Rotary hydroponics manufacturer Roto-Gro International has expanded into cannabis crop-growing services for licensed marijuana farmers.

Australian-based Roto-Gro, which builds stackable hyroponics garden systems, plans to offer marijuana growing services ranging from design, planting, nutrient feeding and lighting to harvest.

“The significant space, cost and yield advantages of the Roto-Gro system consistently provide the lowest cannabis cost per gram in the market,” the company says.

Roto-Gro — like other other ASX-listed pot stocks — hopes to take advantage of legislative changes in Canada and parts of the US, which are allowing wider use of medical and recreational marijuana.

Roto-Gro expects legal cannabis sales in the US to double from $10 billion last year to more than $20 billion by 2021.

“Canada will legalise the recreational use of cannabis for adults in 2018 with projected annual Canadian sales to reach $7 billion by 2021,” the company says, citing Deloitte.

Investors seem convinced.

Roto-Gro (ASX:RGI) shares closed at near-record levels Monday, up 7 per cent at 66.5c, valuing the company at about $16 million.

RGI share pice movements over the past six months. Source:
Roto-gro shares over the past six months. Source:

Roto-Gro’s patented Model 420 system is a hydroponic vertical growing system where seedlings rotate in a wheel around a central lamp to optimise electricity, water, food and floor space.

Model 420 boasts up to 10 times the production of traditional flatbed growing in the same amount of floor area, using 40 per cent less electricity.

Trays are motorised, and revolve 24 hours a day with automated monitoring and feed systems to minimise the labour input.

The news comes after the company fielded enquiries from publicly-listed, licensed cultivators.

“We are very pleased with the interest for our growing management services and the potential for direct investment into cannabis licences,”managing director Michael Carli told investors.

“Our proprietary and patented technology combined with our growing management expertise (providing the lowest cannabis cost per gram), solidifies our competitive advantage and significantly de-risks our global entry into the growing management space.”

The stock has more than doubled in the past month, from lows of 32c in December to as much as 67c in intra-day trade on Monday.

In the last quarter Roto-Gro sold 100 of units to Amfil Technologies in a collaborative partnership with their own antimicrobial system.

Their October quarterly detailed $104,000 in sales with $1.6 million left in the bank at the end of the period.