viewArcadia Biosciences Inc

Arcadia Biosciences looking to grow a healthier world with GoodWheat and GoodHemp


The company is innovating to make wheat better for you and longer-lasting as well as building a genetically superior line of hemp

Bowls of pasta, grains, bread on a plate with knife

Quick facts: Arcadia Biosciences Inc


Price: 2.06 USD

Market Cap: $45.68 m
  • GoodWheat products includes flour enriched to be healthier, contain less gluten and last longer
  • GoodHemp is a commercial brand of what it calls genetically superior hemp seeds
  • Also has active nutritional oils development program and animal feed ingredients business

What Arcadia Biosciences does:

Arcadia Biosciences (NASDAQ:RKDA) wants to put better tasting, higher nutrient and lower gluten whole wheat in your shopping cart - and give you genetically superior hemp while they are about it. Set up in Davis, California as a research and development company in 2002, Arcadia is engaged in pioneering research on improvements to crops.

Chief among them is GoodWheat. Arcadia’s portfolio of wheat flour ingredients which offer healthier enriched and whole-grain wheat options while providing the same baking quality, taste, and texture as traditional wheat with a longer shelf life. 

The GoodWheat high-fiber line, for example, offers the benefits of high-fiber without the need to add an extra source of fiber in the form of corn starch or another additive. That gives the food companies and consumers the benefits of more fiber without the downside of having to shoehorn in additives that diminish texture or taste.

Using patented Arcadia trait technology, the storage life of whole wheat flour can be extended by slowing the enzymatic processes that reduce shelf life. Because milled flour from wheat carrying Arcadia trait technology oxidizes more slowly, it cuts down on the bitterness associated with whole-wheat products.

In the third quarter of 2020, the company signed a strategic business venture with Three Farm Daughters, a majority female-owned North Dakota-based consumer food company, to develop and market food products using Arcadia’s patented GoodWheat technology. Since then, the companies have launched multiple Three Farm Daughters-branded food products, including pastas and flour, that leverage the enhanced nutritional profiles of GoodWheat ingredients. 

The company has also turned its expertise with wheat to another crop with GoodHemp, a commercial brand of what it calls genetically superior hemp seeds. GoodHemp delivers superior emergence and growth characteristics, and is available as both seeds and transplant starts. Its Complia varieties help growers meet compliance requirements because of their ultra-low THC profiles. On top of that, some GoodHemp varieties are also tolerant to a variety of diseases.

In late 2020, Arcadia closed a transaction with Industrial Seed Innovations (ISI), an Oregon-based industrial hemp breeding and seed company, to acquire its commercial and genetic assets, including seed varieties, germplasm library and intellectual property. ISI’s popular Rogue and Umpqua seed varieties which become part of Arcadia’s portfolio, alongside the GoodHemp line of genetically superior hemp seeds, transplants and extracts.

The company also produces plant-based oils using safflower plants – a robust, oil-rich plant – to produce high levels of nutrients that are not prevalent in people's diets. It launched its first product, SONOVAGLA Safflower Oil in 2012 and maintains an active nutritional oils development program.

And Arcadia also has a line of GoodWheat nutritional ingredients for animal food manufacturers designed especially for farm and companion animals based on the same technologies developed for people.

How is it doing:

Arcadia Biosciences has been making solid progress in 2021.

For Arcadia's last quarterly results, released in May 2021, first-quarter revenue (ended March 31) increased by triple digits year-over-year. It generated $828,000 in 1Q revenue, compared to $309,000 in the year-ago period. That is nearly a 300% jump, driven by GoodWheat grain sales and higher GLA product sales.

In addition, the company has been making acquisitions.

In May, it acquired for $4 million in cash plus 827,400 Arcadia shares the assets of Lief Holdings LLC and its portfolio of wellness products from The Parent Company (NEO:TPCO) along with select assets of Live Zola LLC. 

The acquisition includes leading consumer CBD brands like Soul Spring, the top-selling CBD-infused botanical therapy brand in the natural category, as well as Saavy Naturals, a leading line of all-natural body care products. 

