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Arcadia Biosciences shares soar on move into cannabis business

The California-based agricultural food-ingredient company has set up a unit, Arcadia Specialty Genomics, to focus on the genetic improvement of cannabis and hemp

cannabis plant
Arcadia Specialty Genomics will develop new cannabis varieties that are more productive and more resistant to pests

Shares of Arcadia Biosciences Inc (NASDAQ:RKDA) soared Thursday after the agricultural food ingredient company announced it would apply its breeding techniques to a new crop: cannabis.

The Davis, California-based company has set up a unit, Arcadia Specialty Genomics, to focus on the genetic improvement of cannabis as well as other crops.  And Arcadia’s chief financial officer Matt Plavan has been appointed president of this new business.

Investors were enthusiastic about the move, sending Arcadia shares soaring 63% to $8.80 before the opening bell Thursday.

READ: Arcadia Biosciences CEO offers time line for getting new products to market

Arcadia’s move to apply its expertise in crop improvement to cannabis, with an initial focus on the hemp market, comes at a time when the cannabis market is burgeoning.

“Within the rapidly growing legal cannabis industry, we see enormous opportunity in – and demand for – improved plant quality, productivity, consistency and resilience,” said Raj Ketkar, CEO of Arcadia Biosciences in a statement. “With this new operating unit, Arcadia Specialty Genomics, we are uniquely qualified as a proven crop improvement company equipped to address the legacy challenges facing a plant that until recently was largely grown unlawfully.”

The recent passage of the US Farm Bill, which legalizes the commercial production of hemp and spurs the growth of cannabidiols (CBD), creates considerable opportunity for Arcadia.

“As with our wheat and soybean products, we will create hemp-based solutions that allow farmers to be more productive and enable consumer-packaged goods companies to differentiate their brands in the marketplace,” said Plavan in a statement.

“Our ability to bring innovative traits to the market for some of the most complex plant genomes is unparalleled, and we’re excited to turn our attention and expertise to the critical needs facing the rapidly evolving cannabis industry,” Plavan added. 

Creating new varieties

Arcadia Specialty Genomics will develop new cannabis varieties that are more productive and more resistant to pests that can be licensed to cultivators and used for nutraceutical and food-based products.

Such developments are made possible through Arcadia’s approach, which combines conventional breeding, advanced screening as well as gene editing. Through this process, plant populations carrying desirable genetic characteristics are identified, isolated and bred to reproduce.

Arcadia develops high-value food ingredients and nutritional oils that aim to meet demand for healthier diets. The company’s agricultural traits are developed to allow farmers to be more productive and minimize the impact of agriculture on the environment.

Contact Ellen Kelleher at [email protected]

Quick facts: Arcadia Biosciences Inc

Price: 5.43 USD

NASDAQ:RKDA
Market: NASDAQ
Market Cap: $39.62 m
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