“If there is something that is so beneficial and has so much potential, and you want to get it to the largest number of people, we believe you have to you have to move beyond the plant. And so what we are focused on really is helping enable that growth phase into CPG and pharma.”
— Roy Lipski
Biosynthetic compounds — including cannabinoids — present the ‘last great domestication’ says Roy Lipski, CEO of Creo. His company is at the forefront of bringing lab-produced cannabinoids to market, at scale. Cosmetics and creams will be among the first products to take advantage of this technology and we can look for these products on store shelves in the not-too-distant future. Tune in to hear how:
- Microorganisms can produce bio-identical compounds, without the waste that comes with plant-produced cannabinoids.
- A lab can produce a year’s crop worth of cannabinoids in 48 hours.
- We can now produce ‘rare’ cannabinoids like CBG, quickly and at scale.
- Creo is working with consumer packaged goods providers to integrate cannabinoids into products we use every day — like cosmetics and skincare creams — and we can expect to see them in stores by 2022.
Transcript of Podcast with Roy Lipski, CEO of Creo
Copyright Kannaboom © 2021
Hey, it's Tom. Welcome back to the podcast. We all know that cannabis is a plant you can grow in your backyard. It's familiar, unlike the pharmaceuticals we are always being pitched. And that's one of the appealing things about cannabis as a medicine. But what if you could produce cannabinoids like CBD in the lab, at scale, without all the biomass, the stems and seeds that you don't need — as Cheech and Chong might say? This is the promise of biosynthesis and it's coming to fruition right now. By 2022, we'll see products containing bio synthetic cannabinoids on store shelves, says Roy Lipski CEO of Creo. Roy is our guest for this episode. And he lays out all the market-changing, indeed life-changing advantages of being able to produce bio-identical cannabinoids at scale, which Creo is already doing. We explore the great potential of biosynthesis in this episode. Cannabis is booming, and Kannaboom is on it. Welcome to the Kannaboom podcast where we interview experts on the changing story of humans, health and hemp. From San Diego, here's your host, Tom Stacey. It's Tom. Welcome back to the Kannaboom podcast. Very excited to have Roy Lipski CEO of Creo here today. Hey, Roy, how are you?
Roy Lipski 1:04
Hey, doing well. Thank you. How are you?
Really good. I'm excited to have you on, we've been covering non scientific topics. We're gonna delve into some science today. And Creo has pioneered a new trail with bio synthetics, what can you tell us about the mission and history of your company and where you are today?
Roy Lipski 1:21
Sure, glad to. As you pointed out, I'm a scientist by education and I studied chemistry. But I never really worked at the bench, so to speak, worked, what really has inspired me and driven me is the mission of taking good science and making it into a business bringing into the real world. There is so much science, it's being done out there, in academia in national research labs that could really benefit mankind, but never sees the light of day and never sees the light of day because the skill sets required to take an idea to take an invention out of the laboratory and make it a real world product are very different to the skill set required to invent it in the first place. And so it's really kind of connecting these two. So how did Creo come about? In about 2015, I became really fascinated with this area of science called biosynthesis, which is in a nutshell, using microorganisms to ferment products that we need, typically complex organic molecules that are difficult to produce using conventional synthetic chemistry. Nature is good at making natural molecules, no surprise there. But this field has really moved in leaps and bounds and and where it stands today. I honestly believe this is part of the solution to a lot of the problems the planet is facing today. I call this the last great domestication. You know, we domesticated plants, we domesticated animals, we're now domesticating micro organisms in a way that will allow us to continue feeding the world's population, continuing our progress and our lifestyle in a way that doesn't harm the planet. So this is from a high picture. This is the century of biology. Last century was the century of physics. We're now in the century of biology. So coming back down to us, as I was becoming really fascinated by this new area of science also came across the cannabis industry. This was back in 2015. And you know, initially, to be honest, I was pretty skeptical. I thought, Oh, yeah, all this medical cannabis stuff. It's just an excuse for people to get high, right. But then I actually started delving, I started going to conferences, and