Special Report: Australian ag-tech RotoGro International is poised to capitalise on Canada’s critical cannabis supply shortage, following news its cannabis license is now allowed to be used under the country’s new Cannabis Act.

RotoGro (ASX:RGI) holds a Dealers’ licence in Canada via Supra THC Services, a company it bought from Valens GroWorks, that was issued under an older law.

In order for RotoGro to establish its own facility and grow its Canadian operations, this license had to be converted for use under the newly adopted Cannabis Act, which legalised recreational marijuana in Canada and generally formalised the laws around the substance.

RotoGro’s licence now allows Supra THC to conduct processing, testing, research, production, sales and distribution of cannabis.

They’re applying for an amendment to add cultivation from the proposed 44,000 square foot cultivation facility in Ontario.

Grow more, use less water

The company is uniquely positioned in the $4.34bn Canadian cannabis market with its patented RotoGro Hydroponic Garden system, supported by its iGrow automated software.

Together, these consistently yield 400 per cent more product per rotational garden, per square metre than traditional growing methods.

The design allowing two or three rotational gardens to be stacked increases that yield by 800 per cent and 1200 per square metre respectively.

RotoGro cultivating lawful cannabis with its unique rotational garden system (Supplied)

This places RotoGro in the lowest quartile of production costs for the cultivation of lawful cannabis.

“Our system uses 60 per cent less power and 90 per cent less water than conventional indoor farming systems, which further adds to the value proposition especially in areas of global food shortages and harsh climatic conditions not suited for agriculture crops,” said RotoGro’s Adam Clode.

Taking advantage of the shortages

Since becoming the second country in the world to legalise recreational marijuana use in October 2018, Canada has experienced a shortage of retail cannabis due to factors such as delays in the processing and approval of licences by Health Canada.

Mr Clode said that while the licence acquisition is a significant development for the company, RotoGro’s competitive advantage is the market-leading yield advantages of the RotoGro Hydroponic.

“The results of substantial testing have proven to be extremely promising with each four-foot RotoGro Hydroponic Garden consistently yielding 3-4kg of product per sixty-day cycle,” said Mr Clode.

“This is significant when compared to third party independent studies that have shown the comparative yield of a traditional indoor ‘flat deck system’ occupying the same footprint of three-square metres is on average 1.3kg per harvest.”

The company expects to produce between 10 to 15,000 kilograms per annum at its planned 4,500 square metre facility.

But the benefits of the system have RotoGro looking further afield.

Mr Clode says RotoGro is already pursuing major opportunities in the fresh produce sector, both in Australia and abroad.

“While Canada is a great first step, we have a unique opportunity more broadly. We’re a global company who can yield consistent organic product year-round, unrestricted by seasonal elements that affect traditional farming.”

This story was developed in collaboration with RotoGro International, a Stockhead advertiser at the time of publishing.
This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.
 

Featured Companies

You might be interested in