Hicks on Biz: Radient Technologies part of thriving biotech sector By GRAHAM HICKS, first published Edmonton Sun, January 19, 2018
Two weeks ago, this column set out on a quixotic research expedition: to find out how much manufacturing in Metro Edmonton happens outside the oil/gas/petrochemical energy sector and to talk to the CEOs of such companies, find out how they succeeded in a city that traditionally draws its wealth from public sector employment and the oil patch.
For all the concern and tongue-wag about “diversification,” nobody really knows the actual numbers.
Statistics Canada, the No. 1 provider of such information in this country, places oil and gas processing and product manufacturing for the oilpatch into the catch-all “manufacturing” basket.
Because the information isn’t available, Edmonton Economic Development Corporation tackles diversification by assisting Edmonton companies of all stripes to expand their customer base beyond Alberta. Trying to classify Edmonton’s manufacturing companies as being in or out of the oilpatch would be an expensive exercise without a tangible return.
ATB Financial economist Rob Roach, however, passes on a 2012 report from Statistics Canada in which Edmonton and Calgary were compared in manufacturing sub-categories. “In Edmonton at that time, 40 per cent of annual manufacturing sales was classified as processing, machinery and equipment manufacture, most of which is oilpatch related.”
Therefore roughly 60 per cent of manufacturing in Edmonton in 2012 would not have been directly related to oil and gas.
“That said,” says Roach, “there’s an order of magnitude to consider. Current oil and gas-related revenue in Alberta ($80 billion) is the equivalent of the entire Ontario manufacturing sector (including automobiles) – and Ontario has four times our population.
“To build a major potato processing facility in Alberta would pump $200 million into the economy. But a new refinery or petrochemical plant puts in $5 billion.”
Radient Technologies has nothing to do with the oil biz. It’s a biotechnology company with a viable, new, patented technology – using microwaves to extract targeted compounds/molecules from biomass.
Everybody in the biotech business knew Radient had huge potential.
But everything that could go wrong seemed to go wrong. A plant was built in Edmonton, there were interested customers, but a lack of working capital hampered the operation.
“Our executive team worked two years without salaries,” says President and CEO Denis Taschuk. “We knew we had a transformative technology, the best way extracting ingredients from natural materials in a sustainable way. We knew we had the best results when it came to purity, to handling large volumes of feed stock.”
The saviour, the new customer that has taken the publicly-traded Radient Technologies from 14 cents a share a year ago to about $1.80 today, is medical marijuana.
Radient has excellent, proven technology to extract marijuana oil from large amounts of marijuana plants.
“By 2014, we were looking at cannabis. The industry knew we had something to offer. We talked to all the marijuana companies as they were in their formative stages. We did our own leg work, getting the licences we needed.
“Aurora Cannabis was planning its Aurora Sky growing facility at the Edmonton International Airport industrial park. Aurora realized what we could do.”
A memorandum of understanding was signed in December of 2016, a contract in November last year. Aurora has taken a 17 per cent interest in the company, for $12 million. Suddenly, raising capital was no longer a chore.
Taschuk is quite bullish on doing biotech business in Edmonton.
“Tax-wise, Alberta is still an OK place to be. We’re physically close to Aurora Cannabis, our biggest supplier and customer. Hemp has enormous extractive potential. Marijuana has all kinds of other medical properties.
“There’s no geographic disadvantage for us – transport costs aren’t an issue. Governments have been supportive – we’ve used the Leduc processing centre, the repurposed Vegreville provincial laboratory.”
Edmonton can supply Radient with qualified technologists and scientists as it grows to an expected 45-person payroll in 2018. Taschuk’s biggest challenge is attracting ultra-specialized plant chemists to come and work in Edmonton.
So, finally, the future looks rosy for Radient as a vital partner and necessary part of a new industry creating economic activity in the city … with a different kind of oil.