I realized, you know, here are people with genuine personal stories about how this plant has helped them, from curing a rash to dealing with persistent pain, all these different ailments. And then one day, you know, I had this kind of stroke of inspiration. You know, what we're really interested in from a medical beneficial point of view wellness point of view in the cannabis plant. What makes cannabis unique are these cannabinoids, it's a group of compounds that a few of them are found in other plants, but generally speaking, they are unique to the cannabis plant. And so a lot of the benefits that we are getting from cannabis can be attributed to these compounds. So is there a better way to access these compounds and that's when I kind of hit on the bi-synthesis approach, and I'll come back into what I think the benefits are. But just continuing the story, I then teamed up with Professor Ramon Gonzales at Rice University who's a world expert at bioengineering. We formed a small company together in 2016, and started developing this technology. And we've been steadily developing it since then. Later on, I formed a partnership with a very well known biotechnology firm called Genomatica to kind of take that academic research to the next stage. And now, five years later, we're about to go live. We've just done our commercial demonstration run as a commercial manufacturer. And this summer, we expect to have our first commercial batches. That's kind of the story. Now, what are we about? We're about enabling these compounds, cannabinoids, to reach every household. We want to enable every person on the planet to have the benefit and access to these compounds. The issue that we think is holding it back is essentially to reach the masses. You've got to go through the mass consumer product companies and through mass consumer products. And as we stand today, Johnson and Johnson Procter and Gamble, Unilever, Nestle, all these companies are not putting cannabinoids in their products. So if you're really going to bring this to the masses, you're really going to bring it to every household, you've got to answer that question of why is it that big CPG has not embraced cannabinoids. And there are basically two categories of reasons why. One is the legal complexity. So you know, there is a lot of legal complexity around the cannabis plant, all over the world goes back to the UN Convention on [inaudible] in the 1970s. The other which is also very important, is the supply chain. So if you're going to use an ingredient in your products, day in, day out, in mass market applications, you need certain things from your ingredients supply, you need consistency, purity, stability, of price, you need to scale security of supply, all these things that we take for granted from all kinds of other ingredients from sugar to salt to whatever, doesn't exist today for the cannabis and cannabinoid plants. And so if you can solve those two problems, the legal complexity and the supply chain issues, you now unlock the ability to take these compounds to every household. And that's really what we're about.
One phrase you mentioned there — last great domestication. I love that construct. We all know, with animals and plants, we've domesticated those to the benefit of mankind. And we know, why not with microbes.
Roy Lipski 8:11
Right. And, you know, what I'm talking about here is a process of fermentation. And in a way, we've been using fermentation to make a lot of the things we love, from cheese to bread to wine. But those are only really the tip of the iceberg. I think fermentation and biosynthesis, kind of hit the big time back a few decades ago, when Eli Lilly started producing human insulin. So if you're diabetic, fortunately, quite a path to inject yourself with insulin. Historically, that insulin needs to be extracted — brace yourself — from pancreas of pigs, right. And not only is that kind of gross, but it wasn't identical to human insulin. So a lot of people had reactions to this compound. So the holy grail is can we make human insulin. But hey, you know, you can't really extract it from dead humans. So what do we do? And what they did was they basically engineered with the knowledge of biology, a microbe, e coli in this case, to do what it does in its normal life, eating sugar and doing stuff but secreting human insulin, and then they could extract that and purify it and produce it, bring it through to the masses. So this ability now to harness microorganisms to produce complex organic compounds, is exploding. You know, when you drink like [inaudible], water, flavored water drink, and he says, you know, natural lemon flavor on it. This hasn't come from lemons, you'd have to grow so many lemons to extract all of this. It's by synthesis, and I think increasingly, a lot of the organic compounds that that we consume and interact