Ep 368 – Are Terpenes-Infused Products the Next Big Thing? Expert Says Yes…

kevin koby abstrax

As new studies shed light on the benefits of these powerful plant compounds, terpenes could become the biggest thing in wellness since CBD. Here to tell us more is Kevin Koby, co-founder and Chief Science Officer of Abstrax Tech.

Learn more at https://abstraxtech.com 

Key Takeaways:

[1:03] Kevin’s background in chemistry and how he came to start Abstrax

[1:55] An inside look at Abstrax Tech, the leading innovator in terpene sensorial experience

[2:44] A breakdown of terpenes and how this segment has evolved over the last couple of years

[4:44] How terpenes enhance the flavor and effects of cannabis through the entourage effect

[6:51] Abstrax’s Type 7 licensed lab testing versus standard cannabis testing

[10:50] Exciting takeaways from Abstrax’s “Man vs. Machine” experiment with Max Montrose

[14:02] How Abstrax’s terpene research is taking cannabis to new heights

[17:07] Abstrax’s terpene infusion products and the biggest trends Kevin sees among wholesale clients

[20:32] Where Kevin sees the terpene market heading over the next 3-5 years

Click Here to Read Full Transcript

Matthew Kind: Hi, I'm Matthew Kind. Every Monday look for a fresh new episode where I'll take you behind the scenes and interview the insiders that are shaping the rapidly evolving cannabis industry. Learn more at cannainsider.com, that's cannainsider.com. Now here's your program.

Sinead Green: Today's guest is the leading innovator in the fascinating new field of terpene sensorial experience. I'm pleased to welcome Kevin Koby of Abstrax Tech to the show. Kevin, thank you so much for joining me today.

Kevin Koby: Oh, thank you.

Sinead: I'm such a big fan of Abstrax, really looking forward to getting into the nitty-gritty here in a second. Kevin real quick, can you give us a sense of geography, where are you joining us from today?

Kevin: Yes, I'm actually at our Type 7 lab in Long Beach, California.

Sinead: Awesome. Okay. I definitely want to talk to you about the lab because I know it's quite an involved operation there. Really looking forward to hearing about that. First off Kevin, before we jump into Abstrax, can you tell me a little bit about your background and what you were doing before Abstrax?

Kevin: Yes, absolutely. I actually, I'm formally trained as a chemist and I got to do synthetic chemistry in two different research labs at my college at UCSB and learned a bit about synthesis, which has a bunch of different components of chemistry in there. Then after that, I went to work at Gros, I worked at analytical lab for some time and then I went straight into manufacturing for a while. Then I built and managed pretty much all the lab and manufacturing for prelarge [unintelligible [00:01:43] at the time in the medical market. Once the law came through, we started Abstrax. Once it became recreationally legal is when we started Abstrax.

Sinead: Okay. Very cool. Okay. Jumping into Abstrax, what is the company on a high level? Can you give us an overview of the company?

Kevin: Yes, I would say to best characterize this, we would be the premier cannabis flavor house. We're focused on designing the experiences of all cannabis products and to make that happen, we're just focused on the signs of cannabis and cannabis terpenes. That is the gateway to cannabis experience in our minds. Yes. We have multiple facilities to actually research the cannabis experience. We partner with growpartners. We have our own extraction facility here in Long Beach. We do R&D here, like analytical R&D, and then we also have a separate research building and a manufacturing building as well.

Sinead: Awesome. Okay. Pardon me, to my listeners, if I start geeking out too much, but I've always been very fascinated by terpene. Kevin, can you give us for our listeners that maybe aren't familiar or maybe need a refresher on terpenes. Can you tell us what terpenes are and why they're important, why this segment has evolved so quickly over the last couple of years?

