Roto-Gro to provide cannabis growing management services in addition to patented hydroponic system

Roto-Gro ASX RGI cannabis hydroponic system
Roto-Gro's model 420 cannabis growing machine.

Cannabis-tech company Roto-Gro International (ASX: RGI) has launched its growing management services to assist customers with licence development, design, construction, growing management and harvest of licenced cannabis crops in the United States.

Roto-Gro anticipates this service will provide a second major revenue stream and offer higher sales of its patented automated and rotational hydroponic systems, including its growing management software.

According to Roto-Gro the hydroponic system and its software are patented until 2023, offering unrivalled exposure to licenced cannabis growers in the US.

Roto-Gro’s automated rotary hydroponic systems can grow up to 420 cannabis plants without soil. It received an initial purchase order from Amfil Technologies for 100 systems during the September quarter last year.

Additionally, during the September quarter, Roto-Gro inked a five-year lease for showroom and manufacturing facility which the company claims will comprise a state-of-the-art grow room and data centre.

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

“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,” Mr Carlie said.

He added the new service offering would enable the company to generate “significant” annual revenues in addition to those its hydroponics and software systems sales.

Cannabis has been legalised across 30 US states, with others working on legalising the plant.

“Revenues from the lawful sales of cannabis in North America are projected to be A$14 billion in 2018 – the greatest globally,” Mr Carli said.

Roto-Gro anticipates legal cannabis sales will be more than A$20 billion by 2021. Meanwhile, as Canada legalises recreation use mid-year, cannabis sales in the region are expected to reach A$7 billion by 2021.

Shares in Roto-Gro rose almost 5% by mid-day to sit at A$0.65.

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