SEARCHING FOR A POT OF GOLD ON PRAIRIES

Saskatoon's Status Grows As Studies Span The World Of Science From
Agricultural Biotechnology To A Giant Microscope Centre

SASKATOON - When Brent Zettl finished his science studies at the
University of Saskatchewan a dozen years ago, he found most of his
classmates leaving town.

"They all left, after they graduated or a year after they graduated,
simply because there wasn't work," Mr. Zettl recalls. "There was lots
of pull, lots of companies offering lots more money because there was
a demand for their expertise."

Some of those friends no doubt felt a little sorry for Mr. Zettl,
thinking his knowledge of agricultural science might well go
unrewarded while they won wealth and recognition elsewhere.

Today they probably wouldn't be surprised to hear that Brent Zettl's
scientific skills have indeed gone to pot -- though it's not in the
way they imagined.

Mr. Zettl plans to grow marijuana at the bottom of an abandoned mine
shaft in neighbouring Manitoba. There's nothing illicit about the
project. Instead, it's the latest and biggest step in the growth of a
biotechnology company the 39-year-old entrepreneur launched as an
alternative to joining the brains exodus from Saskatchewan.

Prairie Plant Systems Inc. made its first profit two years ago, and
has been on a high since December, when it beat 195 rivals to win a
$5.8-million contract to grow medicinal-grade marijuana for the
federal government. Canada's first legal drug lord will produce pot in
an underground cavern 360 metres below the surface of a lake near Flin
Flon, Man., where miners once toiled to extract copper and zinc.

Prairie Plant is one of the shining examples of how Saskatoon has
reversed the traditional pattern of training scientists only to have
them leave town and has built itself into one of the world's largest
centres for plant biotechnology.

The city boasts 1,000 scientists and 1,500 related professionals
working for research organizations, academic institutions, startup
companies and units of multi-national corporations.

Saskatoon, a community of 210,000 in Western Canada's agricultural
hinterland, will receive further validation as a major international
science centre with the startup of the Canadian Light Source, the
national syncrotron facility, a giant microscope complex the size of a
stadium that's expected to draw hundreds of scientists from all
disciplines when completed in 2004. Now under construction, the
syncrotron is Canada's biggest science project in 30 years.

"We are fighting back on the brain drain here to lead to a net brain
gain," says Dale Botting, chief executive of the Saskatoon Regional
Economic Development Authority. City promoters are so proud of their
brains they're calling Saskatoon "Canada's most dynamic science city."

The growth of the city's scientific community is fuelling a
development boom. The value of industrial permits increased 56% last
year, the second-largest increase in Western Canada after Calgary,
according to civic officials. And while the rest of Saskatchewan
struggles to keep people from moving away, the population of Saskatoon
is growing at about 2% to 3% a year, making it one of only three
Prairie cities, along with Calgary and Edmonton, with a net population
gain. With sales of about $200-million, the biotech cluster represents
10% to 15% of the city's economy, whose other major industries are
mining, manufacturing and food processing.

A survey of 835 companies in the Saskatoon region found a high level
of optimism about future growth in all sectors, but biotechnology was
the most optimistic, with 100% of respondents rating their future
prospects excellent and 44.4% planning to expand.

"People who could get a job anywhere are coming here. This is the
place to be," says Derek Lydiate, a scientist of international
standing who moved to Saskatoon three years ago from Britain to head
the molecular genetics section of Agriculture and Agri-Food Canada.

Saskatoon's drive to build a new economy, spin a new image and stem
the exodus of youth is not without challenges. Despite the big-time
international reputation, even local residents joke Saskatoon is the
city everyone flies over on their way to Calgary or Vancouver.

"Our problem is being close to Alberta," says Branko Peterman, chief
executive of University of Saskatchewan Technologies Inc., noting it
is difficult for Alberta's less-populous, economically weaker
neighbour to come out from under Alberta's shadow and measure up.

A recent poll for the Canada West Foundation found 40% of Saskatchewan
residents aged 18 to 24 think they will move out of the province in
the next five years, compared with 11.5% for their counterparts in
Alberta.

The University of Sask-atchewan's College of Commerce offers a sad
reminder of Saskatoon's losses in a plaque listing its major donors. A
lecture hall is named after Murray Edwards, who moved from Saskatoon
to become the Canadian energy sector's most successful entrepreneur.
Harold Milavsky, a business leader in Calgary, moved away to help
build Trizec Corp., the former commercial real estate giant. Nexen
Inc., a Calgary-based international oil company, was headed by Vic
Zaleschuk, also educated here.

Saskatoon's beginnings as a science city have deep roots, starting
with a political decision early in the last century. Prince Albert,
which was a larger centre at the time, was given the choice of being
home to a correctional centre or a university. When Prince Albert
picked the jail because it meant immediate construction and economic
spinoffs, Saskatoon landed the university by default.

