Roots looks to expand its North American cannabis sector presence
Roots Sustainable Agricultural Technologies Limited (ASX:ROO) this morning announced plans to further expand into the North America cannabis and agriculture sectors. The company is seeking to take advantage of sales momentum along with local operating costs and environmental pressures.
Since March, Roots has executed on strategic milestones for the North American cannabis sector with Root Zone Temperature Optimisation (RZTO) sales to four commercial organic growers and processors and is now “looking at other acquisitions in the cannabis space that could add value to the existing business”.
Roots’ RZTO technology optimises plant physiology for increased growth, productivity and quality by stabilising the plant’s root zone temperature.
As a result of this initial success, Roots is now recruiting a US-based senior management and operational team to handle increased demand from customers and to manage future RZTO installations.
Roots CEO, Dr Sharon Devir said “With commodity pricing pressures due to competition, and more innovative growing methods being implemented on a wider scale, we are fielding an increased number of queries for our RZTO heating and cooling technology from growers throughout these sectors. Building a team in North America will allow us to more efficiently support customers and harness this momentum.
“We entered the North American market after a successful technology showcase to key producers in California, Colorado and Canada who expressed interest in deploying RZTO technology to improve yields. Since then, the commonality of extreme weather conditions is making it difficult for farmers to produce high quality produce regularly. Our RZTO heating and cooling technology is helping farmers mitigate the risks of extreme temperatures and is proving critical for high worth agricultural crops.
“Growers are experiencing market pressures due to prices dropping so they are increasingly looking to adopt cost effective technologies to improve operational efficiencies. Our Roots RZTO system is the only known and successfully tested open field root zone heating and cooling technology, which caters to the trend away from traditional greenhouse and indoor facilities towards lower Capex and Opex growing methods such as open field cultivation.
“The California and Colorado cannabis sectors alone represented US$4.08 billion in sales in 2018. However, this sector is expected to undergo prodigious growth over the next four years with the total North American cannabis market is expected to reach US$35 billion by 20232. Servicing this expected growth in North American RZTO sales to take advantage of these tipping points in the local industry is only possible if we tool up our local on-the-ground presence in the United States and Canada.”