EPISODE 82: ETHAN RUSSO, CEO AT CANNABISRESEARCH.ORG & NISHI WHITELEY, CHIEF OPERATING OFFICER AT CREDO

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Episode's transcript

Julio Martínez-Clark: (00:00)
Welcome to the LATAM MedTech Leaders podcast, a conversation with MedTech leaders who have succeeded or plan to succeed in Latin America. Today our guests are Ethan Russo and Nishi Whiteley. They are co-founders of CREDO Science, a company with a mission to commercialize patented products generated from their investigation of the cannabis plant and the endocannabinoid system, making cannabis safer and better. So, Ethan and Nishi, thank you for being on the show today. Welcome!

Ethan Russo: (00:59)
Buenos días a todos!

Nishi Whiteley: (01:01)
Thank you for having us.

Julio Martínez-Clark: (01:04)
All right guys. Uh, so let's get started. with your journey to Latin America, how is it that you got involved with the region? Let's start with Nisha first.

Nishi Whiteley: (01:14)
Oh, well, I've always been very interested in Latin America and wanted to learn a second language. So Spanish being, uh, a Texan is, uh, the number one language that I really wanted to learn. And then after graduate school, I had the opportunity to work, uh, in Houston and work closely with the Mexican Consulate and a lot of, uh, businesses from Mexico. And then from there, I've had the opportunity to work through the Texas Department of Agriculture, helping develop trade with, uh, Latin American companies. And then later in my consulting practice, had the opportunity to do quite a bit of work in Latin America. And then when Ethan and I were working together at a, um, research institute based in Europe, we had the opportunity to work with a lot of companies in Latin America in the cannabis space. So I've worked in that area in food, agriculture, green energy, heavy machinery, And now, um, in, uh, cannabis also, side note wrote, uh, a report, uh, for the petrochemical industry where I followed all of the petrochemical plants in Latin America. And so I wrote a weekly report about their output.

Julio Martínez-Clark: (02:40)
Great. You were quite an expert then. Probably, you know more about Latin America than me.

Nishi Whiteley: (02:46)
Oh, I doubt that.

Julio Martínez-Clark: (02:50)
All right, Ethan. So how was it you got involved with the region?

Ethan Russo: (02:54)
Well, first I have a personal, uh, story. my paternal ancestors were Spanish-speaking Jews in, uh, Northern. And my great-grandfather actually came to the States, uh, by way of Buenos and, um, my grandfather, his son-in-law, came to the United States by way of Chile. Uh, so there's that tie in there. Um, I've been very fortunate over the last 26 years to have visited, uh, Latin America numerous times related to research, either on medicinal plants, um, or cannabis in particular. I actually did my, uh, uh, sabbatical, uh, from my neurology practice in Peru, working with the Ma Inga tribe in the Amazon. I was in 1995. Um, and we've had numerous trips to Mexico, Columbia, Chile, Argentina, and Brazil, um, related, uh, to, uh, the work. Um, so we are well aware of the great opportunities in this area of commerce, cannabis in the under-cannabinoid system.

Julio Martínez-Clark: (04:07)
Fantastic. Ethan, thank you for that. And Nishi, thank you for that introduction about your personal and professional relationship to Latin America. And well, the, the idea of the podcast here is to portray, um, uh, or to, um, show examples of, uh, successful ventures into Latin America. So let's start the conversation with, um, your, uh, the trends that you see happening in the region. What economic, political, and social trends, et cetera, that you see that are relevant to the, um, to, to doing research or to commercializing medical innovations in Latin America? So, Nishi, you wanna start?

Nishi Whiteley: (04:52)
Well, you know, Latin America is a great place to grow cannabis. Um, there's a great environment altitude, uh, is just right in so many places. And, um, there's also great historical knowledge of the plant in Latin America. And, you know, I foresee that there, there's a, a real trend towards natural medicine. And so people are curious about what the plant can do for them, even though the laws, uh, aren't keeping up with public opinion, uh, which is certainly the same here in the United States. We also see that many Latin American companies are investing heavily in ensuring that they have excellent manufacturing facilities, many of which are trying to get EU GMP certification. And so, you know, we really foresee that Latin America has great promise as both, um, a grower and a manufacturer of high-quality cannabis products.

