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Roots widens cannabis footprint in California


Published 11-DEC-2020 11:07 A.M.


3 minute read

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Roots Sustainable Agricultural Technologies Limited (ASX:ROO) has secured a Non-binding Letter of Intent (LOI) with smart technology provider, Humboldt CCTV to integrate its proprietary Root Zone Temperature Optimisation (RZTO) technology and revolutionary heat exchange stub product into Humboldt’s Smart Agriculture solution.

Humboldt CCTV is an existing partner and established family owned business that specialise in smart agricultural technology and wireless connectivity solutions for farmers, with particular focus in the cannabis sector.

The companies have a history of working with each other, having signed an LOI back in September for Humboldt to sell and distribute root zone heat exchange device kits in Northern California.

Humboldt’s customer base is well established in California and its team of engineers and sales professionals are well versed in servicing the Californian cannabis market.

The California market represents a large market opportunity for Roots, being the top agricultural producing state in the USA. In 2018 alone, California contributed US$50BN in revenue for agricultural output.

The US state has over 69,000 individual farms and ranches and contributes ~40% of all organic product in the US.

The latest LOI will see Creso and Humboldt progress an initial deployment to test the integrated solution with a leading cannabis grower in the 45 days from signing the LOI.

SmartAg tech complements Roots RZTO

Humboldt’s SmartAg solution allows growers to wirelessly monitor soil moisture, crop temperature, weather, weather station data and environmental conditions at a grow site. The solution comprises of a portfolio of sensors and Humboldt’s secure wireless networks to enable real-time access to information and equipment deployed across remote locations.

It is the perfect foil for the RZTO technology which optimises plant physiology for increased growth, productivity and quality by stabilising the plant’s root zone temperature.

Roots will invest US$100,000 in Humboldt CCTV in return for 10% of its holdings, with invested proceeds to be devoted to marketing and sale initiatives in the Californian USA Cannabis sector.

First deployment of Root’s heat exchange stub, managed and controlled by Humboldt’s SmartAg is bei g offered at a large cannabis 2 cultivation facility located in Northern California.

The trial will be used to progress business development initiatives with other growers and potential customers across Northern California.

Roots has had considerable success in California, successfully progressing the installation of four RZTO systems in various weather conditions and over different structure types.

Each of these provided higher yields, shortened growing cycles and production security.

Roots Executive Chairman and CEO, Boaz Wachtel said, “The extension of our agreement with Humboldt coincides with major regulatory shifts in the cannabis sector, leaving Roots very well placed to capitalise on a number of near term opportunities.

“We are very confident that our new, integrated smart solution will be well received by cannabis growers in Northern California, as it will allow cultivators to remotely manage many labour intensive aspects of the growing process.

“The US is a key market for Roots and having an established and reputable partner line Humboldt will allow to us to build our international footprint further and deliver another competitive advantage at a time of restricted travels. We look forward to updating shareholders on further progress in the near term.”

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