From the time we started Phylos, we allied ourselves with the small farmers that started the cannabis industry. For many of them, legalization has been a tidal wave that threatens to take away their life's work.

We made it clear that we see the environmental and economic dangers facing the community. We made it a priority to support small farms. We told them we were on their side.

Then we announced that we were starting our own plant breeding program, and a video circulated of me telling investors that all the cannabis around today would be gone soon, replaced by optimized new varieties that Phylos would develop, and that the testing business was a foundation for breeding.

The cannabis community was shocked. It suddenly seemed as if we'd spent all this time building trust just so that we could turn around and threaten to wipe them out. Many of them have told us that they felt betrayed.

I am sorrier for this than I can say. The people who feel angry and hurt have been our partners, our customers, our community, and our friends, and nothing is more important to us than their trust.

I wish it had not taken so long to write this. As a company, we stopped, and we took stock of everything that we're doing. We looked long and hard at our past work and our future plans. We listened carefully to the community, and we thought hard about our mission. We are building a science company that is driven by its values. The promises we made to small farmers are real, and we intend to keep them.

And at the same time, everything I said in that investor presentation is true. It is a huge failure of communication on my part that these things seem so contradictory, and I have a lot of hard work to do now. This statement is broken into several different sections; I hope you’ll read all of it and give me a chance to explain. We have made some very real mistakes, but they’re not the ones that many people think.

How our business has evolved

We began as a testing business, but for the last several years we were also building the science and data tools necessary to drive advanced plant breeding -- for other people. We’ve published on our website and frequently spoken about how we are bringing genetic markers to cannabis and partnering with other companies to accelerate their plant breeding programs. We didn’t touch the plant, and we believed we didn’t need to.

We have worked with a lot of amazing farms to advance their breeding programs and bring new plants into production. We are continuing to do that. However, we were not able to develop genetic markers at the pace we hoped, and we recognized that the advances we needed to make could only happen in an in-house facility that was fully dedicated to research.

My messaging seemed to indicate that we were starting a program that would harm our customers and the community, but that couldn’t be further from the truth. We believe that advanced science can help cannabis reach its full potential as a plant that will transform medicine and agriculture and even society, and we knew that this was the way we could bring that science to bear. We want to be one positive contributor in a larger community pushing this forward. I am truly sorry that we did not do more to make sure that our customers understood this evolution as it was happening and the full picture of our intentions.

Our goals for the breeding program

Many people saw the presentation where I told investors that the cannabis around today would soon be replaced. Let me be clear that this was a discussion about the global cannabis market, which is driven by large cultivators of cannabis and hemp biomass meant for oil production.

Most projections show that the biomass market will soon make up 80% of the industry, and we see significant opportunity in developing plants for this market. In the biomass market, new varieties with better agronomic traits -- like improvements in yield -- will constantly replace older ones.

In the craft flower market there is opportunity for a thriving community of breeders in an industry catering to a demand for novelty, differing tastes, medicinal applications, local regions, and markets. No one company can dominate this market.

Protecting diversity in cannabis is core to our values. We make Galaxy data public because we believe that enlarging the public domain can help to preserve genetic diversity. Genetic diversity is tied to economic diversity because only small farms will have the diligence and care necessary to preserve heirloom genetics.

So, when we release clones into the broad flower market, we will distribute them under licenses that allow and encourage breeders to keep working with them, so that our work is a contribution to the overall evolution.

Further, when we develop markers in our breeding program, we’ll make that marker information available to our genotype customers when we find it in the data from their samples.

We are not using customer testing data to breed new plants

We tell investors that the testing business is a data collection tool that's given us a lead in our plant breeding work, and it's true. That's been interpreted to mean that we took data from our customers under false pretenses. That is one hundred percent not true.

Because the genotype test only looked at 2,000 out of 800 million sites in the genome and didn't include any data on plant traits, we were not able to use it to develop markers. However, we made the genotype data public, so that everyone (even our competitors) could use it, and we are now collaborating with other groups that believe they've found markers in that data by correlating it with other publicly available data. If we are able to validate those markers, we will let our customers know whether their samples contain them.