with will be produced in this way. And so let's look at why what are the advantages. So, you know, if I'm, if I'm eating a salad, then it makes sense to grow lettuce. Because I'm eating, I'm consuming the whole plant. But if I'm looking to consume cannabinoids, then in a sense, all the rest of the plant that I'm growing and throwing away is just wastage. You know, at best, you got 20%, CBD in hemp, so 80% of what the plant exists for, or what the plant produces energy to is just wasted. Whereas with the fermentation process, much more of the input goes into your final product, it is much more efficient. And by the same process, environmentally beneficial process, because then end up using less water, less land, less fertilizers and all those kinds of things. In a way we've all heard about Beyond Meat. That's what they do. Their key ingredient is called heme. It's essentially what gives meat the meaty flavor, it's what's found in blood. But they don't grow animals and extract it from their blood, they that would be wasteful, they ferment it. So that's one of the key benefits, the other key benefits, and this kind of ties in with the whole supply chain issues, etc. So environmentally, it's much more efficient. But also some of the issues that exist when you're growing something agriculturally, but then only extracting a small component out of it is that there's always risk of contamination because you're having to concentrate you know, 100 kilograms of plant material, you have to concentrate to 20 kilograms or cannabinoid, you're also concentrating all the contaminants. And so biosynthesis fermentation allows you to produce these compounds free of contamination, because you know exactly what goes in, in a way that's very scalable. Just to give you an idea, you know, a harvest of outdoor hemp, you get one harvest a year, maybe, maybe two, if you're in the right kind of geography. With the fermentation process, it's a 48-hour process. So you can scale and you can make as much of this stuff as you need. And you don't have the risks of you know, seasonality bad crop, bad weather, which is another really important point because, look, let's face it, global warming is really global climate change, it really means much more extreme weather, more hot, more cold, we saw what happened in Texas recently. And that is not very good for agriculture. So you know, the risk of crop failure, the occurrence of price volatility that comes with this, oh, there was a bad season this year. All of these things are eliminated. Basically, when you go down the biosynthetic route, price stability, security supply, you can make in big quantities. You know, if you're going to make a mass market product, you're going to plan for success and say okay, with this works, and I need 100 tonnes per annum with this product, can I be shown that I get it, and that's where, again, the plant approach can't give that kind of security. And then I think, possibly just to finish off most excitingly is, you know, we're only touching the particular iceberg here with CBD and THC E to cannabinoids, but there are over 100 of these known in nature. And the problem is we haven't been able to access all of these other ones because they're very rare. They're like point 5% or less in the plot. Now with the biosynthetic route, where you're really controlling the biology of these microbes, you can target any one of these rare cannabinoids and so not only are we unleashing the potential of cannabinoids to reach every household, we're bringing into play a whole palette of these compounds. Whereas you know, today we've been looking at the world in black and white through THC and CBD. So that's kind of all of those benefits. And then finally, legal simplicity. So the way the law works is there are two things that are scheduled, THC, no matter how you make it, chemically synthesized or whatever. It's controlled because it's a psychoactive compound. Fair enough. But the kind of weird thing that's also come along with it, they can kind of lump the whole plant with it. So the entire plant is a controlled substance. And so because you're not making these cannabinoids and because they're not THC, they're not making for the plant that now not controlled substances. So you remove all that legal complexity that exists at the moment around the supply chain of command and noise.
Well, that's nice. The legal piece of it, I didn't anticipate that that you would be in the clear with synthetic THC. But I guess it makes sense. Given all you just said, there's so much logic to it. But we still know that there's opposition right there. And usually the course of things like this, there's denial and violent opposition, and then realization that it was inevitable. You know, there's non GMO types. There's that sort of opposition to this. What do you say to people who are stuck on that?
