While edible and vape products are about to see new regulations for legal sale in Canada, some licensed producers are looking even further past those markets to new cannabis uses that still require additional research. 

Today Cronos Group Inc. (NASDAQ: CRON; TSX: CRON) announced it is continuing down that latter route by purchasing a fermentation and manufacturing facility from Apotex Fermentation Inc. 

Funded through existing cash on hand in an undisclosed amount, the deal sees Cronos acquiring an 84,000 sq. ft. facility in Winnipeg. The site is already equipped with large-scale microbial fermentation production areas and labs for microbiology, organic, and analytical chemistry research. 

The sale is due to officially close in Q3 2019, after Apotex completes a wind-down of the facility so Cronos can begin the process of altering specifications on existing equipment to work with cannabinoids.   

Before research and development can begin, the newly-acquired site will need to receive licensing approval from Health Canada. 

That issue has come front and centre in the legalized Canadian industry as a handful of companies have skirted licensing rules to produce extra cannabis for a marketplace that can’t ever seem to stock enough product. 

Most recently, a Health Canada audit discovered CannTrust (TSX: TRST; NYSE: CTST) had been producing cannabis in unlicensed grow rooms, while earlier this year Bonify was forced to cease all sales after it was discovered the company had been acquiring unlicensed cannabis to sell to consumers. 

In addition to waiting on that all-important Health Canada licensing, production at the facility also hinges on hitting certain milestones in the company’s partnership with Ginkgo Bioworks, Inc. that was announced last year. 

Discussing the facility’s acquisition, Cronos Group Chief Executive Officer Mike Gorenstein commented: 

Together with Ginkgo, we are bringing innovation and the power of biological manufacturing to the cannabis industry, aiming to allow for cannabinoid production at large scale and with greater efficiency than is currently possible with traditional cultivation and extraction. We continue to be very excited about the opportunities ahead.

The end goal of acquiring the site is to produce plants with larger quantities of different cannabinoids beyond the well-known THC and CBD variants, which can then be used in research towards cannabis-based treatments for chronic pain, nausea, anxiety, and weight loss. 

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