Former secretary of the Interior James G. Watt's first venture into private enterprise since leaving office might make some people think he's turned over a new leaf.

Watt is chairman of Environmental Diagnostics Inc., a young California-based biotechnology company whose first product would enable marijuana users to test their stash for traces of Paraquat, the deadly herbicide sprayed over marijuana fields in Mexico and the federal lands over which he used to preside.

Watt was quick to point out this week that Environmental Diagnostics's Paraquat Quik Screen was "not developed for a market" but rather to prove the effectiveness of the company's biotechnology. "It's one of the toughest herbicides to test for," said Watt.

He said he also received assurances from Carlton Turner, the White House adviser on drug abuse, that any mass market for such a Paraquat test had shriveled since a federal court ordered the Drug Enforcement Agency to stop spraying the herbicide on federal grounds.

There had been concerns that smokers inhaling Paraquat-tainted marijuana could suffer severe lung and brain damage.

But this seemingly incongruous blend of James Watt, Paraquat and biotechnology illustrates the classic story of how a well-wired Washington connection can boost the fortunes of a small and virtually unknown company.

The often controversial Watt, who resigned his Cabinet position last year after making comments widely viewed as ethnic slurs, has been a key to the recent successes of Environmental Diagnostics since becoming its chairman in April.

"I think he's the best thing that's happened to this company," said Arden A. Kelton, Environmental Diagnostics's president. "We were fighting an uphill battle in funding and marketing until he came aboard. He's a very intelligent person who cuts right to the heart of a problem."

Environmental Diagnostics is trying to scratch out an unusual niche in the fast-growing biotechnology industry. Unlike better-known biotechnology companies such as Genentech and Hybritech, which use genetic engineering techniques for medical diagnostic purposes, Environmental Diagnostics, as its name implies, wants to apply those techniques to environmental concerns.

The company is developing what it says are "easy-to-use and inexpensive testing kits" to detect a variety of herbicides and pesticides and other chemicals used in agricultural and industrial applications. In the past, such tests could be done only at significant cost in clinical laboratories. With the new biotechnologies, the company thinks its products can compete with those laboratories.

To finance its research, development and marketing efforts, Environmental Diagnostics made a $2.4 million public stock offering in late July.

However, biotechnology analysts point out that the stock market has been very hard on existing public biotechnology stocks and that the initial public offering market for new issues has been especially tight.

Despite this, the company sold out its entire offering at close to full value. Arden and Stuart James, the Denver-based investment banking firm that underwrote the offering, credits Watt's salesmanship as vital to the success of the offering. "It was fabulous," said Watt, who receives $50,000 a year in salary and half a million shares for giving the firm 10 percent of his time, according to the prospectus.

But Watt also has been been instrumental in helping Environmental Diagnostics target the federal government market.

"He's introduced me to various government groups," Kelton said, including representatives of the Department of Agriculture and the Food and Drug Administration. Kelton said that Environmental Diagnostics even has talked with the Pentagon about developing products to detect biological warfare toxins.

"He was brought on board for his marketing ability, but we didn't know he was going to be such a strong advocate for the company," Kelton said.

Watt was introduced to Environmental Diagnostics as a result of a cold call last fall from Stuart James Co.

Environmental Diagnostics is still in the Security and Exchange Commission's quiet period and is not allowed to discuss either new products or speculate about future revenues. Both Watt and Kelton, though, are very optimistic about the company's prospects.

In fact, Watt is so high on his new company that he said, "I'll probably spend a lot more than 10 percent of my time on them."

Some analysts believe Watt and his connections may indeed be the edge that the company needs in the very competitive biotechnology marketplace.

"It will be a real marketing challenge to prove the benefit of a diagnostic along the standard agricultural chain at this point," said Nina M. Siegler, an independent biotechnology analyst. "There's no real mass market for low-cost diagnostics like these. I think what they'll have to do to make a success out of it is to link up with the government."