Photo Gracie Malley for Cannabis Now

With Phylos Bioscience’s recent announcement that they are launching an in-house breeding program, many growers who provided their genetics to Phylos to be a part of their Galaxy strain database and mapping project are up in arms. The company’s CEO released a statement saying the company has no intentions of competing with breeders, but an uncovered video shows him pitching investors on how Phylos’s strains will dominate the cannabis market in the years to come.

On April 16, the Oregon-based cannabis testing company Phylos Bioscience made a shattering announcement: Phylos will be launching an in-house cannabis plant breeding program this spring.

The announcement of Phylos’s breeding program made waves throughout the industry, as many cannabis cultivators took to the industry’s most popular social media network — Instagram — to voice their concerns about whether Phylos was going to use community-submitted cannabis data to inform their own breeding project.

In the days since Phylos has clarified that the company will not be growing strains they obtained through their cannabis testing work and their CEO Mowgli Holmes has promised that Phylos is “not going to compete with breeders.”

However, a video of Holmes speaking at the Benzinga Cannabis Capital Conference in February reveals a different plan: He says Phylos will be breeding the “next generation of plants” for the coming age of large-scale commercial cannabis agriculture — using all of the genomic data the company has gathered from cannabis cultivators since 2014.

Where Phylos Got Its Cannabis Data

After launching in 2014 from their headquarters in Portland, Phylos made their name in the industry through the “Cannabis Evolution Project,” their plan to map cannabis DNA on what they called the Phylos Galaxy. The company issued an open call for cannabis cultivators to send in their old and unique cannabis genetics, portraying the project as a sort of community effort to trace the history of the cannabis genome.

“People keep calling us and showing up with old packets of seeds and crazy stories,” Holmes told Cannabis Now in 2015. “We can’t know what they really have until we sequence it. We keep hearing rumors — so and so lives way out in the Mendocino hills, he’s been growing this and that for 30 years without stopping, never hybridized it. And so we’ll send people out to track it down or try to get word to them. It’s not easy. People are a little nervous about this kind of thing, of course.”

But Phylos assured growers that the company would not claim ownership over their genetics, and that, in fact, having testing records of genetics could help breeders establish their own intellectual property protections over a certain strain.

The company currently sells a phenotype test that they advertise on their website as a product that will help cannabis cultivators “defend your intellectual property,” “build a trusted brand” by being listed on the Galaxy and “support open data.”

And there’s the rub: Plenty of cannabis cultivators feel like it wasn’t clear from the beginning that Phylos would eventually use their data set to create proprietary strains.

Holmes has released a statement on Phylos’s Instagram defending the company’s program. We reached out to Phylos for comment, but after multiple attempts and a reschedule request, we accepted we were unable to get a statement.

Why Growers Are Angry

One person who sent multiple samples to Phylos — including one strain that turned out to be one of the rarest in its Galaxy — told Cannabis Now that they might not have sent in samples if it had been clear Phylos would eventually be doing their own breeding program.

“Clearly, that was not what was presented to any of us at the time,” the breeder, who requested anonymity, told Cannabis Now. “It was marketed in a way that had you think other people were going to steal your genetics, and this was a way to put it out there that this was your genetics.“

Also, the breeder said there certainly were benefits to seeing the strains in the Galaxy. On one of his strains, he was able to get a clear picture of other people growing it locally.

“But the idea was this was going to help protect us,” he said.

This breeder falls into the first of the two main groups of folks expressing anger on Phylos’s Instagram page. This first group includes those who thought this was a community science project to uncover the cannabis genome and are surprised to see something else develop.

But the second group includes those who saw this coming from a few thousand miles away. There is a reason the most elite cannabis strains that cultivators possess are commonly referred to as “the family jewels” — they are precious secrets. While some will claim Phylos using their data set to breed new strains is no big deal, these breeders think that’s a joke. They believe the genetic markers Phylos has acquired since 2014 will not only allow them to recreate the best strains they got their hands on over the years, but provide a genetic map to making those strains better.

Phylos CEO Responds to the Accusations

Amidst the controversy online, Holmes posted a statement on Instagram that attempted to clarify some of the details about Phylos’s new breeding program.

“It’s been suggested that we’re claiming ownership over plant samples that have been sent to us and leveraging our genetic database to compete against our customers,” Holmes wrote. “That would be really f*cked up. But it’s not true.”

Holmes says that Phylos is “not using the data about your plants to help us breed” and that “your plants don’t belong to us and we’re not going to steal them.”

