If CropLogic’s maths is right, it can increase revenue by 2,991 per cent selling hemp
Food & Agriculture
Food & Agriculture
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CropLogic (ASX:CLI), which provides technology able to help increase yields of a range of agricultural products, reckons it could reap as much as $64 million in revenue selling hemp products.
The company told investors this morning that it had selected three different hemp seed varieties at its trial hemp farm in Oregon, and is now beginning to plant them ahead of growing season.
CropLogic has spent the past six months dipping its toes into the world of cannabis. It sought advice from American cannabis groups in November on whether it could make some money dabbling in hemp and by March had received approval to grow the stuff as well as signed a lease for a trial farm in the US state that has grown so much weed it doesn’t know what to do with it all.
Industrial hemp contains low levels of tetrahydrocannabinol (THC), the psychoactive element of cannabis and slightly higher levels of cannabidiol (CDB). It was legalised in mid-December when the US government passed the 2018 Farm Bill.
James Cooper-Jones, CropLogic chief, told Stockhead the company is hoping to yield between 800,000 and 1.1 million pounds of hemp by the end of harvest in October, which it says could result in significant riches.
“Hemp biomass is graded by contained CBD percentage point. Accordingly, the industry standard is buyers of hemp biomass will pay a dollar amount per CBD percentage point,” the company explained in its announcement.
If CropLogic can yield at least 10 per cent CBD — and it says the three strains it will test in the coming months are all capable of producing more than that — then sales could hit as much as $64 million, based on an estimated hemp price of US$4 per percentage point of CBD content and a 1.1 million pound yield.
Compared with revenue in the 2018 financial year, that would be a 2,991 per cent improvement, if everything goes right.
The next steps are planting the seeds, growing them, watching them flower, getting them compliance tested and then harvesting and selling them.
Jason Peterson, “hemp specialist” at CropLogic’s subsidiary LogicalCropping, said he was very hopeful of it working.
“Central Oregon’s climate, soil types and clean environment presents an ideal growing environment to produce premium high quality CBD producing hemp biomass,” he said.
“We have selected genetics that are designed to capitalise on this growing environment. Coupled with CropLogic’s agronomy and agtech expertise, to optimise our biomass production and grade this year.”
CLI shares got a 9 per cent boost to a high of 3.8c.
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