Roots Sustainable Agricultural Technologies Limited (ASX: ROO) has secured a Non-binding Letter of Intent (LOI) with existing partner, smart technology provider, Humboldt CCTV.
The companies will work to integrate the ROO proprietary Root Zone Temperature Optimisation (RZTO) technology and revolutionary heat exchange stub product into Humboldt’s Smart Agriculture solution.
Both parties will also progress an initial deployment to test the integrated solution with a leading cannabis grower in the 45 days from signing the LOI.
Humboldt is an established family-owned business that specialise in smart agricultural technology and wireless connectivity solutions for farmers, with particular focus in the cannabis sector. The group has a longstanding and established customer base, as well as a team of engineers and sales representatives covering the Californian market.
The development follows an initial non-binding LOI with Humboldt to market, sell and distribute root zone heat exchange kits in Northern California. Under the new agreement, both parties will collaborate to integrate Roots’ solutions into Humboldt’s SmartAg technology.
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.
As part of the agreement, Roots will invest USD$100,000 in Humboldt CCTV in return for 10% of its holdings. The invested proceeds will be devoted to marketing and sale initiatives in the CA USA Cannabis sector. ROOTS and Humboldt will also progress the first deployment of the Company’s heat exchange stub, managed and controlled by Humboldt’s SmartAg offering at a large cannabis
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.
California represents a large market opportunity for Roots. California is the top agricultural producing state in the USA and contributed US$50Bn in revenue for output in 2018i. It has over 69,000 individual farms and ranches and contributes ~40% of all organic product in the USii.
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.”