Kevin: Yes. Terpenes, I guess on the most basic level, they're a class of organic compounds and that's how you describe it in chemistry, but in our industry, we've a colloquial-- We'll just use this as a word to describe all the aroma and the flavor of cannabis. That's what this word has evolved into in our industry. There's a lot of things in there besides Terpenes that give flavor and aroma, but that's we call it in this industry. It's just all the flavor [unintelligible [00:03:41] terpenes.

In the past, I would say like the '80s and '90s, all the breeders were breeding for high THC content in cannabis. Then as the industry grew, they sought after like more unique characteristics and there's all these flavors in cannabis, but all of those are very recent. Those didn't used to exist really, or at least if they did exist, you wouldn't know about them because they're just all over the place.

In the 2000s and on, they really bred for this really unique cannabis, like sensory profiles where things smell like grapes or berries or creaminess and that's what we would all call the terpene profile. That's what gives it that smell and taste. That got even more popular as soon as the dawn of extracts and vapes really came to the scene during the medical market and going to the reg market, that's when we started seeing a whole lot of traction around terpenes and interesting terpenes.

Sinead: Okay. Very interesting. Most of our listeners they might have heard of terpenes multiple times at this point, but they're probably a little bit more familiar with cannabinoids. I feel like just speaking of THC, for instance, that is the component that packs the punch and maybe dictates the amount of high terpenes. Would that dictate more the type of high? Is that how it works?

Kevin: Yes, one way we like to say it is THC and CB are like your gas pedals and the terpenes are like your steering wheel. That's one analogy we use. I think another one is just understanding the entourage effect. If you have a super high THC profile with no terpenes because it was super hot or it wasn't cured right, it'll get you so high with all the THC, but if you get a lower THC flowered with a lot more terpenes that will definitely have a better effect than the previous sample. We would call that the entourage effect. An entourage effect is some of the parts is greater than any of the individually combined. That's something that is super interesting to us. That's something that's really the key between cannabinoids and terpenes and how they interact in your body.

Sinead: Got it. Okay. Yes. Terpenes, they don't only contribute to the experience like the flavor and aroma, but they also contribute to the health side, like your energy levels, your focus, your calmness, is that right?

Kevin: Exactly, exactly. Right.

Sinead: Okay. That makes total sense. Jumping into Abstrax, this company is really the pioneer when it comes to terpene sensorial experience and just all the research and development you guys have done over at Abstrax is just really fascinating. Lots of big things that I want to jump into here. First off, can you tell us what differentiates Abstrax testing from just your standard cannabis testing?

Kevin: Yes. I'm glad you asked that question. I think it's not particularly fair to compare the two, I know the cannabis testing labs, their business model is the EQC based on a state guideline. They have to have certain requirements for their instrumentation, but they have great instrumentation, the regs are very high, so they have to have very good instrumentation. They're searching for predetermined anywhere from 22 to 44 terpenes and they can detect down to, for terpenes case, parts-per-million, they don't need to go any than that.

For the sake of argument, pesticides and things like that, sometimes they're testing down to parts-per-billion and they're going for strictly QC. When we're going and we're analyzing profiles, we are more on a exploratory mission, and so we're detecting down to parts-per-quadrillion. If there are any math nerds out there, parts-per-billion, 10 to the -9, quadrillion 10 to the -15, we're getting the numbers that small in powers.

Then we also detect-- We can qualify and quantify any compound in there and we can separate all of them. In any given cannabis sample, we're not detecting for 22 or 44 terpenes through, quite literally detecting 400 and more in each sample because that's how much are in there. Then we're able to qualify what they are and then quantify how much there is. All those little parts in there, they don't seem that important, but a lot of the character of each strain is those small characteristics.

Sinead: Right. Yes. That's really fascinating. Just the precision you guys are offering cannabis is just mind-blowing. Kevin, you mentioned, you're currently sitting outside Abstrax Type 7 licensed lab. Tell us a little bit about what you do there in terms of extracting and replicating and what exactly makes a Type 7 licensed lab? What qualifies you as that lab?