The testing business absolutely did enable us to develop some of the infrastructure for plant breeding: we hired an incredible team of scientists, built the necessary data pipeline and analysis tools, and did our own DNA sequencing projects that did not use Phylos Genotype test data. The Galaxy helped us indirectly because it allowed us to better understand the population structure of cannabis and intelligently target those sequencing projects. From all of that work we developed a high-density genotyping array that looks at 50,000 sites across the genome.

Who we are

In the video that many people have seen, I'm speaking to an audience of investors, in their language, about the large-scale global cannabis market. At one point I had slides in that same presentation about protecting diversity and small farmers, but over time I allowed the message to get pared down to only the information the audience cares about most. I’m not proud of that, but it’s true.

These events have made us face squarely the tensions that are inherent in being a company at the intersection of cannabis and science and agriculture. We should be translating between these worlds, and speaking in one voice all the time. We haven’t done a good job of that. This experience, which has been painful and humbling, has driven that point home.

We are focused on doing valuable work, helping our customers thrive, and building an amazing place to work. We realize that the work we are doing here at Phylos will make us an attractive acquisition target for established agriculture companies. But there are many other potential paths for this company, and we will not choose one that doesn't fit with our values.

In keeping with those, we’re developing tools, programs, and fair licensing structures that promote a sustainable and ethical evolution of the cannabis industry. By making this inherent to our business, we intend to drive long-term positive change that cannot be turned back if there is a change in ownership in the future.

Our commitment to the future

Our team at Phylos is here to change the world for the better, and we believe in the power of this amazing plant. We are also a company, and we need to do a better job of being straightforward about how we’re balancing our business goals with our higher aspirations. We can start right here with answers to some hard questions that we face as a science company in the cannabis industry. Every one of these answers represents a balance between forces that are in tension. They won’t please everyone. But this is who we are.

• We believe in diversity: in environmental, social, genetic, and economic diversity. We believe advanced plant breeding is necessary and valuable and, when balanced by programs to preserve the rich diversity we've inherited (for every crop, and for cannabis in particular), can contribute to that diversity rather than destroy it.

• We have to develop crops for the cultivation methods that are in use, but we understand the positive impact that sustainable and regenerative agriculture can have, both for farmers and for the environment, and we’re committed to fighting for that kind of cultivation, even (and especially) in large-scale agriculture.

• We believe in democratizing science by making data and scientific tools widely available whenever possible. As we’ve said above, we will share marker insights and release clonal cultivars into the flower market with the right to breed freely.  In order to do this, we’ll have to be committed to balancing the desire to be open with the need to protect our intellectual property.

• We don’t support broad utility patents that cover categories of plants, because they're a threat to both innovation and diversity.  At the same time, cannabis breeders, including us, need to have ways to protect what we’re making and find avenues to be compensated for our work. We believe in using appropriate intellectual property protections and in crediting and compensating breeders through royalties and licensing agreements.

• As the cannabis industry and the cannabis plant continue to evolve, we are determined to learn lessons from the history of agriculture. We want to bring the best plant breeding science to this community, which will include hiring people from mainstream agriculture. We also are committed to helping the cannabis industry avoid the mistakes that have been made in other crops, including stifling genetic diversity, marginalization of small growers, and consolidation of crop control into the hands of a few large corporations.

We know that many of you have known and trusted us for a long time, and you hold us to a high standard. We have appreciated that trust and confidence in the past, and we know that no letter, no public statement, is enough to repair this breach with many of you. But we're doing those things anyway to give some context to what we've done and what we're doing in the future. The only way to gain back trust is through the work that we do, through being a good partner, and through bringing this industry advanced science with a heart and a conscience. We'd like to know more about what you need, what you're concerned about, and what you'd like to see more of in a cannabis science company. We are here and listening. Please come talk with us.

Mowgli