22nd Century Group (XXII) was founded in 1998 as a plant biotechnology company focused on producing both high- and low-nicotine variants of tobacco with consumer applications. The company has since expanded that biotechnology to cannabis to create commercially desirable cultivars.
Now, the 22nd Century Group team is on a mission to introduce disruptive genetics to the hemp market and, ultimately, to build a commodities business in the CBD space amid ever-evolving policy from the U.S. Food and Drug Administration (FDA).
The company is no stranger to the FDA, however.
“The FDA has regulated tobacco very strictly,” Steven Przbyla, 22nd Century Group’s head of hemp/cannabis business development, tells Cannabis Business Times. “We have one of the few FDA-regulated products that has a marketing order, you could say, which allows us to say on the packaging that it helps you smoke less, which is really innovative.”
22nd Century Group expanded into the cannabis market in 2015, applying its methods for tobacco genetic manipulation to cannabis plants. Those efforts have expanded to robust R&D around the cannabis genome with several national and international partners, Przbyla says.
“We feel like we’re worldwide leaders in being able to manipulate the cannabis genome to create commercially desirable strains,” he says, adding that “desirable” could mean plants that can be stacked more closely together in an indoor vertical grow, for example, or plants with higher flower biomass, increased cannabinoid levels, or resistance to mold or powdery mildew.
“We’ve got a strain that’s only CBG,” Przbyla says. “As these rare cannabinoids become more popular, being able to extract them from the plant, making that more economically desirable, that’s where we fit in on the research and development component of the business.”
Last year, 22nd Century Group entered the extraction and manufacturing side of the cannabis market through the acquisition of GVB Biopharma, one of the nation’s largest hemp extractors.
22nd Century Group produced approximately 100,000 kilograms of hemp extract last year, Przbyla says, which was mostly CBD extract. The company also produces less common cannabinoids, such as CBG and CBN, that Przbyla describes as dietary supplement- and pharmaceutical-grade quality.
“As we see the evolution of this product in this sector, we’re positioned, really, as the high-quality, commodity-scale producer of hemp cannabinoid extracts other than delta-9 THC,” he says.
22nd Century Group filed a drug master file with the FDA in December regarding its CBD isolate that will allow the company to serve as an API supplier of pharmaceutical-grade CBD isolate for clinical trials.
“Companies can come to us for their product needs if they’re doing clinical trials with CBD isolate using our specifications, essentially,” Przbyla says. “We’re not developing the drugs, per se, but we’re supplying the pharma. And we’re going to expand that portfolio of pharmaceutical grade APIs from CBD to CBG and then CBN, eventually. We think those are probably the most popular constituent APIs in drug development over the next 10 years.”
From a regulatory perspective, 2023 has been a busy year so far at the FDA, with the agency announcing the issuance of final guidance for clinical research last month, followed by an announcement that the FDA is calling on Congress to establish a new regulatory pathway for CBD.
Regarding the guidance on clinical research, Przbyla says “it was nothing new.”
“It said you need to follow clinical guidelines for drug development or new drug applications when you’re doing cannabinoid-based research,” he says.
The key takeaway, Przbyla adds, is that the FDA views cannabis as a multi-molecule botanical.
“If you isolate that into a simple molecule—whether it’s delta-9 THC or CBD or CBG—those are single-molecule compounds,” he says. “The FDA has a really clear pathway to evaluate single molecules in drug development. I think what they were saying is, in terms of botanicals, they need to think about how a botanical would be evaluated from a drug stability, safety and efficacy perspective because there are multiple compounds in the botanical that may be active, that may have implications in terms of side effects and therapeutic effects. It’s often difficult to tease out which molecules are causing the effect or whether it’s the entourage effect of those molecules that causes the therapeutic effect. Whereas in single-molecule pharma, you know because there’s only one molecule because it’s just CBD or it’s just Lipitor—it’s just that active molecule. Here, … it’s more complex because they don’t really have a robust framework on how to evaluate whole-plant extract. And I think they’re looking to create more guidelines around that.”
When it comes to the FDA calling on Congress to regulate CBD, Przbyla says the move doesn’t impact 22nd Century Group’s current business model since CBD has been a widespread consumer product following the 2018 Farm Bill and the federal legalization of industrial hemp.
“What FDA is saying here is, ‘Hey, we don’t know how to regulate this. We don’t know how to regulate it in food. We don’t know how to regulate it in dietary supplements. We need a new pathway because it doesn’t fit into the Federal Food, Drug, and Cosmetic (FD&C) Act,’” Przbyla says. “We think that that’s just a net positive for the industry. We think that it will allow us to work actively with Congress … to create a robust framework for controlled dosages for testing, labeling and those sort of key elements around this really innovative, new product. And we think that will probably happen with the 2023 Farm Bill, which they start drafting in March. So, that’s really imminent over the next couple of weeks.”
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While larger consumer packaged goods brands have not yet entered the CBD space, which Przbyla says is probably due to regulatory uncertainty, he expects them to jump in once Congress promulgates rules for the industry in the Farm Bill that the FDA can then implement.
“I think Congress will just drop in a new section to the FD&C Act and say, ‘This is how you regulate cannabidiol, period. Here’s the structure,’” Przbyla says. “It’s probably going to look a lot like dietary supplements with certain good manufacturing practices, traceability, pesticide testing, … labeling, maybe minimum milligram doses and maximum milligram dosages per serving, making sure you’re not approaching that pharmaceutical level like Epidiolex from GW [Pharmaceuticals]. But those are sort of the rough parameters of what I think will appear in the bill.”
In the meantime, Przbyla says 22nd Century Group will continue finetuning its hemp genetics with the ultimate goal of producing plants that yield more than 10% CBD.
While hemp prices fell after 2019, when there was an oversupply of biomass as new farmers entered the marketplace after the passage of the 2018 Farm Bill, Przbyla says prices are starting to stabilize.
“Now, in 2023, it’s becoming a little bit more profitable for farmers to grow hemp,” he says. “As it becomes more profitable to grow hemp, we want to add our genetics into that mix to allow us to extract it more efficiently to allow us to increase our margin on CBD distillate, isolate, CBG, etc.”
In the longer term, the 22nd Century Group team thinks CBD will become commoditized much more quickly than any other cannabinoid.
“We believe very high throughput, large scale [and] high quality is going to win the day here,” Przbyla says. “We’ll certainly have variations of that—we’ll have our pharmaceutical business and pharmaceutical APIs—but on a bulk basis, we want to be a large-scale commodity supplier and really take a leadership role there.”