Next Investors logo grey

CropLogic targets Australian cannabis industry

Published 22-AUG-2019 14:01 P.M.


3 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

CropLogic Ltd (ASX:CLI) has signed a Letter of Intent (LOI) with Boring Seed Company of Oregon USA, an initiative that could see the group establish a hemp trial farm in Australia, similar to the one it is operating in Oregon.

The award-winning global agronomy, farm management and agtech company is well supported in the US, having established itself as a credible authority in relation to agricultural practices across a broad range of crops.

After launching its product into Washington State in 2017, CropLogic is now servicing a significant portion of horticultural growers in this region, with a market share as high as 30% in some crops.

Following significant growth in Washington State and Northern Oregon, CropLogic expanded into the Idaho market.

The company offers growers of irrigated crops digital agricultural technology expertise based upon scientific research and delivered with cutting edge technology – science, agronomy and technology interwoven into an expert system for decision support.

After establishing itself in the broader horticultural sector, CropLogic gained approval to establish a 500 acre hemp trial farm in Oregon where the crop is well advanced.

(Source:           CLI's Oregon hemp farm is progressing well

As well as generating significant revenues from crop sales towards the end of the year, the hemp project has provided CropLogic with a valuable opportunity to showcase its agricultural management systems and expertise.

Given CropLogic’s technology was transferable into other countries and industries outside the group’s markets in Australia, it makes sense to revisit Australia, targeting a country and market it knows well in expanding its presence in the hemp farming industry.

Sowing the seeds

Harking back to the collaboration with Boring Seed, that group has developed the T2 hemp strain being grown on the CropLogic’s Oregon Trial Hemp Farm.

Distribution of this strain and other Boring Hemp genetics will be formalised in an appropriate distribution agreement.

Considering that CBD hemp cultivation has been legal in the state of Oregon since 2015, it is thought that Oregon may have superior CBD producing hemp genetics to other regions, such as Australia and New Zealand, where to date the focus of hemp production has predominately been for fibre and seed for consumption.

Management will investigate the viability of an Australian Hemp Trial Farm with the aim of the trial being to evaluate the effectiveness of CropLogic’s proprietary agronomy, farm management and agtech expertise gained at the company’s Oregon Hemp Trial Farm and also the viability of Oregon hemp genetics in the Australian growing environment.

The investigation will consider a Hemp Trial Farm of up to 100 acres.

Any eventual Australian Hemp Trial Farm and distribution and/or cultivation of Oregon hemp genetics will be subject to satisfactory regulatory approvals and the findings of this investigation.

Commenting on the prospects of such a venture, chief executive James Cooper-Jones said, “We have promising hemp cultivation operations currently underway in Central Oregon, US.”

“Much of this could be attributed to CropLogic’s agronomy, farm management and agtech expertise and perhaps the superior genetics found in Oregon.

‘’As such, CropLogic is now excited to investigate how this proprietary agronomic knowledge and Oregonian genetics may benefit the Australian and New Zealand hemp industry.”

Given CropLogic estimates it could generate approximately $50 million in biomass sales from the Oregon Trial Farm towards the end of this year, should the company embark on a similar strategy in Australia it could be very lucrative.

Consequently, it is a share price catalyst to look out for, particularly given that the company’s current market capitalisation of approximately $26 million fails to reflect the group’s anticipated income in the next six months.

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.