Roy Lipski 15:38
Yeah, so a few things. First point I would like to make is no, we should not use the word synthetic on this, because one of the kind of hallmark characteristics of biosynthesis, which is why Eli Lilly used it to make human insulin is because it's bio identical, you are using the same chemical steps, the same enzymes that happen do this in the plant, you're just doing them in a microbe. So the compound you get is identical, indistinguishable from what you get from nature, which is not the case when using normal chemical synthesis. That's why the word synthetic has come to mean something bad, because it's never bio identical, it's not necessarily the same product. And in the sense, that kind of highest profile case of this was thalidomide. Thalidomide was a compound that had lots of beneficial effects. But it occurred in a mirror in two mirror images of the same compound. One of them had good effects, one of them had terrible effects, nature usually only makes one. And so when you're making something naturally, you can target the mirror image molecule that you want, when you make it synthetically, usually make a mixture of both. And that was a problem as silly as the mind that's a problem with synthetics in general, they're not bio identical, they're not the right in mirror image, necessarily, of what nature makes. So bio synthesis is not that but let's step back. So resistance. Look, when we first started on this journey, we felt that our main sort of selling point would be that we're providing access to these rare cannabinoids that are simply not available commercially at scale at a good price from natural sources. And that, you know, the fact that we make it using fermentation would be a drawback that, you know, people put up with to get access to these rare cannabinoids. That hasn't turned out to be the case, we are finding that customers are embracing the biosynthetic route, they see it as an advantage for all the reasons that we spoke about the legal complexity, simplicity of it, or the fact that you can get a reliable quality product consistently at a predictable price. So we're not, we're not seeing that from our customer base. That admittedly is not the end consumer. Now, you know, I think the whole end consumer relationship with GMOs, if indeed, that's what you want to classify this as, and technically, it's not classified as a GMO, because your final product is not the organism, your final product contains no DNA in it. So it's one thing when you got genetically modified corn, and you're consuming that genetically modified material. But fermentation is a different process. You may have a genetically modified microbe, you may not. There are a lot of them that use natural occurring ones. But the end product is free of the microbe and so it's not technically considered a GMO. But putting that technicality aside, what we are seeing is that there's a real generational divide, hear that increasingly, the younger people are very accepting of biological technologies. Yeah. Biological technologies. So GMO, actually, is increasingly being seen as a good thing, a good thing because of the environmental benefits that it can bring us because of the potential that it has for you know, helping us in the future with the challenges that we're facing. So you know, I have this favorite sticker that I got at a conference a few years back and it's like, I GMO. And you know, I keep it here on my desk just as a reminder that actually, you know, I think I think the whole public opinion inevitably is going to change that around this.
What we're talking about are brand new products at more affordable prices. Part of what the opportunity for you guys has been prohibition for 100 years almost. There wasn't much scientific research into this. And now there is. Now we know we have an endocannabinoid system. We have all these cultivars, and all these different cannabinoids, you might be able to actually make new combinations that don't even exist yet. Is that far fetched?
Roy Lipski 20:40
Well, yes and no. So biosynthesis fermentation allows you to produce rare cannabinoids. It also allows you to produce CBD. And the benefits of doing that that we spoke earlier about allows you to produce cannabinoids. And the rare ones that because they're so rare in the plant, they haven't really been exploited. Products haven't been made using them. And so by bringing these rare cannabinoids to market, people can now create products that contain them, or contain them in a much more concentrated amount, then you can naturally find implant extracts. The other thing that you can do, and this is also potentially very interesting is create modifications of them, you know, maybe an old age group here or double bonds here. And now you created cannabinoids that don't naturally occur in nature. But that may have much more enhanced health benefits than their natural ones, because they might bind to the receptors slightly differently. Now, this is the business of pharmaceutical companies, they can't patent naturally occurring compounds. And so there's no incentive for them to invest the millions and hundreds of millions required to take a compound and turn it into a drug. But if you now have a unique molecule that can be patented, because it's not naturally occurring. Now you've got the incentive to really bring it all the way through to being in drugs. So in a way, by allowing these slight modifications, you're bringing onboard the whole farmer industry to then take cannabinoids and bring the benefit of them to consumers in the form of FDA registered drugs.
So you mentioned patents there. So say for instance, you develop CBN, a bioidentical CBN that can help people sleep and then you patent that...
Roy Lipski 22:49
We can't patent it. If it's a naturally occurring compound, you can't patent that naturally occurring compound.
Right? What if you made a slight adjustment to it? You could say this is something different, and we own it.
Roy Lipski 23:03
Yes. And it's not something that's not what we would do. That's what the pharma company would do. Because that's really the beginning of their business journey is some patent protection, now we would use bio synthesis to figure out how to produce that compound cost effectively.
