Roots Sustainable Agricultural Technologies makes strong March quarter progress, laying foundation for growth in key operating sectors

Roots Sustainable Agricultural Technologies Ltd (ASX:ROO) made strong progress across the global cannabis industry and plant-based meat division in the March quarter, laying the foundation for growth in key operating sectors. In the quarter, the company completed a global suppliers survey for hemp-based products in collaboration with Hempoint sro and an initial letter of intent with Hempoint will be expanded, making Hempoint the consultancy arm of Roots’ plant and hemp-based meat department. The establishment of US-based alternative meat operations is well advanced and partnerships are expected to be finalised shortly.  Also in the March quarter, the company secured a A$51,700 sales contract with Puerto Rican cannabis company Caribbean CBD Farm Inc for more than 2,000 exchange probe units.  ‘Strong foundation for growth initiatives" Roots executive chairman and chief executive officer Boaz Wachtel said: “The progress made during the quarter is very pleasing and lays a strong foundation for a number of near-term growth initiatives. “Following recent regulatory shifts in the cannabis sector, we have continued to progress a number of business development initiatives that will underpin uptake of our RZTO and exchange probe technology. “The company’s expansion into Puerto Rico is another example of the demand we are witnessing from cannabis growers and from the agribusiness sector more broadly. “Considerable work was also undertaken to advance our plant and hemp-based meat department. “The data and background from the Hempoint survey will provide Roots with a very strong base to move forward, with particular focus on establishing and growing US operations. “The US has a number of food supply issues and represents a large market opportunity for Roots, we anticipate that our market entry will be very lucrative.” New sale contract in Puerto Rico In the quarter, the company secured a new sales contract for its proprietary Root Zone Temperature Optimisation (RZTO) technology valued at A$51,700 with Caribbean CBD Farm Inc., marking its expansion into Puerto Rico. The contract consists of more than 2,000 units of the revolutionary product being supplied, which will be inserted into pots at the farm. Mobile and PC applications developed by the company will also equip farm staff with sensors, providing them real- time feedback on the temperatures and functionality readings of the system. Drive growth through Puerto Rico Since the legalisation of medicinal cannabis in Puerto Rico in 2015, there has been a growing increase in patients utilising it for treatment. The territory now has 31 licenced cannabis producers, providing a large addressable market opportunity for the company to continue to undertake a number of business development initiatives to drive growth throughout Puerto Rico. Plant-based meat alternative momentum The collaboration with Hempoint has led to significant advances in realising opportunities within the lucrative organic plant-based meat market, which is anticipated to grow up to US$240 billion over the next two decades. During the quarter, Hempoint completed a global survey for the company to collect data on suppliers and pricing of hemp protein for the meat replacement market, which will be used by both parties to advance a number of initiatives, including the launch of hemp-based meat replacement products, in addition to the establishment of a US-hemp based food venture. The initial letter of intent (LOI) signed in December 2020 is also expected to be amended, and progress on another agreement, which will outline Hempoint becoming a consultancy arm for the company is being formed. This shows the company’s intent to accelerate its growth within the plant and hemp-based alternative meat products market while consolidating its pipeline of commercial partners. Preparations by the company to form a US corporation focused on the sale and distribution of plant and hemp-based, as well as other meat replacement products are well advanced. The company is finalising a multi-year business plan with key American partners. Additional updates will be announced in the near term.