Roots Sustainable Agricultural Technologies Ltd (ASX: ROO) is an emerging Israel based agricultural technology company with a focus on disruptive technologies to mitigate agricultural related problems. On 11 December 2018, Roots Sustainable Agricultural Technologies Ltd has issued interim results which show a 40 to 272 percent increase in average cannabis plant wet weight in the world’s first RZTO (Root Zone Temperature Optimization) heating pilot on cannabis in an open field. The test was conducted during October, and November 2018 in an open field in Washington State, and Root Zone Temperature Optimization heating technology was used on several cannabis strains in various RZTO heating treatment architectures which included 216 plants in total and corresponding control groups which are 81 un-heated plants. In this process, Cannabis roots were heated to stabilize root temperatures at optimal degrees regardless of air temperatures dropping below zero degrees centigrade.
These interim results have exceeded management expectations, and mainly they were achieved in an open field with heavy frost conditions. To mitigate the risks of high-valued crops in open fields Root Zone Temperature Optimization technology is the only way, where plants are exposed to extreme external weather conditions.
At present, the major cannabis companies like Roots is in a sweet spot in the US cannabis market. The recreational cannabis market in the United States has developed quickly with many crops now being grown in the open field which is due to lower initial capital expenditure. However, due to an increase in supply the prices of cannabis are decreasing and for the improvement of crop yield and quality, growers are needed to turn to ag-tech equipment.
By stabilizing the root temperatures, the process can lead to increased plant wet weight and corresponding yield. Further, the expected results will show faster growth rates. This process will allow growers to benefit from higher, premium prices for more extended periods. This performance figures out that breeder can get a return on their investment within a year, depending on the price per gram that will be received.
Roots Sustainable Agricultural Technologies Ltd allows their clients to control crop-climate during tricky fall conditions in a better manner, increasing wet weight by as much as 272 percent.
In the past six months, the stock price of the company has shown a negative return of 69.12 percent as on 10 December 2018 and 52.27 percent down over the past one month. Roots Sustainable Agricultural Technologies Limited shares are trading at $0.100 with a market capitalization of $6.72 million as on 11 December 2018. Despite the above news, the stock was down by 9.5% on December 11, 2018. It has a market capitalization of about $ 6.72 million and earnings per share of -0.031 AUD.