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Utility Patents on Marijuana? Who is BioTech Institute LLC?

Someone is Trying to Corner the Marijuana Market by Putting Utility Patents on Strains

Utility patents placed on an agricultural product, like cannabis strains, can put a 20-year vice grip on the product where the owner can control advertising and sales of the product. BioTech Institute LLC has been placing utility patents on all different strains of cannabis for years apparently. A journalist recently put all of her investigative journalism skills to work in an attempt to find out who owned BioTech Institute LLC. She found the names Shawn Sedaghat and Gary Hiller, without any definitive proof that they were the ones behind the patents specifically.

Legal marijuana is a massive business and is likely to only get a lot bigger. There is something different about the cannabis industry in that it is fresh, amateur, not as locked-up as other industries. Business industry veterans know how to take advantage of just such opportunities. The lack of research on cannabis though means that the business people work in ignorance. Some geneticists suggest that there are a lot less strains of cannabis than the market would like people to believe. If that is true then what happens to all of the intellectual property surrounding a marijuana strain that turns out to be the exact same thing as another strain, or 20 other strains?

Some very powerful people are trying to corner the market on legal weed and turn their company into the Monsanto of marijuana. Who are they? And can they be stopped?

The search for the hidden forces that might soon control the marijuana industry began, as many wild journeys do, in Las Vegas. It was last November, and I was party-hopping at the biggest weed-business gathering of the year, a week of overlapping conferences and decadent soirees. I was a few blocks off the Strip, celebrating a new line of bongs and pipes in a penthouse with chandeliers and dark-wood furniture, when I happened to meet a faunlike 40-something man named after a character from The Jungle Book: Mowgli Holmes.

Holmes had something he needed to get off his chest—a quagmire that had been keeping him up at night for the better part of a year. He was soft-spoken but had an earnest intensity that made me lean in to hear him. Little did I know that he was about to set me off on a months-long quest that would involve an obscure company potentially worth hundreds of millions of dollars, the most prominent cannabis scientists in the world, and the former talk-show host Montel Williams—all to uncover an audacious plot with profound implications for one of the country’s biggest agricultural products.

Turns out he had a Ph.D. from Columbia and ran a lab in Portland, Oregon, where he’d been mapping the genetics of every marijuana strain he could get his hands on. He pointed to the cluster of strains that taste like tangerine, and then the ones that provide a calming high with none of the mind-racing anxiety so many casual users despise. There were the famous strains, like Sour Diesel and Blue Dream, as well as little-known varieties bred as folk medicine by underground botanists. But this database—a cornucopia of cannabis DNA—had captured a very specific moment in time, a moment Holmes believed would be over soon. The age of artisanal marijuana might have already peaked, and the era of corporate pot was just beginning.

According to Holmes, a secretive company called BioTech Institute LLC had begun registering patents on the cannabis plant. Three have already been granted, and several more are in the pipeline, both in the U.S. and internationally. And these are not narrow patents on individual strains like Sour Diesel. These are utility patents, the strongest intellectual-property protection available for crops. Utility patents are so strict that almost everyone who comes in contact with the plant could be hit with a licensing fee: growers and shops, of course, but also anyone looking to breed new varieties or conduct research. Even after someone pays a royalty, they can’t use the seeds produced by the plants they grow. They can only buy more patented seeds.

“Utility patents are big. Scary,” Holmes said. “All of cannabis could be locked up. They could sue people for growing in their own backyards.”

Pot is an industry worth over $40 billion, which makes it the second-most-valuable crop in the U.S. after corn. And even though weed is still federally forbidden, it sounded like whoever was behind BioTech Institute had spent the past several years surreptitiously maneuvering to grab every marijuana farmer, vendor, and scientist in the country by the balls, so that once the drug became legal, all they’d have to do to collect payment is squeeze.

“The craziest part is no one knows who’s behind this or when they plan to enforce what they have,” Holmes said. He’d heard that BioTech Institute was owned by a mysterious billionaire with an unclear agenda.

Even worse, he believed, the patents might affect our ability to unlock the therapeutic potential of cannabis. With all other crops, from soybeans to carrots, the introduction of utility patents has created obstacles that threaten to reduce genetic diversity. Right now, the word “cannabis” is similar to the word “dog”—covering everything from Chihuahuas to huskies. Each plant contains its own mix of compounds. Some strains suppress your appetite, and others give you the munchies. Some get you high, and some don’t. Many seem to have incredible healing properties. Research in mice has shown that the compounds we’re most familiar with can do everything from increase bone density to shrink tumors, but we’ve hardly scratched the surface on the less common compounds.

I staggered down the hall and ran into a trusted source who does serious medical work. When I asked her about BioTech Institute, she gasped and forwarded me a memo that had been circulating among the most influential people in marijuana for two months. This formal explanation of BioTech Institute’s entirely legal annexation of weed’s intellectual property had been written by another pot geneticist, Reggie Gaudino. He estimated that together, all of the company’s desired patents would be worth hundreds of millions of dollars and could eventually affect every marijuana strain currently being bred. Every. Single. Strain.

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Brian Wroblewski

Brian Wroblewski has a passion for writing, travel, food and family. Since working in and around the cannabis industry since 2008, Brian brings a unique perspective to the cannabis journalism space. With a focus on emerging brands, moving the cannabis industry forward and an undeniable passion for truth in business and journalism, find some of Brian's posts across the web on digital marketing, cannabis and a variety of different topics.

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