Kevin: Yes. When the regulation went through California and they started allowing cannabis, you had to go through this new licensing process whereas before it was a lot different. Long Beach was the only place that offered open enrollment. We filed for open enrollment and the regulations in Long beach are extremely high compared to other jurisdictions, so we figured if we could make it here, we could make it anywhere.

It took us a while to get this building up and running, but we finally did it and now this building that we constructed it, it was meant to be a very versatile Type 7 lab where we are extracting cannabis, making cannabis products, but also honing in on the methodology and also honing in the different flavors and aromas and how to be the all-encompassing research facilities. It's like we want to understand everything about cannabis. We want to touch it however we want, go eat all the [unintelligible [00:10:04], California is the best place for it and see what it's all about.

You can't really do that with a testing lab license or any other type of license. You need to have the versatility of using whatever you want, any [unintelligible [00:10:17] person, for instance. We constructed this lab, we put all of our analytical instrumentation in it, and we're doing hydrocarbon extraction day in, day out. We're doing analytics on extracts, flowers, inputs, everything. This is where any papers we're writing about cannabis are usually coming out of the work we're doing here. We also like to leverage the work we're doing here and see if we can help out universities that can't otherwise touch cannabis and try to do collaborative studies that way as well.

Sinead: Okay. Very, very cool. Kevin, we actually had Max Montrose on the show a few weeks ago. We've had him on multiple times, but very recently you did the man versus machine experiment. Can you tell us a little bit about that and your partnership with Max?

Kevin: Yes, that was a really fun whole project that we did together. Max Montrose, I mean, guy's a legend for everyone that knows him, but he's developing and interpreting which is almost like the new [unintelligible [00:11:21] program for any cannabis enthusiast who's getting to know cannabis. I think it's different to what I think cannabis, personally speaking, it has a lot more dimensions, a lot more variability, and a lot of different profiles. That it can produce genetically as well as like from soils and everything else that you can use with it, but Max Montrose developed this program where he can more or less predict how a flower is going to make you feel depending on how you do a sensory analysis of it. Smell it, see how it makes you feel on your face or in your olfactory.

There's a specific way he does that and he teaches that. We want to put it to a test. We have this very sophisticated analytical technology, we built an algorithm based on peer review journals, giving weighted scores to what individual terpenes would have an effect on someone. Every time we do an analysis, we put through this program, we would call it terpenelytics and it spits out the highest likelihood of how this is going to make you feel. Max Montrose is doing something very similar. Had him fly out, we gathered eight different samples, we did our terpenelytics on it to see what the scores would be, how it made you feel, what the terpene profile and everything, and then we had Max in a room and a bunch of people just go through and smell each one and try to give us the same data.

To his credit, he got seven out of eight right which was pretty actually astonishing for any scientist sitting in the room would be like, "Holy shit." The only one he didn't get right was one, I wouldn't even say he didn't get it right, it's just that he didn't really give an analysis on it because he said, "I've never seen this before." It was a totally new type of flower.

It was nice to surprise him with that as well as essentially validate two different methods as well. That was a really great project. Since then, our relationship has only grown.

Sinead: That's great. Man, what a guy. The fact that he could pinpoint that many, that's crazy. Any of our listeners that are really interested in terpenes definitely go check out that interview with Max that we had a few weeks ago because he's definitely the terpene king I think. That's probably a good name for him, but that's amazing. Tell us about the different ways your research is taking cannabis to new heights and you guys are across the board on all the different sectors you touch. Consumer education, product development, medical research, just so many things that you guys really have a hand in. Tell us a little bit about that and where you would hope to see Abstrax really taking cannabis over the next few years.

Kevin: At any given time we have at least 20 R&D projects that are in process so it's a lot of R&D projects. It's the most that I know about in the industry, I don't know what everyone else is doing. I think something that we do, that's a bit different than everyone else, is that we're trying to lift up and bring as much collective knowledge to the industry as we can as a company.

