2014 to 2020, most notably as the associate director for research and strategy in the agency’s Office of Dietary Supplement Programs, where she worked on science, research, compliance, enforcement and policy initiatives.

In 2020, Swift served as the senior vice president for scientific and regulatory affairs for the Natural Products Association, where she addressed regulatory policies related to new drug investigation (NDI) notifications, FDA guidance and claims substantiation.

cbdMD chairman and co-CEO Marty Sumichrast said Swift’s experience and new role demonstrates the company’s commitment to meeting “the highest regulatory standards for quality and safety.”

cbdMD Inc. trades on the NYSE as CBDMD.

A publicly traded California biotech company announced Tuesday that four of its hemp seed varieties have been aproved by the national variety board of the Association of Official Seed Certifying Agencies.

Davis-based Arcadia Biosciences received eligibility for certified seed production for its GoodHemp brand varieties including Rogue, Umpqua, Santiam and Potomac.

All four varieties are seed-propagated, CBD-dominant varieties. Rogue, Umpqua and Santiam are currently available for seed sales, and Potomac will be available soon, according to a company statement.

According to AOSCA CEO Chet Boruff, seed certification helps to maintain variety purity, so growers can access the pure, high-quality seed they expect.

“Hemp varieties that have successfully passed through the AOSCA variety review process are eligible for the production of certified hemp seed, transplants or clones, following AOSCA standards,” Boruff said in a statement.

“The variety review is conducted by representatives of seed certifying agencies, academia, the seed industry and USDA, following requirements established in the U.S Seed Act, to make certain new varieties are distinct, uniform and stable.”

Growers in the nascent hemp industry have struggled to find high-quality seed, but the AOSCA national review board provides the assurances growers need, according to Randy Shultz, chief technology officer at Arcadia Biosciences.

“AOSCA certification signifies to the industry that GoodHemp seed is produced to the highest standards for genetic purity, uniformity, high germination and feminization rates and varietal identity,” Shultz said.

He added that the certification provides market access to growers in Florida, as the state requires producers to source only AOSCA-certified hemp seed for planting.

Arcadia Biosciences, which trades on the Nasdaq as RKDA, established a cannabis division, Arcadia Specialty Genomics, in 2019 with a 10-acre hemp cultivation facility on the island of Molokai, located between the islands of Oahu and Maui.

Since then, the company has been rapid-prototyping novel, non-genetically modified hemp varieties for its GoodHemp brand through its proprietary ArcaTech discovery process, which combines modern breeding science and genomics technology with market intelligence, according to a company statement.

(A version of this story originally appeared at Marijuana Business Daily and will be updated.)

An Irish pharmaceutical firm, Jazz Pharmaceuticals, has agreed to purchase United Kingdom-based GW Pharmaceuticals, one of the largest medical cannabinoid companies in the world, for $7.2 billion, the drug companies said Wednesday.

The proposed cash-and-stock deal would be the largest acquisition in the cannabis industry to date and a key move by a pharmaceutical company into cannabis. GW created the only plant-derived cannabis medicine approved by the U.S. Food and Drug Administration, Epidiolex.

It could also could spur increased research and development into the burgeoning field.

Under the terms of the transaction, each GW shareholder would receive $200 in cash and $20 in Jazz ordinary shares for each GW American Depositary Share, resulting in an aggregate consideration of $7.2 billion.

“What we’ve been able to demonstrate at GW over the last 20 years is that the cannabinoid platform is a real and compelling science,” Justin Gover, CEO of GW Pharmaceuticals, told analysts during a conference call.

“There is very significant growth potential within the approved indications.”

GW’s main product is Epidiolex, which the company said achieved approximately $510 million in annual sales within two years of its launch.

Epidiolex has been approved in certain countries for the treatment of certain seizure disorders.

Jazz Pharmaceuticals CEO Bruce Cozadd sees opportunity to expand sales in Europe.

“This product is not that far into its launch. The GW team has done an excellent job, but there is lots of room to grow in the existing indications, including THC, which was fairly recent,” Cozadd told analysts.

“Similarly, there is lots of room in Europe. If you look at other product launches in this space, that’s what we’ve seen over time, as physicians get more and more comfortable with the use of these agents in these patients that really need a different therapy to get additional benefit.”

Gover said there is unlocked opportunity beyond Epidiolex.

“It’s not just Epidiolex. For each one of the pipeline assets, we’ve been very thoughtful about the exclusivity approach,” he said. “We understand and appreciate good medicine needs to primarily be transformative for patients, but it also needs to … return value to investors.

“There is still more to come, even with Epidiolex itself. This is an IP estate that is going to continue to build.”

The proposed deal has already been approved by the respective companies’ boards and is expected to close in the second quarter of this year.

