Aurora's ability to differentiate in its health segment is a key aspect of the licensing.
Its hemp segment will get a nice boost from the licensing approval.
Radient Technologies should generate good returns for Aurora over the long term.
Aurora Cannabis (ACB) got a nice boost on the news its partner Radient Technologies received its Standard Processing License from Health Canada, and rightly so.
I see 3 major benefits Aurora gets from the licensing, including benefits to its health and hemp segments, and the value of its holding in Radient Technologies growing nicely over the long term.
The level of value will be predicated upon the expected premium prices Aurora will be able to get from the products developed from Radient's proprietary extraction technology, along with the highly probable increase in sales in its medical and hemp units in the years ahead from its superior products.
Value to health segment
The key to long-term growth and profitability of Aurora Cannabis and other cannabis competitors will be the ability to differentiate while providing high quality products that go beyond being considered a commodity by the market.
That was and is the concern in the recreational pot market, and in the health segment, the market is looking for products, services or delivery systems that stand apart from the competition. With Radient Technologies Aurora gets that.
Here's how Radient describes its disruptive technology:
Radient has developed a new, proprietary technology for the extraction of active ingredients from biomass, such as cannabis and hemp. Radient's patented Microwave Assisted Processing or MAP™ technology is based on the selective and localized heating of the moisture that is present in all natural materials, using microwaves as the energy source.While conventional solvent-based extraction is a diffusion-driven process, which relies on concentration gradients, Radient's continuous-flow MAP™ technology provides instant volumetric heating of the biomass, creating a targeted, pressure-driven extraction process. MAP™ extraction allows higher throughputs for a much faster recovery of the extracted compound (minutes vs hours). The process also increases yield and purity of the extracted compound, while decreasing solvent and energy requirements.
Because only water and/or ethanol are used as solvents, MAP™ eliminates the need to use harmful toxic solvents. In comparison, MAP™ is faster, less expensive and more scalable than alternative conventional extraction technologies, including supercritical fluid/CO2 extraction, column chromatography, conventional solvent extraction and steam distillation.