Roto-Gro receives first order from Canniberia LDA, secures foothold in growing Euro market
Food & Agriculture
Food & Agriculture
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Roto-Gro has received the initial purchase order of CAD$1.039 million from Canniberia LDA for the first phase of its Roto-Gro technology orders.
Canniberia is currently building out its facility for the cultivation of medicinal cannabis after receiving pre-approval for its cannabis cultivation licence in Portugal.
The first purchase order for 72 Roto-Gro Garden Systems and a Plant Nutrient Management System is part of the total CAD$1.9 million purchase and sale agreement between the companies which covers a further 72 Rotational Garden Systems.
Roto-Gro International (ASX:RGI) has also agreed to grant Canniberia an extension of the date for the payment of 50% of the first order to December 15, 2021.
The company expects to deliver and install the technology in early Q1 2022.
“Canniberia’s purchase order demonstrates their firm commitment to proceed with Roto-Gro as its cannabis cultivation technology partner,” Roto-Gro CEO Michael Di Tommaso said.
“The Canniberia project is moving along steadily, despite minor COVID-19 related setbacks, and the company looks forward to entering Europe’s lawful cannabis space alongside Canniberia.”
Canniberia CEO Paulo Leandro said the purchase order demonstrated great progress at the project.
“This Purchase Order secures and demonstrates our commitment to Roto-Gro as our exclusive technology partner in the region,” he said.
“We are excited to continue progressing forward with this project and begin operations as soon as reasonably practicable.”
RotoGro believes that Portugal could serve as its strategic entry point to the European lawful cannabis market – as the market is projected to experience significant growth.
Barbara Pastory of Prohibition Partners recently released a research report which highlighted that “although fragmented legislation might somehow be a hindrance to the market reaching its full potential quickly, the gradual legalisation of adult-use cannabis will mark a significant turning point for the industry and opportunities will arise as a result”.
“As highlighted in The European Cannabis Report: 6th Edition, we project those sales of adult-use cannabis will reach €200 million by 2023, coming close to €800 million in 2025.
“To put these figures into context; when cannabis was legalised in Canada, the illicit market for cannabis was worth €800 million.
“It took just two years for the legal adult-use cannabis industry to take away half of the market share.”
The company is looking to create further partnerships to expand throughout Europe as a technology partner for cultivators of lawful cannabis.
It’s a smart business model, with Roto-Gro’s cannabis cultivation technology offering operational advantages to customers as well as generating technology sales and securing recurring revenue through profit-share agreements.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.