Shares of Arcadia Biosciences (NASDAQ:RKDA) rocketed Monday after the agricultural food ingredient company announced it has been granted an industrial hemp pilot program license by Hawaii’s Department of Agriculture.
The license will allow Arcadia to continue its new push into the hemp market as it permits the cultivation of industrial hemp in Hawaii for the purpose of agricultural and academic research. Hemp and hemp products produced under the program can be sold commercially.
In response to the news, investors sent Arcadia shares up 24.8% to $9.00 before the opening bell on Monday.
The Davis, California-based company announced last week that it has launched a unit, Arcadia Specialty Genomics, to focus on the genetic improvement of cannabis, hemp and other crops.
With this license, Hawaii becomes the first state where Arcadia Specialty Genomics will kick off its research and cultivation of hemp, planting on ten acres of recently-leased land next month.
The combination of the license and the cultivation facility underline Arcadia’s move to leverage its expertise as a science-driven company and genetics innovator in food crops into legal cannabis markets.
“As the only company working in the cannabis industry with a proven track record of improving plants and commercializing food ingredients from agricultural products using non-GM techniques, we’re ideally positioned to help hemp growers and end-users benefit from better hemp strains,” said Matt Plavan, CFO of Arcadia Biosciences and president of Arcadia Specialty Genomics.
“Being licensed by the state of Hawaii to participate in this highly selective program gives us an important head start and we’re moving quickly to establish our Hawaii research program immediately as we pursue expansion through licenses in other states,” Plavan added.
Arcadia’s move to apply its expertise in crop improvement to cannabis and hemp, with an initial focus on the hemp market, comes at a time when the cannabis market is burgeoning.
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.
Arcadia Specialty Genomics will develop new cannabis and hemp 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.
Contact Ellen Kelleher at [email protected]