Jason Poulos and Anthony Farina are developing a yeast-based cannibinoid.

Jason Poulos and Anthony Farina are developing a yeast-based cannibinoid. Photo by Jamie Scott Lytle.

— What if the weed industry could brew cannabis like Budweiser brews beer — in big steel vats designed for large-scale production? It would certainly be better for business than waiting on cannabis plants to grow from the ground.

With the legal cannabis industry expected to be worth $22 billion by 2020, a cannabis factory could be a goldmine. But can scientists do it?

Jason Poulos says yes. In fact, he’s already doing it in small batches.

Poulos is co-founder and CEO of Librede Inc., a startup working out of a small incubator in Carlsbad. The tiny, two-person company has been operating in stealth mode for the past two years, fiddling with the genes of cannabis and yeast.

In the simplest terms, Librede has spliced the DNA of yeast and inserted the genes of a cannabis plant. They’ve spent years tweaking the science so that bugs in vats will grow more marijuanalike compounds and less yeasty compounds.

The goal is to isolate THC (tetrahydrocannabinol) and CBD (cannabidiol) to start, the two most popular chemical compounds found in weed. For quick reference, THC is the one that gets you “high.” CBD does not, but has promising applications in medicine.

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The value of such a “bio-factory” is obvious to those working in the cannabis industry, but outsiders have difficulty understanding the appeal. Poulos attempted to explain his startup’s worth at a recent pitch event hosted by Tech Coast Angels, to which a panel of judges largely giggled and shifted in their seats. One judge admitted, “I’m not sure I understand why you would want to do this.”

Let me explain.

Cannabis is a hot commodity, with medical use legal in 25 states and recreational use legal in four states. In November, several more states will vote on legalizing recreational use, including California, home to nearly 50 percent of all legal pot sales in the country.

The legal U.S. cannabis market brought in $5.4 billion in annual sales in 2015, and with huge markets on the brink of legalization, forecasters are expecting that number to grow dramatically in the next 10 years. One report even estimated the industry would be worth $50 billion by 2026.

But that number doesn’t include the potential applications lurking in the pharmaceutical industry. If marijuana becomes legal federally, that would lift hurdles for Big Pharma to pursue research in many mysterious compounds found in cannabis.