Special Report: Roots Sustainable Agricultural Technologies (ASX:ROO) has made further inroads into America’s biggest cannabis-cultivating region, expanding its partnership with California-based smart technology provider Humboldt CCTV.

Humboldt has agreed to integrate Roots’ proprietary Root Zone Temperature Optimisation technology into Humboldt’s smart agriculture solution, Roots says.

The Root Zone Temperature Optimisation (RTZO) system uses underground pipes to stabilise plants root zone temperate and increase yields. Water flowing through the lower pipes is charged with a soil’s stable temperature, which is then exchanged with upper temperature to mitigate extreme heat and cold stress while significantly reducing energy consumption.

Yesterday, Roots announced it had received commitments to raise $3.955 million via a private placement.

The placement price of 0.022c represented a 22.9% discount to the 5-day weighted volume average, and the money raised would go toward “opportunities in the cannabis sector” and deploying the RZTO tech in multiple agriculture markets around the world such as Humboldt’s.

Humboldt, an established family business that focuses on the cannabis sector, has agreed to integrate this technology into its SmartAg product that allows growers to wirelessly monitor soil moisture, crop temperature, weather station data and environmental conditions at a grow site.

The solution consists of a portfolio of sensors and wireless data to enable real-time access to information and equipment across remote locations.

The two companies will first deploy this heat exchange stub at a large cannabis cultivation facility in Northern California.

The trial will then be used to progress business development initiatives with other growers in the region, famed as one of the best for growing cannabis in the world.

California is the top agricultural producing state in the USA, contributing $US50 billion ($67 billion) in output in 2018.

The “Emerald Triangle” at the top of the state – consisting of Humboldt, Mendocino and Trinity counties – has been dubbed a “stoner’s paradise” where weed can grow as big as trees and where cannabis cultivation is a way of life.

Roots has installed four of its root zone temperature optimisation systems in the state, creating higher yields, shortening growing cycles and securing production.

Roots executive chairman and chief executive Boaz Wachtel says the agreement leaves the company “very well-placed to capitalise on a number of near-term opportunities”.

“We are very confident that our new, integrated smart solution will be well received by cannabis growers in Northern California, as it will allow cultivators to remotely manage many labour-intensive aspects of the growing process.

“The US is a key market for Roots, and having an established and reputable partner like Humboldt will allow us to build our international footprint further and deliver another competitive advantage at a time of restricted travels.

“We look forward to updating shareholders on further progress in the near term.”

This article was developed in collaboration with Roots Sustainable Agricultural Technologies, a Stockhead advertiser at the time of publishing.  

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.