Julio Martínez-Clark: (05:59)
Very good. What about you, Ethan?

Ethan Russo: (06:01)
Well, just to go on from there, let's use the example of Colombia. Um, as Nishi alluded to cannabis actually produces a greater concentration of chemicals at higher elevations. So if we look at the and Dan region, um, we've got a combination of high elevation, uh, with very rich volcanic soil, um, and equitable climate, just the right temperature range, uh, abundant sunlight, and, uh, also abundant labor. This is the perfect recipe, uh, for cultivating cannabis. Um, when you couple that with, uh, talented, uh, talent pool, um, something I've learned, uh, in my career is they're bright and capable and resourceful people everywhere. And, uh, this is no less true in Latin America. Um, I'll give one example. Um, I attend a lot of conferences virtually or in person. Um, and I had the pleasure of, uh, listening to a presentation by a young chemist in Colombia on a topic about which I usually lecture. Uh, at the end of it, I thought, Gee, I really don't need, uh, to be here. Um, he did such a great job. Uh, so, you know, there are always, uh, good young people coming along, uh, to carry on the, the research.

Julio Martínez-Clark: (07:32)
Very good. I see a lot of Canadian companies doing business in, in Colombia, uh, related to cannabis. Any particular reason why?

Ethan Russo: (07:41)
Yeah, that's an easy one for a couple of reasons. One is the climate, of course. Uh, Canada is known as the great white North. There's snow cover a lot, a huge amount for heating and cooling in the summer as compared to, uh, in South America. You just pick your elevation and you have the climate that you need and then certainly economics run into it. Uh, labor is expensive in Canada. Uh, it's cheaper in, uh, Latin America. Um, hopefully, this doesn't lead to exploitation, but it certainly presents opportunities for companies that, uh, need to, uh, watch their margins.

Julio Martínez-Clark: (08:26)
Very good.

Nishi Whiteley: (08:27)
It's a significant difference in terms of cost production between Latin America and Canada.

Julio Martínez-Clark: (08:34)
Yeah, I'm sure. Yeah. Makes sense. Yeah. Uh, not so much with American companies. Well, I don't see, in the news that I read, I don't really see many American companies. Usually, it's more, more Canadian companies. At least that's my perception. Maybe wrong.

Ethan Russo: (08:49)
Well, it's absolutely right. Uh, you know, again, it's a situation where, uh, cannabis is essentially legal in Canada. There are well over 260 licensed producers of cannabis in Canada, currently in the US. Uh, the number has been one licensed producer for decades. That's slowly changing, but the companies that are, uh, applying for licenses from the drug enforcement administration are finding a very tough go of it. Um, and oversight that is so rigorous is to be punitive. Um, so the fact is the remain considerable roadblocks to research in this country, and it's a compelling reason why I've spent most of the last 26 years working for foreign companies outside the US.

Julio Martínez-Clark: (09:43)
Interesting. Ok. And also, I guess you have the issue of financing. Cause banks cannot, at least from what I understand, cannot lend money in the US to cannabis businesses, right?

Ethan Russo: (09:56)
Well, it's hard to even get a bank account. And then, it's only a cash business. Um, you know, it was a way of, uh, actually the policy is perpetuated crime. Uh, it's an everyday occurrence in the United States that even legal state dispensaries of cannabis are all-cash businesses. And, uh, they get robbed regularly at gunpoint. Um, so no, it's a terrible policy that needs to stop.

Nishi Whiteley: (10:36)
Cannabis businesses also cannot deduct their cost of goods sold from their, uh, taxes in the same way that other businesses can. And so there are a lot of barriers to cannabis e-commerce in the US that just make it really difficult. And those barriers don't exist in Canada. So Canadian companies have so much more freedom to operate.

Julio Martínez-Clark: (11:04)
I see. Now everything makes sense, thank you for the education. I'm not an expert in cannabis. Actually, you are the second guest that I have here, on the podcast can you speak intelligently about this topic?

