Arcadia Biosciences Announces New Business Unit Dedicated to Cannabis

Arcadia Biosciences,Inc. (NASDAQ:RKDA) today announced the company will apply its expertise to a new crop: cannabis. With the establishment of Arcadia Specialty Genomics™,the company is dedicating a first-of-its-kind strategic business unit to the optimization and standardization of cannabis plant content, quality, climate resiliency and yield. Arcadia Specialty Genomics intends to conduct its business only in federal and state markets in which its activities are legal.

With a fifteen-year track record of agricultural innovation, Arcadia Bioscienceshas brought new and beneficialcrop traitstomarket through its advanced, proprietary approach to plant breeding andgene editing. With products such as GoodWheat™ flour and SONOVA® GLA safflower, the company is an industry leader in the development of high-value food ingredients and nutritional oils that meet consumer demands and improve crop outcomes for farmers. Now, the company will apply its expertise to the burgeoning cannabis industry, with an initial focus on the hemp market. Chief Financial Officer MattPlavanhas been appointedpresidentof Arcadia Specialty Genomics.

“Within the rapidly growing legal cannabis industry, we see enormous opportunity in – and demand for – improved plant quality, productivity, consistency and resilience,” said RajKetkar, president and CEO of Arcadia Biosciences. “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.” Ketkar added, “I can think of no one better than Matt Plavan, an industry veteran with a track record of leading transformational market pivots, to lead our new strategic business unit.”

The recent passage of theU.S.Agriculture Improvement Act of 2018 – also known as theFarm Bill – confirmed the federal legalization of hemp, the term given to non-psychoactive cannabis containing less than 0.3% tetrahydrocannabinol (THC). It also included provisions for legalizing on a federal level hemp’s cultivation, transport and sale for the first time in more than 75 years. Hemp, previously considered a Schedule 1 drug and banned as an agricultural crop, lacks substantive plant biology research and suffers from suboptimal genetics,highly fragmentedgermplasm and rampant inconsistencies.

According to Plavan, hemp’s newly legal status creates significant market opportunities for a company known for its agronomic excellence. “As we’ve evolved from an agricultural trait provider to afunctional ingredient seller, we’ve developedcapabilities and partnershipswhich will drive innovation andgrowth in hemp-derived oils such as CBD and other functional plant properties. 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.”

The Hemp Business Journal estimates that the hemp CBD market totaled $190 million in 2018 – an astounding rate of growth for a category that didn’t exist five years ago. By 2022, the Brightfield Group, a cannabis and CBD market research firm, projects sales to reach $22 billion.

Arcadia Specialty Genomics will developnovelcannabisvarietiespossessing productivity, pest resistance andcrop qualitytraitsfor license to cultivators, and for products serving the nutraceutical and food industries.Thesedevelopments are made possiblethrough a proprietary approach combining conventional breeding, Arcadia’s advanced screening and breeding technology known as TILLINGand gene editing.Through this process, plant populations carryingdesirable, high-valuegenetic characteristics are identified, isolated and bred to reproduce. Arcadia Biosciences is a recognized leader bringing deep experience and establishedcapabilities in this kind of crop innovation and optimization, delivering proven results safflower, wheat and durum such as:

A 100 percent increase in the production of Omega-6 GLA for safflower.
Two to six times more fiber than standard wheat and durum with its proprietary GoodWheat™ flour.
A 65 percent reduction in allergenic gluten content in its GoodWheat™ flour.
30 percent more lysine, an essential amino acid, in GoodWheat™ as compared to standard wheat.
“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,” said Plavan. “Our near-term focus will be acquiring federal and state licensure in key geographies to launch our research and pilot programs, for which we expect to begin operations in early 2019. In parallel, we are evaluating key partnerships to extend our capabilities vertically, maximize shareholder value and establish Arcadia Specialty Genomics as the leading science-driven company and genetics innovator forcannabis.”