A lot of the way that we do that is just collaborating with universities. There's a lot of really great universities out there. We've one of the best in the world here in the US and a lot of them are very eager to study cannabis, and they're trying to figure out how to do that most effectively, where can they make impacts. Because this is a plant that has a research prohibition on it, which is extremely rare and now we're almost allowed to touch it.

There's still laws around it being Schedule 1, once it gets to Schedule 2, then universities will be a bit more free to experiment with it. We have several different collaborations going on like at UMN, we're doing a genetics research project to see what type of terpene trait or terpene [unintelligible [00:15:51] like genetic traits are heritable or not. That's one thing we're doing. At Western Washington University, like I was saying earlier, the entourage effect is extremely important to not only the cannabis plant, but cannabis community as well, and to the people, all the cannabis enthusiasts. We're trying to work on measuring the entourage effect over there and we've had some good results so far. At UC Riverside, we're studying how vaping smoking cannabis can affect lung tissue and things like that. These are all very controlled studies, our R&D takes a long time. It's good to plant these seeds now and see where they grow.

Sinead: That's great.

Kevin: Oh, yes but it keeps us [unintelligible [00:16:41] engaged too, right?

Sinead: Absolutely. Cannabis, there are just so many just question marks I feel like with particularly, like you said, to measure the entourage effect. That's just around the corner. Thanks to you guys, that's going to be massive. Lots of great things ahead.

Kevin: Thank you.

Sinead: The research and development side of Abstrax is really just one component at this point. You guys also you have wholesale products, you've got your own in-house products. Tell us a little bit about that and maybe we'll start with your own in-house products. I know you guys just recently came out with a new Cloudburst Series. Can you tell us a little bit about that?

Kevin: When we originally started, we were recreating a lot of our favorite cannabis profiles, which were in high demand at that point in the industry, and then we ventured off to making cannabis profiles that are accentuating the trade that we and our customers really loved about certain products like the [unintelligible [00:17:50], we want to accentuate that, bring that character out. I feel like we've been progressing so far that now we're at the Cloudburst Series and the Cloudburst Series is our same spirit. We're building a flavor on top of the terpene backbone but now it's just all forward flavors.

We've wrapped back around to almost the traditional flavor house, but all of our flavors are all built on top of the terpene backbone that will have the entourage effect when it's used with cannabinoids. I think we're really excited about that. We've gotten a lot of really great feedback, not only from cannabis consumers and manufacturers and big brands like that, but also just from the beverage industry or the alcohol industry, people that want to take inspiration from cannabis and apply it to just your average consumer packaged goods.

Sinead: Very cool. What would you say have been the biggest requests and what trends have you been seeing among your clients?

Kevin: There's probably a couple of different trends there that you're talking about. Locally, it's really like local communities like different flavors, and so I think that could embody this. Embodying of this is like when you go to the movie theaters and you see the icing machine. In every community and zip code, they're usually different just because those are the best flavors for that community. If you go to Hawaii, it's like pog and then if you go to California, it's cherry, but then if you go to Michigan, they have grape or something like that.

We service 32 countries and all 50 states and everyone has a very different palette for certain things. Grapes in Michigan is different than grapes in California, but not only like a different palette or things, they're different preference of the flavors that they want. Then once they figure out the type of flavors and the type of experience that they want, then it comes down to product application. We have a lot of people making edibles, making gummies, making beverages, [unintelligible [00:20:07]people are using these for vapes. There's a large variety of uses that they use these for. Now we're making sensory kits, we're also making analytical standards and our product portfolio is growing at least every week.

Sinead: Wow. Okay. Yes, I'm curious, you guys you're really leading the charge when it comes to the terpenes market. Where do you see the market heading over the next three to five years?

Kevin: Yes. I try to think of the terpene market as a piece of the flavor and fragrance industry, and we're still separated in the cannabis industry while it's not federally illegal. If you're looking in the flavor and fragrance industry, the terpene category is definitely growing than all the other parts in that industry and that industry is growing as well so I'm projecting growth.