“The genotype test data is not valuable to a breeding program because it’s not paired with phenotype data. You have to generate that kind of data from living plants, on a much bigger scale,” he continued. “The Galaxy is a database on our website that serves as proof that those plants belong to the people who submitted samples — and proof that they don’t belong to Phylos. We’ve made that information public elsewhere too so that everyone can see the data. We have no claim to any of those plants. And as for bringing dead plant samples back to life, it’s just not possible. And if it was, we wouldn’t do it, because they’re not our plants.”

Instead, Holmes argued that Phylos is going to embark on its own separate breeding projects that are “not going to compete with breeders.” However, he went on to list a variety of endeavors that Phylos would be undertaking that sound like they will be competitive in the market — though he added they will be making high-THC strains and flavored strains available under an open source license.

“We are going to tackle the hard problems like [powdery mildew] resistance and get stronger plants out to everyone,” he wrote. “We’ll also be breeding hemp for industrial uses like hempcrete, bioplastics and carbon sequestration. When we work on plants with high THC and crazy flavors we’re going to release them under open source licenses so everyone can keep breeding with them.”

He finished his statement with a powerful assertion that Phylos needed “a chance to build something different.”

The Next Generation of Plants

But despite Holmes’s statement that Phylos wouldn’t be competing with cannabis breeders, this February, he told a crowd at the Benzinga Cannabis Capital Conference that this was always the plan and that Phylos’s new cannabis strains would soon be the top of the line.

“It’s like corn was 80 years ago, it’s just not a developed crop,” Holmes told the crowd of investors, in a video from Benzinga published on their YouTube page. [Editor’s Note: The video of Holmes’ speech at Benzinga has since been taken down from YouTube.] “And one thing it’s been hard for people to wrap their heads around is that the cannabis in this industry is going to be incredible, but compared to how it’s going to be in a few years, it actually kind of sucks right now.”

Holmes went on to say in a few years, all of the cannabis on today’s market would be replaced by optimized plants. He said those plants will be completely resistant to molds and mildew, while having their water consumption dialed in for whatever climate they will be grown in.

“We’re going to be the company who makes those [plants],” he said, “and I think this is why: So we have a really huge lead, we’ve been collecting data and IP for four years. We have really huge barriers to entry protecting us. I think the main ones are that it would be impossible for anyone else to collect this data set at this point… we are fully integrated in the cannabis industry, we have more trust in the cannabis industry than any other science company.”

In the speech, Holmes noted Phylos’s ability to use DNA sequencing to identify genetic trait markers. Since they are able to do this at the seedling stage, they can short circuit the breeding process. “We can select the ones we want when they’re tiny, force them into flower and move on to the next cycle. So we can breed faster than ever before,” he said.

“Having access to those plants won’t be optional if you’re a producer,” Holmes told the crowd. “Our company is developing this next generation of plants and it’s not going to take very long either.”

“It’s never really possible to do real plant breeding in your basement, and today, plant breeding depends on this whole set of technologies. All of them are driven by genomic data and Phylos has the biggest collection of genomic data on cannabis in the world,” Holmes said.

Nevertheless, much of the genetics that Phylos asked people for over the years were in fact bred in basements or smaller propagations due to people not wanting to end up in prison. There were some larger efforts in Canada, California and the Pacific Northwest, but generally, the stuff of recent folklore has come from smaller efforts, accidents and bag seed. So the question has to be asked: If you can’t really breed good weed in a basement, why did Phylos need to get their hands on all of those basement genetics to build their Galaxy?

While many had always thought of Phylos as a data company, Holmes essentially admitted in his Benzinga speech that the breeding program has always been the plan. The company was designed in such a way to make it a target for acquisition by Big Agriculture.

“In a couple years, this is going to be the third biggest ag crop in the country right behind corn and soy,” he said. “And none of the science has ever been applied to it. So we built our company to take all of that science that mainly exists inside commercial AG and bring it to this new crop.”

He believes the companies doing breeding programs at the genetic level will be a prime target to be scooped up early once the real corporate money arrives to speed things up in the cannabis industry. The bet is that the company’s team of scientists, the world’s largest collection of genomic cannabis data and the separate companies Phylos has created for the breeding program will have corporate America’s mouths watering.

Holmes said Phylos was in the middle of a $20 million raise that would fund the company through the release of its first set of strains.

TELL US, do you think the first big cannabis intellectual property war has begun?