Is New Cannabis Technology The Road To An IPO?

Jul 18, 2018

For every cannabis company gone public recently, there are still those waiting in the wings for the perfect moment for their own IPO. Some companies use new cannabis technology on the road to their IPO.

Segra International Corp. is one of those companies. Their market expertise is tissue culture technology. Long a standard of industrial-scale agriculture, Segra is bringing this cannabis technology to the marijuana industry.

Segra is an agricultural life sciences company that specializes in industrial-scale cannabis plant micropropagation known commonly in the industry as “plant tissue culture.” The company is developing industrial-scale cannabis micropropagation laboratories to produce healthy, robust plantlets for licensed cannabis producers globally.

Tissue culture technology is used instead of traditional cloning techniques because it is distinctly more suitable for large-scale cultivation. Segra’s Director of Tissue Culture, Dr. Sma Zobayed, discussed the advantages of these tissue culture techniques in the media recently.

Plants that are started with tissue culture rather than cuttings produce higher yields. With tissue culture, plants start out as clean, absent of pathogens like bacteria and viruses. Because the plants do not need to expend energy fighting germs, that energy is devoted to growth. The tissue culture process is highly controllable, too, thus allowing scientists like Zobayed to control hormones, add extra sugars and promote higher growth regulators for better cell division, leading to higher growth.

Zobayed uses blueberries as an analogy; with tissue culture, the plants yield four times the fruit than plants that originated from either cutting or cloning. Because cannabis plants have a short three-month life cycle, the clean start they have with tissue culture means they won’t typically need any other chemical treatment through harvest.

There are many challenges that come with commercial growing on a large scale, the least of which is trying to have a viable multiplication rate for the plants. Segra is exceeding its target by obtaining a four to seven times rate every 30 days. It is a fantastic rate for commercial production. However, the next challenge is coaxing the plant out of the multiplication mode into a form that growers want to see. Long, thin plants are much preferred over extremely bushy ones. The goal is to try to yield the same plant as if it had been grown from seed.

Zobayed says that there is so much more research that can be done on cannabis growth. He says research is lagging behind in Canada because the plant has been restricted until recently when the country legalized recreational cannabis use. Segra looks forward to more research since the plants are now legally available.

Many agricultural large growers rely on companies like Segra to provide plants started from tissue culture. The specialty field requires scientific talent as well as a significant initial investment in the tissue culture lab. Zobayed says it is all about finding the right team of specialists and explains that tissue cultures done in an academic setting are very, very different from commercial tissue culture.

Many companies are not succeeding in cannabis tissue culture because they don’t have the right talent. Even if a grower finds the right model, it is still exceedingly difficult to scale it up. Zobayed says if a company needs only 2000 plants per week, tissue culture labs might not be needed; companies can do their own cuttings and usually succeed at keeping the plants healthy. However, operations with over 10,000 plants per week add up to millions of plants per year, and a tissue culture lab is definitely a must. Cuttings and cloning just don’t work well on this scale—it takes too much space and too much labor, and way too many stock plants.

Tissue culture offers a sleeker, cleaner method. Segra needs just one small room for 100,000 plants. Zobayed says tissue cloning is the only way to go with operations of this size.

In the cannabis industry, most growers are trying to achieve this scale, and Segra is ready to meet that demand. The company is preparing their California and Canadian facilities to scale up to a 100 million plant capacity. That’s a lot of plants! Zobayed says they’ve got everything they need, and it will just take time. He explained in an interview with CFN Media Group: “If you start with five thousand plants for your stock, you should have 20,000 the next month. The following month from 20- to 80,000 plants. It is just a matter of time so long as the process is developed and you have the lab space. It is just the time, and having enough labor, and having the infrastructure.”

Once Segra has their established multiplication factor, their entire stock will multiply three to four times each month. Production becomes cheaper as those larger scales are reached. Zobayed says Segra has the right process and the right team of experts, and that it is just a matter of time before they get there.

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