With big players in the cannabis industry making moves left and right, an MOU for a few million shouldn’t cause much of a ripple, but for Radient Technologies (RTI.V), it’s made a big difference.
Radient currently runs a 20,000 square foot, GMP compliant, Natural Health Products (NHPD) licensed facility in Edmonton, Alberta, where the company extracts natural ingredients for a range of industries including food and beverage, nutrition, supplements, pharmaceuticals, and cosmetics. Radient also employs patented extraction technologies, originally developed by Environment Canada researchers.
Aurora Cannabis (ACB.V), in the wake of the newly released Task Force on Cannabis Legalization and Regulation report, has announced the company has inked a Memorandum of Understanding with Radient to evaluate an exclusive partnership for the Canadian market with regard to the joint development and commercialization of superior and standardized cannabinoid extracts.
The announcement sent Radient stock soaring, from $0.15 to over $0.40 Thursday and, though the stock dropped 14% the following day with expected profit-taking, it’s left the smaller player with a $22 million market cap that’s double what it was 48 hrs ago.
An added plus for RTI will be that its warrants reportedly average out at $0.30, which may potentially have seen some $7 million roll in the door on Thursday’s price, and may also explain the drop today. RTI had been trying to fill a $5 million financing at $0.10 a share, so that will either be shut down now – or filled in a hot minute.
Up until now, Aurora Cannabis (ACB.V) counted itself as one of the leading medical marijuana (MMJ) producers and distributors licensed by Health Canada with a commitment to $8/gram pricing and $5/gram compassionate pricing. However, the cultivation of marijuana for medical use is only the first stage in this nascent space, and administering extractions rather than smoking is the only way to be clinically accurate in dosage levels.
Radient thinks it has proprietary technologies that will produce high-quality standardized extracts with faster throughputs, improved yields, higher purities and lower costs when compared to conventional extraction methods.
Aurora Cannabis CEO Terry Booth, commented, “Radient’s technology promises a significant advance in both quality and efficiency of cannabis extract production. This is especially important considering global market dynamics, which point to strong demand for cannabis derivative products. Importantly, Radient’s extraction technology has also been proven to deliver superior preservation of aromatic compounds known as terpenes, which are key to the cannabis consumer experience and the Aurora Standard.”
Denis Taschuk, President and CEO of Radient Technologies, added, “The combination of Aurora’s recently announced capacity expansion with our proprietary high-throughput extraction technology has the potential to play an important role in meeting the fast-growing demand for quality cannabinoid extracts.”
Aurora is moving to ensure that it will have more than enough plant material for extracting terpenes and other oils as the company has commenced construction of an 800,000 square foot production facility in Leduc, Alberta.
Yes, you heard me right: 800,000 square feet. That’s a double-Supreme (SL.C).
The facility, to be known as “Aurora Sky”, is expected to be capable of producing in excess of 100,000 kilograms of high-quality, low-cost marijuana per year.
The Radient deal is only an MOU, but it is a serious step in the right direction as the MMJ market continues to evolve and mature. If Aurora and Radient are able to make it through due diligence to a definitive agreement and then execute on their strategy, they could very well play a major role in the upcoming “clinical” age of MMJ and the potentially massive recreational marijuana market.
Right now, market activity is exaggerated as traders are still giddy over the TFCLR’s report. We will see some steam escape over the next week as investors find their footing, but the long-term impact of TFCLR’s recommendations will build quickly, powering another surge in the legalized marijuana cultivation space, with a potential grand consolidation of dispensaries.
As always do your due diligence before making any investment decision.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.