Before the GW deal, Jazz Pharmaceuticals had said it expected to report revenue between $2.32 billion to $2.38 billion in 2020.

Diverging strategies

The Jazz-GW transaction highlights diverging strategies by some large companies when it comes to deploying capital in medical cannabinoids.

GW differentiated itself in the field of medical cannabis by developing a suite of products via traditional regulatory-approval pathways, including through expensive clinical trials. GW became the largest medical cannabinoid company in the world in the process.

The UK company’s R&D spending amounted to $290.5 million in 2019 and the first three quarters of fiscal 2020.

GW employs 278 people in research and development, more than the 192 people involved in manufacturing and operations.

The company has exported its products to more than 30 countries, according to financial disclosures, for either commercial or research purposes.

GW’s intellectual-property portfolio includes 767 issued patents outside the United States and 57 issued patents in the U.S., according to the company’s annual disclosure.

Additionally, the company said it has 259 pending patent applications worldwide.

Issued or pending claims cover:

• Plants.
• Plant extracts.
• Extraction technology.
• Pharmaceutical formulations.
• Drug delivery.
• The therapeutic uses of cannabinoids.
• Plant-variety rights.

GW leases three growing facilities in the United Kingdom, measuring a combined 2.1 million square feet in size.

In December, Canopy initiated a lawsuit against GW in U.S. federal court, alleging that the U.K. company knowingly infringed upon Canopy’s intellectual property.

According to a complaint, GW uses a Canopy-patented method to extract the CBD that’s the active ingredient in its Epidiolex medication.

In a statement emailed to Marijuana Business Daily that month, GW said that, “based on our preliminary review of the complaint, we are confident in our position and will vigorously defend against this lawsuit.”

GW trades on the Nasdaq as GWPH. Jazz trades on the Nasdaq as JAZZ.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].

The first Big Tobacco company to join the hemp and marijuana industries is getting back out.

Pyxus International, one of the world’s largest tobacco suppliers, said Thursday that it will focus on its more profitable tobacco and liquid nicotine products after filing for bankruptcy in June.

Based in Morrisville, North Carolina, Pyxus was growing hemp in the U.S. and marijuana in Canada. But the company was hard hit by declining tobacco consumption and coronavirus-sparked supply disruptions.

Pyxus’ Canadian subsidiaries, Figr Brands, were not part of the initial bankruptcy filing but have since filed for bankruptcy protection in that country. Pyxus is looking for a buyer for its Figr companies.

“We maintain our belief that there is value in FIGR, and its growth can be accelerated with the right capital structure and partner,” Pyxus CEO Pieter Sikkel said in a statement.

Pyxus, formerly Alliance One International, was part of the influx of Big Tobacco and Alcohol into the cannabis industry.

Pyxus trades on over-the-counter markets as PYXX.

A federal judge in New York has dismissed an investor’s lawsuit accusing a hemp biotech company of lying to promote its stock price.

Based in Williamsville, 22nd Century Group researches the genetics of tobacco and cannabis plants and was accused of trying to manipulate its stock price through misrepresenting its business. Plaintiffs were seeking class-action status.

Judge John Sinatra Jr. dismissed the case last week, saying the company had no duty to disclose that it had paid for promotional articles.

22nd Century Group CEO James A. Mish applauded the dismissal and said in a statement the claim was “baseless.”

22nd Century Group trades on the NYSE American exchange as XXII.

Law 360 first reported the lawsuit’s dismissal.

Molson Coors Beverage Co. says it has launched CBD drinks in Colorado through TRUSS CBD USA, its joint venture with HEXO Corp.

The beverage line will be available in three flavors – Grapefruit Tarragon, Strawberry Hibiscus and Blueberry Lavender under the name, “Verywell,” Molson Coors and HEXO said Wednesday.

The companies first partnered in 2018 to launch beverages in Canada through another joint venture called Truss Beverages, which sells non-alcoholic cannabis-infused drinks.

“Our joint venture with Molson Coors Canada saw Truss Beverage Brands become the No. 1 choice for consumers in Canada, and we are expecting similarly great results in the U.S.,” said HEXO CEO and co-founder Sebastien St-Louis.

Production and distribution for the Colorado CBD beverages will be kept within state lines because Colorado is one of the few states with an established regulatory framework for hemp-derived CBD in food and beverages, the companies previously said.

The companies did not elaborate on where in Colorado the drinks would be sold. Pete Marino, president of the emerging growth division for Molson Coors, told Bloomberg that Colorado will be a testing ground for the new brand.

Molson Coors trades on the New York Stock Exchange as TAP. Hexo Corp. trades on the Toronto Stock Exchange as HEXO.