Prince Albert's gains were short-lived, however, and the city
eventually stagnated. But Saskatoon's university became its
powerhouse, fuelled steady population growth and remains its largest
employer.

Scientific research bloomed during the Second World War. One big
mandate was to develop a variety of the oilseed plant rape that could
be grown in the Prairies. The rape oil was urgently needed as a
lubricant for steam engines in ships and trains, after traditional
supplies from Asia and Europe dried up because of the war, says
scientist Keith Downey, who worked on rapeseed development and now
heads a consulting firm in Saskatoon called Canoglobe Consulting Inc.

Wartime governments were also looking for new crops to diversify
Western Canada's economy and reduce its dependence on wheat.

The research efforts were successful and resulted in quick acceptance
of rapeseed by Prairie farmers. But demand waned as steam engines gave
way to diesels, and Saskatoon's researchers went back to their labs to
find ways to modify the seed so it could be produced as edible oil.

The fruit of that initiative, in which Mr. Downey played a leading
role, was canola (a word made up from Canada and oil). This type of
rapeseed, developed in Saskatoon in 1974, yields what is billed as the
world's healthiest oil, a product that dominates Canada's
salad-dressing market. Next to wheat, canola is Canada's major crop.

Private companies kept at the research, and by 1995 canola became the
first genetically modified food crop in the world to be extensively
commercialized. While efforts to improve canola continue, new plant
technologies have increasingly found other applications.

For example, Saskatoon researchers are working on crops such as
pulses, herbal plants and nutriceuticals such as echinacea (a remedy
for colds) and St. John's wort (taken for depression) for which there
is rising consumer demand. Some work is focused on reducing the use of
chemicals, such as techniques for biological control of insect pests
developed by George Khachatourians, a professor at the U of S.

"We see in the next 20 years a convergence of many technologies," says
Wilfred Keller, research director at the National Research Council's
Plant Biotechnology Institute.

"Our mindset in the last 20 years has focused on improving plants for
food and feed, but in the future we will see growth in human health.
Many medicines come from plants because of growing interest in using
natural products, such as [in efforts] to retard the onset of cancer."

There is also increasing interest in growing plants for industrial
uses, such as producing energy to replace depleting hydrocarbons, or
to clean up environmentally contaminated sites.

Mr. Downey said scarce resources resulted in an unusual level of
co-operation among the university, Agriculture Canada and the National
Research Council, as well as many companies, making the Saskatoon
cluster unique and a case study for other communities looking to
diversify their economies.

Saskatoon has attracted some major corporate players in scientific
research, including units of international companies such as Aventis
CropScience Canada Co., Dow AgroSciences Canada Inc. and Monsanto
Canada Inc. But one of the weaknesses of the city's biotech cluster is
its heavy dependence on public sources of funding.

Venture capital is limited, and the stock market has been largely out
of reach. One of the reasons is the long time it takes to
commercialize biotechnology innovations because of the high level of
regulation, resulting in fewer entrepreneurs, said Peter Phillips, a
professor of agricultural economics at the U of S.

Prairie Plant, a private company with 30 shareholders and one of the
cluster's few homegrown success stories, started as a provider of
crops using new biotechnologies and aiming to capitalize on farmers'
continuing drive to diversify.

Its first crops included seed potatoes, nutraceuticals and Saskatoon
berries (known elsewhere as service berries). With 32 employees, the
company is forecasting revenue of $1.5-million this year.

Marijuana is its latest line. Under the contract with Health Canada,
the firm will start growing pot next month, aiming for 185 kilograms
of dry product this year, and 400 kilograms for each of the remaining
four years of the deal. The firm will also process and roll the crop
into more than a million cigarettes.

The marijuana will be used for clinical trials to determine whether it
is both medically effective and safe for people suffering from
diseases such as AIDS or cancer to smoke.

Mr. Zettl said the mine technology he helped pioneer has many
advantages. The setting provides a steady environment that ensures a
more productive cycle. And the mine shaft is perfect for security
against escape of plant material or intrusion by uninvited humans,
because there's only one way in and one way out.

"This is really cutting edge in terms of ... biopharmaceutical
production," Mr. Zettl said.

After building a 12,000-square-foot growing chamber, the firm is
searching for marijuana from legal sources, which has not been easy.

"If we could go on the Internet and pull it off there it would be a
slam dunk, but we are not allowed to do that," said Mr. Zettl, who
hopes to find seed material in gene banks around the world. "We are on
a mission to find the best of the best."

He says he has yet to see a live marijuana plant, but his friends have
joked endlessly about his line of work, particularly since he won the
pot contract. They ask him if he's high on life, or inquire about his
joint venture with the company that owns the mine.

Like Saskatoon's biotech cluster, he's working hard to have the last
laugh. "Beyond this contract, we see the other biopharmaceuticals we
are going to do, like cancer drugs, Alzheimer drugs. We are paving the
way to the future. I am looking forward to the next 20 years -- I
think it's going to be a whole lot easier."