CropLogic to trial farm industrial hemp in Oregon, eyes US$22B market
Published 06-FEB-2019 10:20 A.M.
|
4 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Ag-tech junior, CropLogic (ASX:CLI), is pursuing trial farming in Oregon, US, following its investigation into the state’s industrial hemp market.
The move will demonstrate CropLogic’s ability to vertically integrate its agronomy expertise, digital ag-tech, extensive knowledge of the local growing conditions, as well as its foothold in the Pacific North West region.
CLI is an award-winning, New Zealand-born company which offers farmers and growers of irrigated crops the latest in science, agronomy and technology through its CropLogic realTime software. After launching its product into Washington State in 2017, CropLogic is currently servicing a significant portion of horticultural growers in that region, with a market share as high as 30% in some crops.
The company is now working towards land procurement and processing arrangements in Oregon, with the trial expected to begin in the 2019 Northern Hemisphere growing season. The first crop to be trial farmed will be industrial hemp.
Through the vertical integration of its core business, CropLogic will utilise its local agronomists’ regional knowledge and experience to source 100-150 acres of land for potential lease or purchase, which will be used for the industrial hemp trial farm. The crop will be farmed using CLI’s probes and aerial imagery to grow the hemp biomass, which will then be used to produce cannabidiol (CBD).
To advance this process, CLI has signed a non-binding letter of intent with Nextleaf Solutions — a Canadian-based cannabis processing tech company — for a potential offtake and collaboration arrangement.
This collaboration supports CropLogic’s historical partnership model, with the company previously announcing partnerships with The New Zealand Institute of Plant and Food Research, an internationally recognised Crown Research Institute, Mildura Regional Development, and the Victorian Government.
Under the proposed arrangements, CropLogic would use its vertically integrated business model, including agronomy expertise and experience servicing similar crops such as hops, aerial imagery and digital ag tech, to farm approximately 100 to 150 acres of industrial hemp. Nextleaf, meanwhile, would provide knowledge and experience to advise on suggested hemp varieties and processing.
CropLogic expects to enter into binding arrangements with Nextleaf in the coming weeks. In conjunction with this, it will begin its search for land on which to conduct the trial farming.
Recent CBD and cannabis market insights by the Brightfield Group estimate that the industrial hemp market in the US could reach US$22 billion by 2022.
Industrial hemp contains low levels of THC (tetrahydrocannabinol) and slightly higher levels of CBD.
According to a report by Grand View Research, the hemp market is driven by increasing consumer demand for high-quality cosmetics, personal care products, protein supplements, and other health food products that include hemp extracts such as CBD.
In December last year, the US government passed the signed the 2018 farm bill, removing hemp and any hemp derivative from the Controlled Substances Act so that it can be regulated as an agricultural crop — a pivotal step for hemp growers and hemp CBD companies. This, in turn, has sizeable implications for the burgeoning CBD industry and, more broadly, the increasingly mainstream legalised pot movement itself.
CropLogic CEO, James Cooper-Jones, said of today's announcement: “This is an important milestone for CropLogic as it pursues its strategy of vertical integration, as it allows us to demonstrate the ability to produce crops using our agronomic experience, local knowledge, and our technology.
“Nextleaf has experience in hemp varieties from a consumer/processing perspective and CropLogic is keen to work with Nextleaf in order to understand how best to select appropriate genetics and grade.
“The emerging hemp market in North America provides CropLogic the opportunity to demonstrate how it and its technology may be able to service this market,” Cooper-Jones added.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
