Roots Secured Second RZTO Cannabis Sale In North America; Stock Surged Up By 9.5%

Roots Secured Second RZTO Cannabis Sale In North America; Stock Surged Up By 9.5%

On 4 April 2019, an Israel based agricultural technological company, Roots Sustainable Agricultural Technologies Limited (ASX: ROO) announced about procuring a second sale of the company’s Root Zone Temperature Optimisation (RZTO) heating and cooling technology in the USA to independent cannabis producer Mr Ivo Lopez of Mendocino Natural Farms, based in North California.

Mendocino Natural Farms is into the production and processing of cannabis as well as a member of the Round Valley Cooperative in ‘The Emerald Triangle’ and holds numerous permits for cultivation.

RZTO technology makes effective use of plant functioning for amplified growth and excellence by turning the plant’s root zone temperature at a stable position. The technology makes effective use of Ground Source Heat Exchange (GSHE) principle. Roots mount a closed-loop pipes mechanism. The lower coils are installed at a penetration, where soil temperature is steady and remains unimpacted by extreme weather conditions. The upper coils are installed in the targeted crop’s root zone beneath the surface of the soil. The water flowing by the lower pipes is charged by the soil’s unchanging temperature. The hot (or cold) water is pumped via the pipes mounted in the root zone, where the heat (or cold) is released.

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The sale of A$42,300 (US$30,000) comprises of ROO installing its proprietary RZTO cooling and heating system, in multiple 1,000 square foot hoop houses at Mendocino Natural Farms’ property in Round Valley, California. RZTO will be installed in 2 phases: In the first phase, the installation of a heat pump for root zone heating will be done. In the second phase, coils would be inserted at depth, for root zone cooling using the principles of GSHE.

The RZTO cannabis sale is the company’s second sale, in less than a month’s time in the North American cannabis market.

The previous sale was made to industry leader, Mr Tim Blake during late March 2019. One of the reasons behind the back to back sales is the outcome of ROO’s Technology Showcase which took place in North America during February 2019.

Also, there was a successful open field RZTO heating pilot on cannabis in Washington State, which took place in an autumn growing conditions, when there are heavy frosts, and temperature slips negative.

Dr Sharon Devir, ROO’s CEO commented that the company continues to strategically aim at the North American cannabis sector, with its sustainable agricultural technology heating and cooling solutions, catering to the industry-wide shifts towards external cannabis production. He further added that the company’s root zone technology allows the cultivators to curtail the effect of external weather conditions, while substantially decreasing capital and operational outlays.

Mr Ivo Lopez, MD, Mendocino Natural Farms stated that the company’s root zone heating, and cooling technology was a perfect fit for Mendocino Natural Farms. The technology also aids towards its commitment to low-impact farming method. He further said that Root technology would enable Mendocino Natural Farms to sustainably augment the quality of the plant, yield, provide an extension to its growing season, and an ability to go on with the cultivation in the winter months.

In January 2019, the company announced that it had gained A$278k sale from Dagan Agricultural Automation for second China project.

By the end of the trading session, the stock of the company stood at a price of A$0.115 (as on 4 April 2019), up by 9.524% from its previous day’s close. The company has a market capitalisation of around A$6.89 million, with approximately 65.62 million shares outstanding.


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