Sinead: Yes, absolutely. With Abstrax, I know a few things are under wraps, but what do you guys have on tap for the next couple of years? Any big projects coming up listeners should know about?

Kevin: We have new stuff coming out all the time. One thing we just released this month is a new nude enhancement terpene formulations. To make those, we have the terpenelytics program which is doing all the peer reviewed journals, but then we wanted to take it a step further. We went to a few dispensaries. We had the flower that they're selling to their customers. We have the customers fill out surveys based on the product that they're getting, knowing that we have the terpene profiles for the products that they're getting. Then we collected a ton of data, something like a daily data points or something like that.

We had to write this code, which ended up being like the artificial intelligence code to try and predict the surveys from the terpenes that consumers were experiencing and what isolates would predict what mood state these consumers were having. This code gave us these theoretical formulations. We went ahead and made those formulations. We had some flavors input, of course, we don't want to make that flavor that no one wants to try.

We had adjusted them with our flavors and then we went ahead and we wanted to confirm those results or go back to the drawing board. We held a more organized sensory panel with random participants, with Dr. Avery Gilbert, who's actually this top-tier flavor and fragrance guy. He's in charge of all these sensory panels and everything, so the guy knows how to do it.

We had this organized sensory panel and what happened was that we essentially confirmed that these theoretical formulations you made are actually in part of these mood states that these consumers and these participants have. Now we have that as a total formulation to put under something like a Cloudburst Series so that we can target mood states as well as flavor profiles. I think that's mainly what our customers are coming for. We have a ton of stuff coming out all the time.

Sinead: Yes. That's maybe too broad of a question because there's so many projects and lots of big things ahead. Really excited to see what you guys do but Kevin, before we wrap up here, I love to end the show with a few non-cannabis related questions just to give the listeners a feel for you and the man behind the curtain. First off Kevin, are there any books that have had a big impact on your life or way of thinking you could share with us?

Kevin: Yes. Thanks for asking that. My dad gave me a book recently called Principles by Ray Dalio. He's the world's largest hedge fund manager, I believe. He wrote a pretty good book about, pretty much any instance in life, pretty much can have a protocol for smooth sailing essentially. I'd recommend that book.

Sinead: Oh, that's great. Okay. Yes, that sounds really interesting.

Kevin: I'm going through that right now so that's top of my head.

Sinead: Cool. Very cool. That sounds really fascinating. All right, so next question. I never want to ask what's your favorite band? That's such an impossible question to answer, but what is your favorite music at the moment, or maybe your favorite band that you're going to a lot lately?

Kevin: Yes, I was jamming to Mick Jenkins before we started this call.

Sinead: Oh, nice. Okay, I'm not familiar with them. What kind of music genre is that?

Kevin: It's rap. You should definitely look it up. He's definitely a cannabis enthusiast.

Sinead: Okay. I'll have to look him up. Awesome. Wrapping up here, Kevin, you really have your finger on the pulse with the terpene side of the cannabis industry, but what would you say is one thing going on in the industry right now that might have a big impact over the next few years, but you think it's flying under the radar right now?

Kevin: I think we all got our eyes on federal legalization and how that's going to pan out or what steps that's going to take to happen and who's going to prepare and how. We're all going to prepare if we like to or not, but how are we preparing? That's the biggest thing that I'm looking at every company in the industry with. How are they preparing for federal legalization and how are they going to get affected by that, right? Hopefully, it's not going to be like a shakedown, but we want to prepare for the worst and hope for the best.

Sinead: Absolutely. Yes. That's, as you said, a good rule of thumb for the industry at large so that's a good little piece of advice there too for our listeners. Thank you for that Kevin. Kevin, thank you so much for coming on the show. This has been such a fascinating interview and just really looking forward to seeing what you guys do over the next few years. Thanks again and best of luck to you and Abstrax.

Kevin: Yes, thanks for the opportunity and letting me come on.


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