In his work as a patent attorney and a plant scientist, Dale Hunt has worked with plenty of cannabis breeders over the years. Many, he says, are old-school breeders with tons of passion, who haven’t necessarily had the opportunity or interest to develop their own company.
“But they all know somebody who got ripped off by not having the right protection for their genetics,” Hunt says, “and they see they see people making a lot of money off genetics, but none of it is getting back to the breeder.”
This spurred Hunt to launch Breeder’s Best to help breeders protect their intellectual property and give them a platform to license their creations to commercial growers. Hunt believes the industry, as a whole, is “going to change the world with better cannabis in more places for more things” and Breeder’s Best will be a part of that movement.
“But we also want to change the lives of individual independent breeders and help them enjoy a nice revenue stream for all the decades of work they’ve put into this,” the CEO says. “This company was created to help as many independent breeders as we can, and that really is our mission.”
Marijuana Venture: How did the idea for Breeder’s Best come about?
Breeder’s Best CEO Dale Hunt.
Dale Hunt: The idea came to me of something analogous to a music label, where the artists are super creative people who make wonderful music, but they’re not particularly interested in parts like production, event planning or marketing. They just want to focus on what they do, and the record company or the music label takes that creative work and gets it out to the world and helps get recognition and revenues for the artist.
When it’s done right, everybody wins. When it’s not done right, the musician makes some money, but they end up in some kind of a battle with the record company over the intellectual property rights or the freedom to do the next thing.
We like referring to this model because it helps people understand our role in this ecosystem. We definitely are in a position to create intellectual property, to protect the breeders’ work, but we will never own that intellectual property. That’s something the breeder owns.
MV: How does the licensing deal work between Breeder’s Best and the breeder?
DH: The breeder owns the rights, and we will be the breeder’s exclusive licensee. We help find the right commercial connections so that people will pay royalties for that license, and then we share those royalties with the breeder.
Part of our agreement with every breeder will be a guaranteed annual minimum royalty that we will work into the agreement. If we don’t hit that, we lose our exclusivity. And if we come way short of it, we lose the license entirely.
But as long as we’re delivering on our promises, then we get to keep the exclusivity. And that would mean everybody wins and we’re doing a good job with the IP that we’ve been entrusted with. This whole model is based on having breeders want to work with us, so it’s essential that we do right by these breeders.
MV: Your background is quite a bit different than the average intellectual property lawyer. Can you talk about your background and how your education and career experience have set you up for this type of endeavor?
DH: I got a bachelor’s degree in botany a long time ago and then a master’s degree in genetics, studying photosynthesis in a population of high-desert wheat grasses. Then I got my Ph.D. at UC San Diego in molecular and cellular biology, studying protein accumulation and developing seeds. By then, I knew for sure I didn’t want to be a professor, so I went to law school at Berkeley and now I’ve been a full-time patent attorney since 1986.
As an attorney, I’ve obtained protection for plant varieties in over 30 countries, and we’ve done licensing deals in nearly that many countries. Along the many years of doing that, I certainly learned what you’ve got to do to get the right kind of IP protection, what goes into a good deal, how to recognize a bad deal and how to properly create the right incentives to keep people honest and keep them paying their royalties. I’ve been in the cannabis industry about seven years, but I’m quite confident that there aren’t a lot of people who have been around that many blocks that many times.
MV: Is one of the big challenges you face right now dealing with the patchwork regulatory system within the United States, in which every state and even other countries all have vastly different rules and regulations?
DH: Definitely. We’re committed to getting great cannabis into the hands of nurseries and growers and users and manufacturers. But we also obviously need to do it in a way that is legally sound and isn’t going to create any troubles for anybody. That’s a dynamic process.
And even though I’m a plant scientist and a lawyer, I can’t express my gratitude for the strength of our team because we’ve got people that know all these different aspects of the industry and we have a tremendous regulatory adviser who helps us sort those things out.
I’m also fortunate that I have Ethan Russo as the medical director and Rob Clarke as the director of botany and genetics and an incredible team of people who bring so much sophistication and so much experience to what we’re doing.
MV: In your experience with the fruit and flower industries, have you found anything that draws a parallel to cannabis?
