Carson company produces exotic mushrooms used in medicinal products

John Holliday gets excited when he's talking about mushrooms.

Walking through the offices of Aloha Medicinals on Arrowhead Drive on the north side of Carson City, Holliday veers into a side office to show off a collection of exotic cordyceps, tiny mushrooms that grow out of the bodies of dead insects like caterpillars and crickets. These fungi have been gathered from remote areas in Asia and South America with the hope of curing everything from the common cold to cancer.

Aloha Medicinals is a bio-pharmaceutical company that specializes in creating the raw materials from mushrooms to make medicines, particularly immune-enhancement products. Holliday is the company's founder and president.

"We think this is the next generation of medicine," Holliday said. "These are medicines derived from natural products, but using modern technology to standardize it."

Holliday explains that the basic science is based on how fungi coexist with bacteria in the natural world. According to Holliday, bacteria and fungi grow from the same food supply, but bacteria are smaller, move faster and reproduce quicker than fungi.

"Nature has evolved this mechanism to allow the fungus an advantage in the food chain," Holliday said. "Fungus, yeast and mold exude compounds out from their cells into the surrounding environment that kill or stun bacteria. These are the compounds we call antibiotics. This is where penicillin comes from."

By isolating these antibacterial compounds, Holliday said they can produce products that can combat a wide range of diseases for which modern medicines often don't work or produce too many side effects.

From Tibet to Carson

One of the cordyceps Aloha mass produces grows out of the heads of caterpillars living above 14,000 feet in Tibet. Holliday said these cordyceps have been used in traditional Chinese medicines for 1,000 years, and he and his crew led an expedition to Tibet to find and gather them for their research.

Holliday said that in San Francisco, these cordyceps can fetch $75,000 per kilo.

But in their Carson City facility, Holliday said they can produce 175,000 kilos of cordyceps per month, more than the entire world supply of wild cordyceps.

The company cultivates the fungi in a laboratory setting, isolating it to genetically pure strains. It then injects these cultures into bags of sterilized growing medium where it grows until ready for harvest. It's then processed to be ready to use in different products.

"We are looking at it through a lens of modern science, how we can utilize technology to bring those effective, non-toxic, low-cost medicines to address today's serious illnesses of cancer, HIV, diabetes," Holliday said.

What is medicine?

Under U.S. law, the products Aloha produces are classified as dietary supplements. Holliday explained that in the U.S., any product classified as medicine has to be cooked down to a single molecule before it can be tested, a standard he derides as absurd.

"Most of the world does not have an artificial divide between what is considered real medicine and what it considered traditional medicine," Holliday said. "Whatever medicine is useful for the patient is what is being used. We run clinical trials, we publish studies, we have patents. There's no difference between what we are doing and what Pfizer is doing, other than Pfizer is working at the single-molecule level."

Aloha produces the raw materials for more than 700 companies who use them to make products. Half of their products are used for animals, such as compounds claiming to cure or prevent cancer in dogs.

Other products are being distributed in Africa as a cure for HIV. Holliday said they were doing cancer research, when they noticed the people taking the drug for cancer who had HIV were getting better.

"We have a product that is distributed in about 18 countries which is more effective than any of the HIV drugs being used in this country, is a whole lot cheaper and non-toxic," Holliday said. "The party line today is that HIV is an incurable disease, and that is not the case. We have many patients that are converting from HIV positive to HIV negative."

Holliday also claims they have compounds from mushrooms that can cure the common cold.

Scifi fungi

But if this sounds far-fetched, Holliday also said the company is doing work that is straight out of the movie "Jurasic Park." He said they are reanimating fungus taken from coal deposits in order to create antibiotic compounds that can battle so-called super bugs that have become resistant to current treatments.

"Eight million years later, the bacteria present today have never been exposed to the antibiotics from back then, and they have no resistance," Holliday said.

Holliday hails from Maui, Hawaii, where he started Aloha Medicinals in 1999. The company soon outgrew the island and moved to Santa Cruz, Calif., in 2002. But Holliday said operating there proved to be very expensive, and they moved to Carson City in 2007.

And while it has only been in Nevada for a short time, Aloha has garnered several accolades. The company was named the Nevada Small Business Exporter of the Year for 2009. Aloha also received the 2007 Governor's Industry Appreciation Award, and the 2008 Nevada Excellence in International Business Award.

"This company has been growing at more than 30 percent per year for 10 years," Holliday said. He said they are looking at doubling their facility space as demand for the company's products grows.

"If it's made from a mushroom, and it's made in America, chances are it came from here."