You distinguish yourself from a pharmaceutical company — is this the evolution of medicine, you're not a pharmaceutical company, and you're a research branch that has a partnership with a with a manufacturing branch.
Roy Lipski 23:38
Good point. Step back from this. Our mission is to help bring the benefits of cannabinoids to every household. To do that, we have to unleash the consumer packaged goods market to bring us you know, toothpaste and mouthwash and all the various things that can happen or it could be great at but also you want to help unleash the pharmaceutical channel as well that will bring us you know, properly tested and vetted pain medicines, you know, cures for psoriasis, all the various things that can add that you could potentially do. In order to do that we need to solve the supply chain challenges for CPG. And we need to solve the 'How can I make cost effectively a brand new variant of the cannabinoid?' That's what the pharma industry needs to do. But when our experts figure out which this variant is required, we're not a pharma company. We're just a take were just a technology company that has this manufacturing technology that unleashes both and so the model with the consumer packaged goods companies is we will supply them with ingredients we will be an ingredient supplier, and we work with a manufacturing partner to actually manufacture these cannabinoids. And with a pharma company, we would work with them to adapt the biosynthetic process to make the particular unique cannabinoid that they are interested in.
As narrow as that niche sounds, it's still enormous, I would think.
Roy Lipski 25:19
Which one, the pharma or the CBD?
Well, bringing kind of designer cannabinoids to the public is world-changing, right? I mean, but that's a whole new class of organic medicines that can really benefit people's lives.
Roy Lipski 25:37
And you know what I mean, this is, this is the history of Western medicine, you start off with a naturally occurring compounds, that has a beneficial effect, like an extract from the willow bark, which is called aspirin, you then figure that you can't grow enough willow trees and cut them down to extract all the stuff. So you find a better way to get that compound. And then stage three is you realize, well, you know, if I make this slight change to this slight [inaudible], it's actually much better. Either it has better effects, or it has fewer side effects, etc. That's where I kind of understand the history of modern medicine, and cannabinoids have not been able to go down that path yet. And that's what we're hopefully going to be enabling.
You're probably coming to market this summer, you said. How big do you think this is? And do you have a vision for 5 — 10 years down the road?
Roy Lipski 26:37
Yeah, I mean, look, it's always difficult and dangerous to be a prophet, especially with something that is emerging. And you know, if you get it right, everyone says it was obvious. If you get it wrong, then then you know, you're no good. So it's a lose / lose thing. This being but this prophets / prophecy business, but I would refer to the very good initiation report that was produced on the market by Raymond James, back in the fall of last year, and they forecasted that, you know, the world market for biosynthesized cannabinoids, which spans both CPG and pharma, would reach about $110 billion by 2040. So potentially a very significant market.
Right now are you guys focused on any particular cannabinoids kind of out of the gate?
Roy Lipski 27:34
Yes, so you know, we started looking and started working with the mother cannabinoid CBG and CBGA. This is the cannabinoid that is made first in the plant, from which all the other cannabinoids are derived. Usually in the plant, none of it is left, very little bit of leftover because most of it is then, you know, converted to CBD or THC. But the mother of cannabinoids CBG. And actually, technically speaking, it's produced in its acid form. CBGA is kind of the, we believe the next really untapped molecule, we like to call it the skin cannabinoid. Because it has so many interesting benefits particularly for the skin. So a lot of cannabinoids actually dried the skin, which is not a bad thing if you're trying to cure acne. But for most people, in terms of beauty, dry skin conditions, you know, anti wrinkles, all that kind of stuff, you want to do the opposite. You want to moisturize the skin. CBG stands out from all the other cannabinoids, the only known cannabinoid that actually stimulates the body's natural production of our moisturizer. Our natural moisturizer is called sebum. That's what we produce naturally to moisturize the skin. CBG actually stimulates, according to some primary research that's out there, the production of this component. So it does some very interesting things. It's also got benefits in terms of anti inflammation. So for a lot of different skin situations CBG is really quite unique. And it's got a number of other quite interesting benefits too. But you know, if we're going to kind of get you a sound bite I would say think of CBG as the skin cannabinoid. Now the other thing I would say is called extraction usually means that it's quite difficult to obtain the native acid for so when you have the plant material all the cannabinoids actually in acid form and THC is not THC, it's THCA, CBG is CBGA, etcetera. When you go through the extraction process, quite often you degrade those acid forms into the non acid form. And so again, It's quite hard to obtain the acid forms from plant extraction. With biosynthesis, we don't have that problem. So actually, we're going to be offering both CBGA and CBG. And the two have slightly different effects, the acid forms don't behave necessarily like the non acid forms. And in fact, some people with pharmaceutical backgrounds believe that the acid form is actually much more active from a pharmacological point of view from a health benefit point of view than the non acid forms. And so our first compounds will be CBGA and CBG. And then we're going to be working our way from that point onwards.
