22nd Century to begin cannabis research at new medical campus labs

As it begins a new research partnership on medical cannabis and industrial hemp, a Clarence plant biotechnology company has leased lab space on the downtown medical campus.

22nd Century Group Inc. (NYSE MKT: XXII) will occupy several laboratories and offices on the first floor of the Cleveland Biolabs Inc. facility on the Buffalo Niagara Medical Campus.

Paul Rushton, the company’s vice president of plant biotechnology, has begun interviewing both graduate-level PhD scientists and lab technicians to assist in the work. The lab should be up and running by early June, with researchers focused on ways to produce cannabinoids by genetically altering tobacco plants. The work builds on the company’s prior work in modifying tobacco plants to produce very low levels of nicotine and higher levels for its commercial cigarettes and products for smoking cessation.

The company had been working on opening the lab for several months, but wanted to finalize the research opportunity first. 22nd Century has a licensing agreement with Anandia Laboratories Inc. of Vancouver, Canada, for its work on genes required for cannabinoid production in the cannabis plant. The idea here is to insert those genes into the tobacco plant, a plant Rushton says offers many possibilities.

“You can’t make cannabinoids just anywhere,” he said. “If you try to make them in yeast or plant cells, they’re cytotoxic so they’ll kill the cells stone dead. You have to find a way to cleverly do what cannabis does in nature. Tobacco has a number of similarities which makes it a good potential biofactory.”

In addition to the two new labs downtown, the company has options for additional space in the CBLI building so it is ready to expand when the opportunity arises.

“Today’s announcement is like the tip of the iceberg, an important step that marks the beginning of us becoming a true plant biotechnology company,” he said. “It gives the company a whole lot more to be working on and potentially profiting from.”

That will be important moving forward as the company works toward profitability: The company finished 2015 with an operating deficit of $12 million. But revenue last year reached $8.5 million, up from $530,000 the year before. Founded in 1998, the company went public in 2011 through a reverse merger.

The company also hopes to ramp up to do additional research here on industrial hemp, which can be used for oil, fiber, food and many other products. While only a limited number of states in the U.S. are legally allowed to grow hemp, Rushton said the company wants to be ready as laws change to allow cultivation elsewhere.

It is now working with university partners to apply for federal permits that will allow hemp to be grown for research purposes, he said.

“We’re making sure we’re ahead of the curve. We want to position ourselves to be right at the forefront,” Rushton said.

22nd Century owns or exclusively controls more than 200 issued patents and more than 50 pending patent applications in the area of plant biotechnology, most related to genetic modification of the tobacco plant. Anandia holds the rights to similar work on cannabis plants, which has been licensed in the U.S. to 22nd Century.

Because of U.S. restrictions on cannabis research, some of the research will be done in Canada, while lab work and genetic testing will be conducted in Buffalo at the medical campus labs.

Both efforts give the company additional product line possibilities in addition to its cigarettes, including a line of low-nicotine products it sells to the U.S. government for smoking cessation research and commercial tobacco products with varying levels of nicotine it sells in the U.S. and several other countries.

Tracey Drury covers health/medical, nonprofits and insurance