Nishi Whiteley: (11:19)
Well, it's immensely frustrating cause the opportunity here to innovate in the area of human health, medicine, animal health and wellness, and industrial solutions, um, really is extraordinary. And current laws around the globe greatly interfere with a tremendous amount of economic, progress and innovation.

Ethan Russo: (11:48)
Sure. Even when things are relatively well, there's still in a legal state, it is still the case, particularly in California, that regulation is strangling the industry. There are just countless, uh, cultivators, uh, that are, have gone out of business or going out of business because they just can't manage the tax structure or the other regulations. so, you know, it, it's unfortunate in this country that there have been these, uh, this straight jacket on cannabis commerce. And again we are interested in advancing this for the sake of human health and what the plant can provide. And so you know, I consider myself an earthling first. we're going to go where, uh, the opportunities live, where we can do the work and that's just a fact of life.

Julio Martínez-Clark: (12:47)
Okay. So are you aware of any legal developments in Latin America that in different countries that are, that is making cannabis more popular, or they're bringing these countries to the surface for the industry?

Ethan Russo: (13:05)
Yeah, there are a couple of factors. One is, uh, the courts have often ruled, uh, that, uh, use of cannabis as a constitutional right in various countries and, again, there are many people interested in developing this area of commerce. New crops are always welcome to people in the agriculture field. Uh, so the opportunities are, are great and that's certainly becoming noticed. it's not to say that there aren't barriers in a given country, but, um, often they're less formidable than they might be in the US.

Julio Martínez-Clark: (13:48)
Yeah. the good thing about all this is that it doesn't look like the business can, can, or the business of cannabis can be independent of Latin America in many ways, It looks like Latin America is an integral part of the cannabis industry for the reasons we just mentioned, specifically Colombia, and I understand just being legal developments in the country for the past 10 years, I've been seeing how, how the laws have changed to make it more favorable to grow medic cannabis and, and to export the flour and all that. So it looks like the country Yeah, go ahead.

Ethan Russo: (14:34)
You know, right now, um, it's important that people understand, uh, that cannabis is not just, uh, a method of making THC or CBD, Teri, Cannabinol and cannabidiol. Those are only two of at least 150 related chemicals called cannabinoids that the cannabis plant makes. Beyond that, uh, they're terpenoids the aromatic components. There are 200 of those. Many of those also have medicinal properties. So the fact is that the potential of this plant medicinally and also in industry, uh, other applications like, uh, insecticides from a plant, is limitless. so we know a great deal about cannabis, but we've only scratched the surface in terms of what it can provide. Another factor is, um, cannabis becomes accustomed to where it's growing and it will express different traits. This is a very resourceful plant. It adapts to the environment, um, and to deal with the bugs that are there, the growing conditions that are there. When a cannabis plant has been cultivated in an era for a long time, it's what's called a landrace. Um, and often there are genetic traits that are extremely beneficial this would be the case in Colombia or Mexico, where, um, cannabis has been cultivated for a long time. Um, these can contribute to our knowledge of the beneficial properties of the plant and especially for breeding new types of cannabis. They're a great genetic resource. We're also involved with a company called Breeder's Best, which is designed to support independent cannabis breeders. So if someone has a plant with unique traits, it's possible to get intellectual property protection for it. Part of that program is the novel cannabinoid discovery program. Um, there is a technology that uses receptors, cell receptors to look for new chemicals. And, uh, without exaggeration, it's a million times more sensitive than current chemical analytic techniques. so this offers great promise in finding out the new things, uh, that we need for medicine or industry. so, you know, this is a very exciting opportunity. Like anything else needs commercial backing but we're working on that too.

Julio Martínez-Clark: (17:26)
Excellent. Very good. So, let, let's talk about your specific experience in Latin America or your plans in the region. What is it that you have done, uh, Ethan or Nisha in Latin America? Have you collaborated with researchers? Have you worked, uh, as consultants for local companies? Um, please elaborate a little bit more on that.