All these compounds have different properties. And the doctors I pay to pay attention to in the space are just so excited about the galloping research happening. There's so many things that are coming to the fore about the different cannabinoids but the acid precursor aspect of this means you could also offer a THC that's not been decarbolyzed. So there wouldn't be psychoactivity. Is that correct?
Roy Lipski 31:03
That is correct. Yes. So THCA is the acid form. That's why you know, if you're producing hash brownies, you're going to heat the plant material to turn it into THC for it to be active. But they're not, the acid form is not so psychoactive and is believed to have some positive effects as well. So yes, biosynthesis would allow you to produce, you know, the acid form of THC as well.
So if people were excited about medicinal cannabis, but didn't want to incur the psycho activity, or didn't want their children to or whatever, in theory, you could deliver a product that delivers all the medicinal benefits without that psycho activity.
Roy Lipski 31:44
Yes. And actually, you know, stepping back from this, THC is pretty much the only cannabinoid that has significant psychoactivity. You know, THCV can be psychoactive, but you gotta take it in vast quantities, same as CBN. So really, most of the THC is the exception. Most of the cannabinoids out there do not have psychoactivity and can bring the health benefits without that psychoactivity.
You guys are focused on the cannabis plant. But the implications of this probably go beyond cannabis. Are there other other plants that could be synthesized this way?
Roy Lipski 32:24
Yeah. So you know, we only part of a much bigger revolution is taking place. That's part of a bigger movement, which is the sort of century of biology so there are many other companies working on these kinds of things, working with different plants, there's a great company out of Japan that have figured out how to biosynthesize silk protein. So silk is naturally produced by silkworms, it's a very laborious and no and environmentally not very efficient process. They figured how to biosynthesize silk proteins, and now they can bring silk protein to all kinds of applications from, you know, making hard materials that can be used to produce skateboards to clothing, etc, etc. So lots of companies out there are working on this, bringing forwards the benefits of natural compounds, but unleashing them from the natural way that from the way in which they are naturally produced. And I guess that's a good way of thinking about it, where I'm locking the potential of natural compounds, by moving them from a difficult and environmentally when efficient production platform into one that is much more environmentally efficient and scalable. And this is totally different to what's happened in the last 200 years, which is all about creating synthetic chemicals, compounds and chemicals that don't naturally occur in nature. And guess what, 200 years later, we're discovering these things are not so good for our body. Well, here we have the opportunity, and it is what's going to be happening is actually shifting everything to naturally occurring compounds. But with the benefits that we can actually, you know, use that scale in society.
Like margarine was never butter, but it was sold as something as good as, but it wasn't.
Roy Lipski 34:20
Right, with a chemically synthesized version of butter.
From a consumer perspective, when you are able to, at scale, provide that massive shortcut to the end product. What does that mean for the consumer in terms of what they're paying and what they can expect in the product?
