RotoGro World Wide (Canada) Inc, a wholly-owned subsidiary of Australian agricultural company RotoGro International (ASX: RGI), will supply cannabis company Canniberia LDS with growing systems for its new Portugal-based cultivation facility.
Canniberia is currently in the process of entering Portugal’s medical cannabis market. Portugal legalised medical cannabis in 2018 and allows licensed companies to produce medical cannabis. Canniberia has received pre-approval for its facility’s cultivation license.
The new facility will use RotoGro’s Rotational Gardening Systems. These systems are exactly what their name suggests — large hamster-wheel like devices that spin crops in a circle around a grow light. Rotational crop systems increase farming efficiency, as farmers can stack the devices on top of each other to grow more plants in less space.
According to an announcement from RotoGro, Cannberia has handed them a purchase order for 72 of these devices, plus a Plant Nutrient Management System. The purchase order results from a prior sale agreement that will see Canniberia purchasing a total of 144 rotational gardening systems and the plant nutrient system for $CAD1.904 million (roughly $AUD2.08 million).
Though COVID-19 has delayed the sale agreement, the initial purchase order “demonstrates (Canniberia)’s firm commitment to proceed”, says RotoGro’s CEO Michael Di Tommaso.
The Canniberia project is moving along steadily, despite minor COVID-19 related setbacks, and the company looks forward to entering Europe’s lawful cannabis space alongside Canniberia.
While other Australian companies are operating in Europe (particularly in Germany), Portugal’s market is still fairly untouched by Australian firms. However, that may soon change, as Portugal’s market is growing quickly. The country’s adult-use cannabis market is projected to reach €200 million by 2023 and €800 million by 2025.
RotoGro expects to deliver and install its Rotational Garden Systems in Canniberia’s Portugal facility in early 2022. It also expects to receive 50% of the $CAD1.039 million (roughly $AU1.13 million) owed from Canniberia’s first purchase order by December 15th, 2021.