Applied DNA Sciences, a Stony Brook-based biotechnology company, has entered a $5 million nonbinding licensing agreement with a Canadian cannabis consultancy that will use the Long Island firm’s “molecular tagging” technology in the marijuana industry.
Applied DNA, which uses plant-based DNA to make anti-counterfeiting and authentication products, entered into the agreement with Calgary-based TheraCann International Benchmark, according to a company news release. Applied DNA unveiled its new marijuana tracking technology at an international cannabis conference in Panama on Tuesday.
The local company’s technology allows businesses and distributors to place small amounts of specially engineered DNA that act as a unique marker of authenticity on goods. Using that technology, TheraCann plans to help legal growers, processors and distributors of medical and recreational marijuana to better track cannabis.
The goal is to “prevent the invasion of black-market cannabis supplies into authenticated, secure supply chains,” James A. Hayward, chief executive of Applied DNA, wrote in an email.
TheraCann has agreed to pay Applied DNA the money over a six-month period once a final agreement is signed.
Applied DNA entered a $1 million agreement with the firm last year to pair blockchain technology with the marijuana industry.
Chris Bolton, chief operating officer of TheraCann, said in a statement that its offering “will assist global governments, law enforcement, producers, processors and distributors in stabilizing the cannabis supply chain” and could “assist with both domestic and international import and export.”
In December, Gov. Andrew M. Cuomo called for the legalization of recreational marijuana statewide as part of his 2019 legislative agenda.
Earlier this month, Applied DNA disclosed in a government filing that it had received two delisting notices from the Nasdaq Stock Market related to the company's stock price, market value and other minimum requirements set by the exchange.
Shares of Applied DNA closed down 9 percent at 54 cents on Wednesday.