Roy Lipski 34:38
Yeah, so I think what it means is, you can trust your product better. You can be confident that it's safe, free of contamination, that it contains what it says it contains, and that's one of the big problems of the planet. attraction is that the variability, sometimes I've got this level of CBD, sometimes I've got this level of CBD. So again, getting what, what, what it says on the packet is really important. So creating that trust there. The other element is, you know, getting access to all these rare cannabinoids at prices that are, you know, accessible to people. So, you know, back to my analogy of black and white versus color, you know, think of it as you know, where we're moving from black and white TV to color TV now, people are going to be able to have formulations that are much more targeted and much more effective by balancing the ratios of all these rare cannabinoids together and to CBD, etc, you're going to be able to produce products that are much more effective and much more targeted, and maybe even, you know, personalized medicine targeted to particular individuals.
Will it be an order of magnitude cheaper? Or where does it fall on the cost scale?
Roy Lipski 36:09
Well, you know, I don't want to fixate on costs too much. But, you know, what biosynthesis allows you to do is to produce these rare cannabinoids, you know, just as cheaply as you can produce CBD each day.
And again, the consumer, like you said, doesn't have to worry about pesticide residue, heavy metals, any of that stuff, because it's been precisely produced at this percentage, and they can have a cold environment.
Roy Lipski 36:37
Yeah, so it's not only the contaminants, it's also the potency when it says, 'Oh, you know, this product contains 100 milligrams of CBD,' it really does contain 100 milligrams of CBD because you know, how much you put into it? Yeah, I think that that is, you know, one of the key benefits but you know, if we look at another, you mentioned it, I think this is also very good point, because you're then now moving outside of the whole kind of control substances, marijuana complexity that exists, you can sidestep, a lot of the taxes are imposed on cannabis products. And frankly, when we talk about price when you go and buy something in a dispensary, most of what you're paying, or a lot of what you're paying is tax in one way or another tax because there's the actual tax on a tax because the producers can't reclaim their expenses. And so their cost of production is much higher because of the tax anomaly. So both ways the consumer pays for it. Now remove all of that the price for the consumer should fall quite quite substantially.
Yeah, it's 35 to 50% I mean in California now, so that's a relief. Do you, I know you don't have a crystal ball and you don't like to prophesy anything but when should consumers begin to look for these products on the shelves?
Roy Lipski 37:56
So CBG is already making its way onto the shelves and I hope with our production coming on mid mid year, you know probably 2020 to start people should really start seeing these on the shelves. You know, remember we're not an end-consumer company so we're not going to be producing finished products, our customers will be buying ingredients for us and creating products and so you know the cycle of our product development, etc. But you know, I think that come 2022 consumers should start being able to see this and actually start being able to, you know, actively have a choice to buy synthetic compounds as opposed to hemp or marijuana derived.
Should we look for Creo inside like Intel Inside?
Roy Lipski 38:49
That's a branding question. Technically, we haven't decided that yet. It would be nice. I think it's more of a question for our mark, Head of Marketing Shuji, but maybe.
Are these going to be in drugstores or dispensaries or that depends on the state? I guess.
Roy Lipski 39:07
So actually, I mean, if you're really going to unlock the potential here, they should be in any kind of shop, there would not be a limit, there would be dispensaries. I think the first applications will be, you know, in skin as I mentioned earlier for CBG. So, you know, creams, balms, things of that nature. And you know, wherever you buy those kinds of products, so those kinds of shops should have products with CBD in them.
Maybe cosmetics might be an early place to begin.
Roy Lipski 39:46
Yeah, yeah, I think cosmetics, beauty, those kinds of things, creams, and maybe applications to help with sort of eczema, psoriasis, skin, inflammation type of situations.
So I have a standard question I ask my interview subjects, do you have a favorite cannabis product or service?
Roy Lipski 40:08
Yeah, I've been thinking about this. I think for me, what I'm very excited about are kind of two dimensions. One is delivery formats. Not everyone wants to smoke. So I think there's, there's lots of interesting technology taking place in improving delivery formats. I particularly like nasal spray, nasal sprays, because you're getting the very fast input into the body like you do with smoking, but without, without the complexity and health risks around combusting materials and inhaling them. So that's one and the other is I really, like, you know, the kind of granularity that's beginning to emerge in terms of, you know, ratios of particular cannabinoids within products. So you know, this is a one-to-one-to-two CBG, CBC CBD product, those kinds of that kind of direction that we're going to, which is, I think, kind of the path to the future of creating much more effective and targeted products, people.
