ASX AgTech junior making inroads in North American cannabis sector
This year has been a “record breaking year” for the AgTech industry that’s seen US$16.9 billion in funding spread across 1450 investments. According to a recent Forbes article, most of these investments are located in the US — California specifically, with $5 billion worth of deals.
As for Australia, Finistere Ventures, an agtech-focused venture firm, says that, “Australian agriculture is expected to make further inroads into export markets around the world and become a A$100 billion industry by 2030 — matching the country’s mining and construction sectors — but these ambitions cannot be met without further AgTech investment”.
That view is supported by local agribusiness leaders who predict that demand for agricultural technology will explode in coming years, and start-ups should work more closely with wealthy and intelligent farmers for ideas and funding.
Western Australian Department of Primary Industries and Regional Development executive director Liam O’Connell says the AgTech sector is “set for massive growth because it could help farmers solve basic problems around reducing costs, inefficiency, improving profitability and reducing impact on the environment”.
Roots secures further North American sale
One ASX AgTech junior is making inroads to the North American cannabis sector.
Roots Sustainable Agricultural Technologies Limited (ASX:ROO) today announced that it has made another sale of its Root Zone Temperature Optimisation (RZTO) heating and cooling system in California.
The sale was made to large organic cannabis producer, Private Reserve Originals (PRO), which owns a 300-acre certified organic farm in Santa Barbara County in southern California where it grows crops in open-fields and hoop houses.
The sale will involve the installation of Roots’ proprietary RZTO cooling and heating technology in growbags and pots within hoop houses of varying sizes. The sale also includes ROO’s monitoring and control system, with costs for this service charged on a monthly basis.
Valued at US$30,000 (A$43,450), the sale is an initial paid commercial demonstration. While this is just a small sale in dollar terms, it has the potential to lead to a much larger installation in the future. This was recognised by the market this morning with the share price gaining 34%.
The latest RZTO sale represents Roots’ fourth in North America since March, further validating the company’s strategic focus on this region, capitalising on the growing recreational and medicinal cannabis market and the trend for outdoor and hoop house crop cultivation.
Roots’ two-in-one Root Zone Temperature Optimisation (RZTO) heating and cooling technology optimises plant physiology for increased growth, productivity and quality by stabilising the plant’s root zone temperature.
The result significantly increased yields, increased growing cycle planting options and improved quality. It also mitigates against extreme heat and cold stress, while energy consumption is significantly reduced by stabilising and optimising the root’s zone temperature. For farmers, this means they can sell their crop at a premium.
Roots CEO, Dr Sharon Devir said, “Roots continues to focus on increasing sales activity in North America, capitalising on the trend for outdoor and hoop house crop cultivation.
“PRO will initially use Roots’ patented root zone technology to cool plant roots during the American summer, minimising the impact of external weather conditions and overnight temperature drops to increase crop quality and yield. During autumn and winter, Roots’ RZTO heating technology will be used to stabilise crops at optimal temperatures. This initial paid commercial demonstration has the potential to lead to a much larger installation in the future.”