Oregon Investors Pump $80 Million into Cannabis startups


Investors have pumped tens of millions of dollars into the Oregon cannabis industry, according to a state senator who sits on the Oregon Marijuana Regulation Committee. He estimated that investments total between $60 million and $80 million.

And that’s only in the last six months, Sen. Floyd Propanski told Northwest Public Radio.

“The numbers we just received by phone says in the last six months there’s $60 million to $80 million dollars have gone into start-ups,” Propanski said.

The senator didn’t elaborate, or discuss where most of that investment cash has gone, but at least one recipient has been the research-focused Phylos Bioscience.

And while many investors are focused on ancillary businesses that don’t touch cannabis – mainly because it’s considered less of a risk, since ancillary companies are safe from prosecution by the federal government – others are throwing millions behind growers and retailers as the industry continues to flourish.

When Oregon voters approved medical marijuana almost two decades ago, supporters assumed there’d be more research into it’s health benefits.

But, it’s mainly into growing more marijuana cheaper- not finding the next FDA approved marijuana drug.

Let me take you on a short flight-of-fancy. Imagine, you’re starting your own pot farm. First you get land and water rights. And then, you’ve got to find the right strain of cannabis.

“Well so there’s a lot of legend and laws. So in general it’s like, my friend Billy gave me this. And he told me that he got it from this guy. And ….. this is the original thing. This is the lost cut of Panama Red from so and so in 1978,” Mowgli Holmes, chief scientific officer at Phylos Bioscienc, said.

Phylos Bioscience, an Oregon start-up that for $300, will outline the genetic profile of any cannabis plant you bring them.

Data scientist, Alisha Holloway, pulls-up a company website showing how closely plants are linked to other varieties.

“I’m showing you the Phylos Galaxy where every colored dot on this 3D representation is a sample that we received,” she said. “Those clumps that are really close to each other are clones groups.”

This kind of research is great for growers, it helps a farmer ensure she’s not going to get sued for infringing on someone else’s intellectual property.

Holmes says medical consumers for example, can’t be assured the strain they buy one week will be the same next week.

“People have to experiment until they find something that works for their back pain or their fibromyalgia,” Holmes said.

Phylos is only one of dozens of Oregon start-ups doing research on marijuana.
Senator Floyd Propanski sits on Oregon’s Marijuana Regulation Committee, which tracks how much money is being spent on cannabis.

“The numbers we just received by phone says in the last six months there’s $60m to $80 million dollars have gone into start-ups,” Senator Prozanski said.

There are businesses trying to perfect the process of extracting cannabis oil, for example. Businesses developing a dermal patch , so people can absorb marijuana through their skin.
This January, a group of entrepreneurs launched the ‘Oregon Hub,’ a farm and research center in Clackamas, aimed at perfecting growing techniques, like reducing water and energy use.

Seth Crawford and his brother run ‘Oregon CBD’ in the Willamette Valley. They’re working with industrial hemp, which is federally legal — as long as it contains less than 0-point-3 percent of the active cannabis ingredient, THC.

“We are federally legal. We have a bank account. We operate just like any other business,”
he said.

They’re aim is to invigorate America’s old industrial hemp market by breeding plants to grow in a variety of climates.

“You know you’re looking at humidity, mold and mildew resistance, a number of different types of potential pathogens that emerge in specific micro-climates that we try to adapt our plants for,” Crawford said.

So there is plenty of marijuana research going on in Oregon. But says state epidemiologist, Dr. Katrina Hedberg, it’s start-up research , not the kind of peer-reviewed, double-blind research that’s going to lead to FDA approved medications.

“Doing that kind of study is very difficult when it comes to a natural herb product,” Hedberg said.

Most FDA-level marijuana science is being conducted overseas. A British company recently developed a cannabis extract called Sativex. It’s been approved for to help with neuropathic pain in 28 countries - but not the US.

The FDA has also approved another drug called Marinol to treat nausea in cancer patients. It’s made out of synthetic THC, the compound in marijuana that gets you high.

But marijuana contains a hundred compounds or more, and experts says it’s the interaction between those compounds that give the plant its medical properties. The FDA’s drug approval process doesn’t deal with so many compounds at one time. So perhaps the future of Oregon’s medical marijuana market will be in the form of supplements and ‘whole plant’ edibles, rather than new FDA approved medications.