Yeah, really discreet targeted products. Do you know of nasal inhaler products that have cannabinoids that are out there yet?
Roy Lipski 41:29
I think there are, but I can't name any for you right now. I'm sorry. It's not really my domain there. But yeah, I think I think that's that's kind of I'm sure I saw advertised one just the other day. Oh, actually, it was it was uh, it was it was designed like an asthma inhaler. That's what was, yeah, Israeli company. So those kinds of products, I think are very, very interesting. And, but, you know, as I say, I think I think the big revolution is when CPG are able to take this and really push it down their channels to market so that, you know, you see it in supermarkets and drugstores and you know, 7/11s, and all that kind of stuff,
Right, Well, and again, you're sort of providing the raw materials. So these chemists in these consumer product goods companies are going to make all kinds of things that maybe there's eyedrops...
Roy Lipski 42:32
That's an interesting one. That's actually another one, you know, some interesting research there. CBG actually helps with glaucoma by coming as a condition where you have built up a pressure in the eyeball, not very pleasant. It actually helps relieve that pressure.
Right. I think people are smoking cannabis to help alleviate that. But if you could apply it directly with an eye drop, that'd be great.
Roy Lipski 42:57
Well, within cannabis, it seems that it's CBG CBG cannabinoid, it's doing that.
Okay, Roy, is there anything we haven't covered that we should?
Roy Lipski 43:07
You know, we've got all over the place here. I can't think of anything right now. But thank you for asking. I think it's been, you know, a real pleasure. Thanks for your patience. I've kind of pulled us in all kinds of different directions. But, you know, I guess I would just make this point that, you know, we're not here to replace the cannabis plant. There always is, and always will be a market and benefits for, you know, the natural, original form of cannabinoids. That's not going to go away. But we also are practical about this, which is if there is something that is so beneficial as so much potential, and you want to get it to the largest number of people, we believe you have to move beyond the plant. And so what we are focused on really is helping enable that growth phase into CPG and pharma. It's not going to replace what's happening right now. But, you know, from the point of view, the most benefit to the most amount of people. You know, we think that that approach that approaches is required to supplement what's happening right now.
Sure. And consumers will always have the choice if they prefer a flower and everything that comes with that they have that choice, and maybe that becomes more of a boutique item while there's a pile full of cannabinoid products in the drugstore.
Roy Lipski 44:39
Yeah, I mean, I think I would, I would I would put the analogies slightly differently. I think it becomes more of a connoisseur's market. You know, the kind of richness of flavors and effects you can get from the plant. You're not going to get from singly produced compounds. So like a good bottle of wine, you want that. But that's not the only thing we will want from cannabinoids, we also want them in toothpaste and mouthwash. And you know what, we don't actually want to be brushing our teeth every day with something that has the richness and complexity of flavors of the cannabis plant. So it's, it's, it's for what we're using it for that will be you know, will gravitate to whatever is the right solution for it.
Yeah, more functional. That makes sense, more targeted and functional.
Roy Lipski 45:35
Thank you, Roy. It's been really interesting. And I think we'd love to check back with you in a year or so and see where you're at. The potential here is enormous. And we all know people who want the medicinal benefits but don't always want to have the experience of the plant. And here's a way to sidestep that.
Roy Lipski 45:53
Right. And now just say, you know, come visit us online: CreoIngredients.com. Or you can find out more about CBG. And its benefits and what we're doing.
Are you guys on Twitter or anywhere like that, or?
Unknown Speaker 46:07
Yeah, I think we're everywhere. Twitter, LinkedIn, Facebook, Creo Ingredients, or just Creo should find us.
Great. We'll get some of that into the show notes. Thank you for sharing your experience and expertise. I know the listeners are gonna love this episode.
Roy Lipski 46:23
You've been listening to the Kannaboom podcast with host Tom Stacey. If you liked the show and want to know more, please check us out at Kannaboom with a k.com. And please leave us a review at Apple podcasts or wherever you listen. See you next week.
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