Into the Weeds

A little more than 20 years ago, KGK Science was launched to verify claims for a growing health and nutrition industry. Now, with a new owner, it focuses on another budding sector

Photo: Najla Guthrie, president and CEO of KGK Science and Jeff Tung, CFO at Auxly Cannabis Group

LAST SUMMER, WHEN she teamed up with a venture capital firm to help get her business ready to sell, Najla Guthrie wasn’t sure who would be interested in buying.

Beginning in 1997, when Guthrie co-founded KGK Science, the firm had built a reputation for doing rigorous clinical trials for the health and nutrition industry. It proved or disproved claims made by sellers of dietary ­supplements and a variety of wellness products, growing to employ 70.

So, it made sense that a company in that field might be interested in purchasing the London lab. But it was a relatively new player that came in with a $12.3-million offer to buy KGK and run it as an independent entity.

Vancouver-based Auxly Cannabis Group Inc. purchased the lab in August and will rely on it to research a variety of cannabinoid products. “They wanted to have a research arm,” Guthrie says, “to get research done in a timely fashion.”

“Today, there is tremendous opportunity to do
cannabis research right, to explore the benefits of a
variety of products”
 —Najla Guthrie

Having recently expanded into ­cannabis research, Guthrie is reminded of the health-food market two decades ago when she and two partners started KGK. “We were ahead of our time, offering actual research and clinical trials to back up the claims made. Until that point, it was mostly testimonials, not science.

“Today, there is tremendous ­opportunity to do cannabis research right, to explore the benefits of a ­variety of products,” she says.

After buying out her remaining partner last year, she attracted an investment from CPS Capital, a venture capital firm created by graduates of the Ivey MBA program at Western.

“They helped me to become more efficient. The goal was to sell the ­company,” says Guthrie.

She accepted the Auxly offer in part because the arrangement leaves KGK in London to continue operating as an independent lab. It will continue to conduct tests and trials for the ­nutraceutical industry, but will expand its work in products derived from cannabis.

Until 2012, KGK produced health products as well. Its best-known product was Sytrinol, a supplement derived from compounds in orange and tangerine peels, together with vitamin E, that was marketed to lower cholesterol.

KGK sold its rights to the product in 2012 and shifted entirely to research. Sytrinol is produced and marketed today by Webber Naturals.  Christopher Clark