Arcadia also acquired the Lief operations, which occupy a 20,000 square-foot, GMP-licensed, ISO-certified manufacturing facility with onsite capabilities including ingredient sourcing, formulation, manufacturing, QA/QC, warehousing, flexible order fulfillment, and logistics.

The company also took on some experienced managers. Chris Cuvelier, founder and CEO of Zola, will join Arcadia as chief growth officer, and Brett Michel, COO of Lief, will join as general manager of the acquired brands. Belinda Yao, the former vice president of operations for Zola, recently joined Arcadia as vice president of operations.

Also in May, Arcadia acquired the assets of Spanish food ingredients company Agrasys SA. The company will commercialize Tritordeum -- a proprietary cereal grain that's highly functional in applications such as bread, crackers, pasta, baked snacks, and beer.

Earlier in the year, the company revealed that the US Patent and Trademark Office had awarded the company a patent for its high fiber resistant starch GoodWheat. Arcadia Biosciences noted that this latest patent, the 28th patent for Arcadia's GoodWheat non-GMO wheat platform, broadens protection of the company's platform of specialty wheat ingredients with improved nutrition profiles. The company also said the patent broadens its intellectual property estate to include short deletions that may be obtained with CRISPR and similar genome editing tools. 

Arcadia noted that its high fiber resistant starch GoodWheat varieties have eight times the total dietary fiber, with 30% fewer calories compared to conventional wheat varieties, along with reduced gluten and extended shelf life. 

Aside from its partnership with Three Farm Daughters, Arcadia is also bringing its GoodWheat high fiber wheat to market in North America through a partnership with Bay State Milling and Arista Cereal Technologies, under Bay State's HealthSense brand portfolio.

Arcadia also has announced that four of its GoodHemp varieties have all passed the rigorous standards of the US Association of Official Seed Certifying Agencies variety review board. Also, three of its CBD-Dominant GoodHemp seed varieties have earned approval from Health Canada for consistency and compliance.

GoodHemp is Arcadia's commercial portfolio of genetically superior hemp seeds, transplants and extracts introduced in 2019.

In the boardroom in February, Arcadia boosted its board with the appointment of Debbie Carosella, a food industry executive and former manager as a director. Carosella is the former CEO of Madhava Natural Sweeteners, which provides natural alternatives to refined sugars and artificial sweeteners.

On the financing front, at the end of January, Arcadia entered into definitive agreements for a private placement, priced on an at-the-market basis, to raise gross proceeds of approximately $25.1 million

Arcadia intends to use the net proceeds from the offering for general corporate purposes, which include building its global GoodWheat family of consumer brands, development of its e-commerce, direct-to-consumer digital marketing infrastructure to launch its Three Farm Daughters branded pasta and flour products, and to fund its Archipelago Ventures Hawaiian hemp cultivation and mainland CBD extraction operations.

In December 2020, Arcadia had closed a previously announced $7.7 million registered direct offering, which it planned to put toward GoodWheat digital marketing programs, brand and retail channel development. 

Inflection points:

  • Building global GoodWheat family of consumer brands
  • Developing e-commerce, direct-to-consumer digital marketing infrastructure for Three Farm Daughters branded products
  • News on Archipelago Ventures Hawaiian hemp cultivation

What the boss says:

"With our acquisition of select assets of Lief Holdings, LLC and Live Zola, LLC, we added to our business a well-established portfolio of best-in-class CBD-infused and wellness products generating $6 million in recurring annual revenues with strong growth potential, and we gained access to a national distribution network offering retail sales synergies with our GoodWheat and GLA consumer products," said CEO Matt Plavan, commenting on the company's 1Q results.

"In line with our stated strategy to increase our verticalization and maximize control over our supply chain to ensure quality from seed to sale and to participate more fully in the value of the brands for our proprietary innovations, the Lief manufacturing capability and distribution into over 5,000 retail doors delivers resoundingly on that strategy."

Contact the author: patrick@proactiveinvestors.com

Follow him on Twitter @PatrickMGraham

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