FSD Pharma Looks to Grow Cannabinoids in Algae


Ryan Allway

February 6th, 2019

Exclusive, News, Top Story


Algae-based technologies have become a popular source of everything from alternative fuel to nutritional supplements. Like bacteria, algae can also be used to produce a wide range of bioactive recombinant proteins that can be leveraged to create a wide range of other molecules—including high-value therapeutic molecules. Cutting-edge researchers are looking at ways to create synthetic cannabinoids using these platforms as well.

FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FRK: 0K9) recently signed a letter of intent with Solarvest BioEnergy Inc. (TSX-V: SVS) to apply Solarvest’s algae platform to develop pharmaceutical grade cannabinoids. The move could dramatically disrupt current cannabinoid procurement methods by reducing the time, space, and costs associated with cannabis cultivation, particularly for medical cannabis subject to GMP certification standards.

In this article, we will take a closer look at what makes algae a unique platform for cannabinoid production, as well as how the new agreement with Solarvest fits into FSD Pharma’s plans to become a leading cannabis producer.

Why Algae?

Most investors have probably heard of algae being used as a source of renewable energy since it consumes carbon dioxide and emits hydrogen and oxygen. A lesser known attribute of algae is that it’s chloroplasts are capable of manufacturing of bioactive recombinant proteins, which means that algae can be genetically-engineered to produce a wide range of therapeutic proteins that can be used to create millions of different molecules.

There are several benefits from algae-generated proteins:

  • They are devoid of any known human pathogens.
  • They are comparatively very inexpensive to produce.
  • They produce consistent, high yield concentrations of final products.
  • They can produce very complex therapeutic proteins.
  • The production environment can be carefully controlled.
  • Replicable processes expedite product development.

Solarvest BioEnergy Inc. (TSX-V: SVS) has already introduced algae-generated omega-3 products into commercial markets and successfully created bone morphogenetic protein (BMP)—a high value complex compound used in orthopedic surgery to accelerate and enhance bone growth. The company has also built a portfolio of nearly 70 patents that have been filed and granted around numerous therapeutic areas.

Landmark Agreement

FSD Pharma and Solarvest plan to develop a research project for the purpose of developing a proof of concept that algae can express cannabinoids. Once the proof of concept is complete, the companies will enter into licensing agreements whereby Solarvest will provide exclusive worldwide rights to the cannabinoids to produce prescription drugs that can treat diseases affecting the nervous system—FSD Pharma’s primary target indication.

“If successful, this could dramatically disrupt current cannabis cultivation methods for medical purposes,” said FSD Pharma President Zeeshan Saeed. “It could reduce the majority of time, space, and costs associated with cannabis cultivation for medical purposes, specifically cannabis with GMP Certification. We are very pleased to collaborate with Solarvest on the development of promising alternative methods of cannabinoid production.”

In addition to the licensing agreement, Solarvest will pay a royalty fee to FSD Pharma on sales or licensing of any cannabinoids other than those targeting the nervous system, equal to five percent of net sales or net license fees. These royalties will be reduced to three percent after Solarvest has paid an aggregate of $3 million in royalty fees. These royalties could create a meaningful high-margin revenue stream if the technology is successful.

Looking Ahead

FSD Pharma Inc. (CSE: HUGE) (OTC: FSDDF) (FRK: 0K9) aims to become the largest licensed indoor hydroponic producer of cannabis in the world by converting a former Kraft Foods plant in Cobourg, Ontario into a state-of-the-art cultivation facility. The company’s recent agreement with Solarvest underscores this commitment to become a leading cannabis producer and demonstrates management’s outside-of-the-box thinking in that regard.

For more information, visit the company’s website at www.fsdpharma.com.

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Ryan Allway

About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.


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