- New-age cultivation company RotoGro has purchased a majority interest in Canadian hemp grower CanniFarms
- RotoGro’s technology allows for more surface area in growing plants and has been frequently used in the hemp industry before today
- RotoGro’s 51 per cent interest in CanniFarms means the company has majority control over a 55,000 square foot hemp facility
- The company spent $110,000 in cash for the purchase, paired with a significant premium of $7.425 million worth of shares
- Shares in RotoGro are trading 9.68 per cent higher today, priced for 17 cents each
Cutting-edge tech cultivation company RotoGro is speedily emerging as the hemp industry’s poster boy.
The company’s patented cylinder-shaped hydroponic garden system helps to make efficient use of garden space.
Today the company has taken hemp growing into its own hands, purchasing 51 per cent interest in Canadian hemp grower Medicinal Compassion CanniFarms.
The purchase marks a unique move by RotoGro, however, until now the company has only leased out or supplied its technology for separate companies looking to boost hemp cultivation.
This purchase is the first time RotoGro has used its technology to lead its very own hemp cultivation. CanniFarms is also in the late stages of applying for its hemp cultivation licence, marking an impending opportunity for RotoGro.
“We are very excited about the prospect of acquiring a majority interest in a late stage Health Canada cannabis cultivation and processing license applicant,” RotoGro CEO Adam Clode said
“The proposed acquisition is inline with the company’s strategy of moving away from capital intensive projects and striving for sustained revenue from establishing cultivation partnerships,” he added.
The majority purchase of CanniFarms was strung together through $110,000 in cash and $7.5 million worth of RotoGro shares. The issued shares were issued at $0.24 each — marking a significant premium from today.
CanniFarms currently boasts an impressive 55,000 square foot facility. The company has been chipping away at the first phase of its cultivation, which is set to utilise roughly 25,000 square feet of product.
However, if CanniFarms fails to secure its hemp cultivation licence, it only nets the cash component of the sale from RotoGro.
“We look forward to CanniFarms near term issue of a Health Canada approved cultivation license and moving the company in to sustained operational revenue capitalising on our patented and proprietary technology providing the lowest cost of production for indoor cannabis cultivation,” Adam Clode concluded.
If everything goes to plan for RotoGro, it hopes to cultivate the first batch of hemp crops in 2020s third quarter.
Shares in RotoGro are trading 9.68 per cent higher today, priced for 17 cents each.