Arcadia Biosciences Inc (NASDAQ:RKDA) CEO Matthew Plavan told investors Thursday that GoodHemp, the company’s new USDA-compliant seed line, is shaping up into a strong revenue spinner with over $3 million in pre-season seed purchase commitments.
In December 2019, Arcadia Biosciences launched a new product line: GoodHemp. It’s the company's new commercial brand for delivering genetically superior hemp seeds, transplants, flower and extracts.
Arcadia Biosciences started accepting advance orders in December for the first variety in GoodHemp's catalog, Complia Bot+, a widely-adapted cannabis strain that delivers high CBD content (more than 10%) with ultra-low tetrahydrocannabinol (THC), the psychoactive compound in cannabis.
It is part of the Complia hemp seed line Arcadia is bringing to market through GoodHemp, with four additional proprietary varieties in early adopter farmer trials, with sales expected in the 2020 season.
This innovation comes just months after the US Department of Agriculture’s Interim Final Ruling for hemp cultivation, which mandates that states test hemp crops and dispose of "hot" crops that exceed 0.3% THC.
Orders pouring in
“In just 50 days following the launch of GoodHemp, our new USDA-compliant seed line, we've received over $3 million in pre-season seed purchase commitments,” Plavan said in a letter to shareholders.
“Revenues for these initial commitments will be recognized when the seeds are delivered to growers, between second and fourth quarter this year,” he added.
Plavan noted that with grower interest in the company’s proprietary USDA-compliant seed line “accelerating,” it anticipated “additional purchases” over the next few months as farmers focus on quality genetics for spring planting.
“Revenues from these committed and expected future orders are in line with the greater than $10 million in total revenues for 2020 we forecasted to shareholders,” said Plavan.
Market leader in high-value hemp innovations
The Arcadia Biosciences boss said a “vital element” of the firm’s strategy to become the market leader in high-value hemp innovations is to deploy the best technologies in “partnership with the hemp grower community.”
“We are essentially rapid prototyping novel non-genetically modified hemp varieties that target quality and performance characteristics highly desired by growers to overcome their greatest challenges, while working directly with them in field deployment and monitoring to accelerate their speed to success,” pointed out Plavan.
“This new proprietary discovery process – called ArcaTech – combines modern breeding science and genomics technology with real-time market intelligence from the field,” he added.
Plavan also said that elite growers who enroll in the firm’s GoodHemp Innovation Partners program, located in six major hubs including Hawaii, the Pacific Northwest, Southern California, Northern California, the Desert Southwest and the Mountain West will provide an “invaluable feedback loop” to guide the company’s development strategies.
“The strength of our scientific and agronomic foundations have positioned us to not only meet the acute demand for quality and compliant seeds from growers targeting the multi-billion dollar cannabinoid markets, but also to unlock the full potential of this plant through its numerous other applications in the industrial and food ingredient markets,” said Plavan.
Strong demand for its new GoodWheat varieties
Plavan also drew attention to a significant milestone for GoodWheat. In December, Arcadia met initial commercial goals by recording first sales in two GoodWheat varieties optimized for resistant starch and reduced gluten.
"The limited first run of our reduced gluten wheat flour was sold online in two-pound bags and to date we have sold 90% of our available inventory, confirming interest from consumers avoiding gluten. We are now making commercial plans for this spring's wheat harvest," said Plavan.
"We are well-positioned for significant growth and market differentiation in 2020, with a focus on breeding innovation, grower collaboration and compelling commercial product lines," he added.
The David, California-based company focuses on three strategic crops: wheat, soybeans and hemp. The company's GoodWheat product line, which delivers nutritionally enhanced ingredients such as high fiber resistant starch and reduced gluten wheat varieties, recently made its commercial debut.
Contact the author Uttara Choudhury at [email protected]
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