DH: I’m not aware of any plant that can do everything cannabis can do, when you think about its potential as a medicine or as a source of recreation or as a source of, say, fiber or building material or a component of bioplastics. I’m not aware of anything that’s comparable.
The fact that it has so many different, highly valuable, highly beneficial uses, in addition to the fact that it’s interesting and kind of complex from a horticultural standpoint, creates all kinds of interesting legal issues.
MV: When you look at a website like Leafly or visit any modern dispensary, you’ll find hundreds if not thousands of supposedly distinct strains. Is there something to all these strains being unique or are they more similar than they are different?
DH: Cannabis is fun to breed and learn about and it’s also fun to name. What other plant has so many interesting variety names, right? But most commercial cannabis comes from a relatively limited number of ancestors that were available to people when free flow of the plant was much more limited.
I recently wrote an article about something called the “Founder Effect” titled “Biodiversity in Commercial Cannabis: Why It Matters.”
The example I use to explain the Founder Effect is to think about Gilligan’s Island. There were seven people stranded on Gilligan’s Island. Let’s suppose that the island was huge and that they never got off the island and nobody else ever came. A zillion generations later, there are millions of people on the island, but they all came from these seven ancestors. No matter how many people you’d have on that island, they’d all have exactly the same genetics as the seven people that got on that boat for the three-hour tour. That’s the Founder Effect.
The point is that a large number of individuals, or even a large number of families for what you could call strains or chemotypes, doesn’t always indicate a large amount of genetic diversity.
MV: Have you heard any concerns from cannabis growers about where things are headed with the future of intellectual property and the ownership of genetics?
DH: There’s a very legitimate concern about the big foot of Big Ag coming and stepping on your throat. Big AG is going to have a certain place in the industry, but because of the diversity of the plant, there’s room for other people to do well in the industry, too.
Patents are a tool that Big AG uses against smaller farmers, so if you know that Big Ag has patents, let’s make sure you don’t bring a knife to a gunfight. Let’s make sure you are as equipped as they are to protect what you’ve created.
MV: Is there a possibility that a grower may unknowingly infringe on a patent, especially with regards to genetics?
DH: That happens, but many of those patents are probably not even valid because they’re too broad and they cover things that were not new at the time. Some of those patents do slip through the process, and they are rightly disliked and feared and opposed.
When a patent examiner is looking at a claim, their job is to try to find the closest thing in the published academic literature or in the published patent literature. And if they can’t find it, they don’t have a good basis for rejecting the claim.
When you look at cannabis, at least in the past 100 years or so, people were going out of their way not to publish what they were doing, so there’s a big disconnect between what a patent examiner can find to use as a basis for a patent rejection and what’s actually new.
When people get overbroad patents, those can be challenged. And if somebody comes at this industry with an overbroad patent, it’s going to hurt a lot of people, but people seem ready to line up and provide their own proof that it’s not new, even if the examiners thought it was because it didn’t show up in the published literature.
If anybody’s willing to spend a lot of money on that kind of a patent and then spend money on litigation, they’re going to face, I think, a small army of people that are prepared to do what they can to get the patent invalidated.
The broadest patents are usually subject to attack, especially in this industry where there’s all kinds of prior activity that never made its way into a publication.
The normal presumption that a patent is valid is going to have a cloud over it for a generation in the cannabis industry.
The presumption that a granted patent is valid comes from this idea that the patent office did its job and really checked to see if the claims were new or not. In this case, it’s not even the patent office’s fault. They just don’t have the tools because they rely on published literature.
MV: You’ve made the analogy between Breeder’s Best and a record label, but it seems like the variety of music is infinite compared to cannabis. New artists don’t necessarily water down the entire field of music because there are so many different instruments and styles of music and people’s preferences are always changing. At a certain point, do you think the cannabis industry could become watered down with genetics?
DH: I think that we are really, really far from any kind of saturation point like that. If you think about just the many, many varieties that you find in a dispensary, even if they all have pretty similar ancestry, there’s still all kinds of demand for new and different and interesting.
I can’t say that we will never hit a saturation point, but the creativity of breeders is just breathtaking. With all of the ways that cannabis can be used and all the different places that it can be grown, I believe that there’s a lot of activity ahead of us and a lot of great stories to be told about individual breeders’ successes between where we are now and where this expanding world market gets to the point that it’s saturated.
This interview has been edited for length and clarity.