Nishi Whiteley: (17:52)
Okay. Well, um, as of late, Credo Science has not, uh, worked directly with any partners, but we certainly would welcome the opportunity to get to work with some Latin American companies, especially in terms of being able to assist them with formulation, uh, for medicinal products, uh, or pharmaceutical focused products. Um, also, we would really like to work with, um, Latin American companies in terms of providing certain clinical consulting services. Uh, but I would say that here in the last probably three years, um, I personally have had the opportunity to work with, I'd say four companies, um, in Mexico and Colombia specifically.

Julio Martínez-Clark: (18:45)
Fantastic. Okay.

Ethan Russo: (18:47)
Beyond that, we've been very involved in educational processes, uh, throughout Latin America. I've lectured in all the countries I mentioned, um, both in person and, uh, virtually, This week I'm giving a second lecture to a program in Mexico. There were 500 physicians and other professionals in the lecture I gave last week. I dare say that I'm better known in Latin America than I am in my own country. But, uh, and this is after lecturing in English, I'm afraid, uh, my Spanish, I don't have confidence in my Spanish to lecture that. That was really it. Um, you know, I, we really love the educational process and, um, the kinds of enthusiasm with which we've been met is really affirming. Um, you know, and, uh, I, I know many physicians, uh, throughout Latin America, these are terrific people with, uh, so much to offer patients. Again, they need the handcuffs taken off, uh, so they can provide better medicine to patients.

Nishi Whiteley: (20:00)
When Ethan gets done speaking, he's usually mobbed like a rock star, and we spend 30 to 45 minutes me taking pictures with all of his fans

Julio Martínez-Clark: (20:10)
Awesome. That's so nice. Very good to hear. So, um, let's, let's talk about your plans. Any specific plans in Latin America for CREDO science or any of your partners? What do you see coming, uh, to the region?

Nishi Whiteley: (20:28)
Well, we have a couple of high-priority projects that we'd really like the opportunity to work on, but they all require some sort of partner. And so we've listed those actually on our, our website, which is, uh, credo science.com. Under the Projects tab. Uh, we have some information there about the things that are, um, most important to us. So, um, we're really looking to work specifically on neurodegenerative diseases, brain trauma, endometriosis, um, and anxiety disorders, just to make, um, just to name a few.

Julio Martínez-Clark: (21:15)
Ok. Yeah. What I see is that a lot of foreign companies doing business in Latin America with cannabis, but I see very little, very few local companies that are homegrown and are doing something meaningful. So I wonder why is that. I mean, what needs to happen in Latin America for the region to have, to have companies?

Nishi Whiteley: (21:40)
It requires capital. I mean, this is, it's challenging because you're working against a global framework and a regional framework, national framework, state local framework that is all generally anti-cannabis. And so it, it really is a whole lot of swimming upstream. It requires, uh, passion for companies that are just getting into this for the money. This probably is not the industry for them. Uh, you, you have to really care about, uh, the potential the plant provides to human beings. Um, because if, if, if you don't have that passion for it, just, it's, it's gonna be too hard. And so it takes a sincere interest in people who want to make a difference and see the components of the cannabis plant as being a potential solution to important problems. So, um, that's first. And then you've gotta find people that actually have access to capital that share that vision.

Julio Martínez-Clark: (22:53)
Good answer. Yeah. Makes sense. And what's the future of the industry? What's the outlook in your opinion? I mean are these barriers going to be removed eventually? I mean, what do you see unfolding in this industry?

Ethan Russo: (23:07)
Sure. We, we hope so, but, uh, it's been a slow process. I can, I'm old enough to remember quite well that, uh, it looked like cannabis was on its way to decriminalization in the 1970s in the US but then it was set back in the Reagan era. It was set back many, many, many steps. And it's taken all this time, uh, to get to the point where it's possible, uh, to have progress. Uh, obviously, uh, the world has a lot of problems, Climate warfare, economics, um, this isn't a top priority, uh, for everyone. But with, uh, legalization and proper regulation, this can be a terrific industry that employs, uh, countless people into the benefit of overall, uh, health. Uh, not only for people but for the planet. Uh, cannabis is a crop that properly grown can help heal, uh, the earth that sounds lofty or granola-ish, but, uh, it actually is true. so, again, we need backing. We need backing with the kind of people that Nishi mentioned, uh, that understand the plant and have a passion for what it can provide and not just look upon it as a, uh, an income source. Um, uh, all too often investors in this area are interested in the money or coming to this from another industry like real estate or entertainment. Um, cuz they think that this is the next good way to make cash. Um, usually they're not going to be successful. Um, it needs, uh, it can't be done by one person either. Uh, big teams, uh, and teamwork are required, uh, to make a go of it in this field.

Julio Martínez-Clark: (25:06)
Okay. Very good. And what's the role of Big pharma with cannabis?

Ethan Russo: (25:12)
They're largely an obstacle. Um, Julio, the problem is pharmaceutical companies are mostly interested in having their own product. In other words, a novel molecule that they can patent, uh, and control. So, big pharma doesn't understand plant-based medicine. Uh, first of all, they think that they can't, um, have that kind of intellectual property protection. They can, but it requires having a unique preparation or a unique delivery system, uh, so that you can patent that. Um, they also don't understand that no single synthetic molecule can do what a plant-based medicine can do. That's called a botanical. Botanicals don't work usually with a single active component. Rather, they use a group of different, uh, compounds, uh, that work in concert in, uh, in our synergistic of a boosting effect on one another, what we call the entourage effect. Um, so it's not just the soloist, whether it be THC or C B D, but this whole entourage of compounds, the minor cannabinoids, the terpenoids, uh, that really make, uh, cannabis a unique and versatile medicine.

Julio Martínez-Clark: (26:43)
Wow. This is fascinating, Ethan, and thank you for that explanation. I mean, again, I'm getting a top education here from you. I've, this is all new to me. It's very exciting, especially for, uh, Latin America because of the potential of this, of this plant or the potential that the region, uh, presents to the industry as a place to, to, um, cultivate right. And to do research

Nishi Whiteley: (27:11)
And to be a supplier to the world of high-quality cannabis-based medicines, including cannabis can pharmaceuticals.

Julio Martínez-Clark: (27:23)
Okay. Yeah. Very well said.

Nishi Whiteley: (27:26)
Latin America is well positioned is what I said.

Julio Martínez-Clark: (27:37)
Yes, well well-positioned. Yes, you're absolutely right. And I think the countries in the region have understood this slowly one by one. I mean, Columbia is probably one of the best examples. I think Europe-wide also is well advanced in the regulations. Very open. So the other question that I have for you, uh, Ethan and Nishi, is there any other plant like mushrooms or something that eventually will get, um, the same treatment that cannabis is slowly getting, uh, where Latin America can also succeed?

Ethan Russo: (28:22)
You know what, It's an interesting phenomenon, but, uh, just like there's been a flurry of, uh, excitement in commerce related to cannabis, and particularly cannabidiol. Some of those investors are now shifting into mushrooms and, um, uh, philosophy mushrooms. And these are extremely promising. But if the question were a little bit different, Julio, let's ask, is there a single plant that has all the, uh, potential, uh, biochemically and medicinally that cannabis does? The answer is no. Absolutely not. We've ever discovered, uh, so far has the capability of, um, treating so many diseases. And there's a reason for this. Uh, thc, the main psychoactive ingredient of cannabis works analogously to natural chemicals within our bodies called endocannabinoids. Cannabinoids within the endocannabinoid system are what keep all our other physiological functions in balance. So, uh, the THC and other cannabinoids can influence the system, highlights how this plant can be beneficial for so many seemingly unrelated conditions.

Julio Martínez-Clark: (29:46)
I see. Excellent. Very good. All right, guys, Ethan, Nishi, is being a delightful conversation, Uh, very educational for me and for listeners, I'm sure. And I'm so happy to reinforce the idea that Latin America plays and will continue placing a predominant role in this industry, in this thriving industry with a great future, apparently. So, um, thank you for being on the show today. I hope that it was also a nice conversation for you. And I encourage listeners to visit your website and I will keep it in the back of my head if I see any opportunities for you guys to partner with local companies in Latin America.

Ethan Russo: (30:41)
We very much appreciate that and the opportunity to speak with you.

Nishi Whiteley: (30:46)
Thank you, Julio.