CO2 GRO Inc (CVE:GROW) (OTCMKTS:BLONF) (FRA:4O21) CEO John Archibald is excited about the company’s recent trials, which illustrate the benefits of CO2 capture and show accelerated plant growth. CO2 GRO’s patented spray technology stimulates growing by up to 35 percent and the company is beginning cannabis trials in the US. Archibald describes the company’s technology and its applicability to the cannabis sector and $8 trillion food industry. CO2 GRO’s technology is fully scalable and integrates with existing irrigation systems, saving consumers money. The company has positive funding, having raised $1.25 million through a warrant exercise, and expects to be EBITDA positive next year.
Benjamin Smith: Welcome to Midas Letter Live. We have a very special guest in studio today: I’m with the CEO John Archibald of CO2 GRO Inc they trade under the symbol GROW on the TSX Venture. John, welcome.
John Archibald: Thank you. Good morning.
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Benjamin Smith: Now, I would like to lead off with a very material piece of news for your company which occurred, which was published on October 24th. Essentially, it was good clinical data from your patented foliar spray technology, and that also we had some good data that you published September as well and it’s a good follow up to that. Can you explain more about how important that data is for your company’s integration?
John Archibald: Well, certainly. The results in the flower world, it’s a $200 billion a year business; actually, sort of per square foot, a little more valuable even than food, and what we’ve proven with the flowers on several trials in Michigan is a very distinct advantages of growing faster and growing bigger with a better root development and more intense colour within the flowers, while bringing value to the grower.
Secondly, we’ve actually had full-scale trials there where people are growing 40,000 and 50,000 flowers per time with the technology, as well.
Benjamin Smith: Okay. So does this data that just came out, does that put, is there a critical mass scenario going on with your company along with what was published in September? Are you starting to see more awareness in the marketplace about just how, you know, prominent the value proposition is with some of these growers?
John Archibald: Yes, we are. As a matter of fact, it’s sort of gone from us contacting people, to people contacting us. They’re seeing, you know, they’re seeing the results, the results are being spoken about, and we are now having individual growers contacting us. We’re also starting to have some ag industrial partners and large companies approaching us about the technology anting to work with us. So definitively, critical mass.
Benjamin Smith: Okay, is your technology fully scalable to, you know, say, a 250,000 square foot greenhouse, or is it something more that’s something more for small scale growers at the present time?
John Archibald: It can be put into any size of greenhouse. Basically what we do is, largely integrate with their existing irrigation systems, and put the systems in. so whether you’ve got 2 acres under glass or 30 acres under glass, the integration is very simple, and totally scalable.
Benjamin Smith: Excellent. Now, you’ve recently announced the exercising of over 6 million warrants, and that raised about $1.25 million for your company. Ho do you plan to us the funds, and advancing your business strategy going forward?
John Archibald: Well, the funds are for our growth. We expect to be EBITDA positive in 018, an we’re recruiting more people to help us get there. It’s an interesting thing; these warrants were exercised largely where the share price was at or below the warrant share price, but the warrant holders believe in the future of the company, and believe strongly in the management an our plans for the future. So that underscored it very succinctly, I think.
Benjamin Smith: Very, a lot of confidence in the company, because I believe a large percentage of the warrant holders exercised even though the price at or just below strike, is that correct?
John Archibald: That’s correct, so obviously you have to believe in the management team and their vision and their plans, because you’re not taking a profit; you’re just investing in something you believe in, at that point.
Benjamin Smith: Of course. Now, looking at the chart, I know your company has been within a range – just over $0.30 on the upside, and about $0.15 on the downside. So there’s a one year range that’s very definable on a chart. Now, what catalysts are upcoming for CO2 GRO to perhaps compel that consolidation into any more upward momentum? Is there any catalyst that you see in the future besides going EBITDA positive next year?
John Archibald: Most certainly. We’re going to be starting cannabis trials in the US; we have several more trials for flowers. We expect our first real contract yet in Q4. So yes, some very, very positive things happening or us, along with more positive results out of our work at St. Cloud University, where we’ve had, where they’ve ben doing all the plant physiology work for us, and we see continuing good results, and we’ll be publishing further results in later this month as we finish up trials.
Benjamin Smith: So it seems to me that this might be part of your growth strategy going forward: you know, getting you product out there in all these clinical trials, and creating a sort of critical mass of data that just can’t be denied by the market anymore. So I would assume that there’s more studies going forward to corroborate that?
J.A..: There are more studies, and there will always be some studies going forward. Anybody that’s adopting the technology in big way, they want to try it out for themselves in a small way, and that they can do, when you think about it, many of the crops grow fairly quickly, and so you can see the evidence very early on. And especially with the plant physiology work we’ve done, we can show a grower what’s happening with his plants on a daily basis. So with some of the equipment we have, he can spot what’s happening, and know what’s happening with confidence, while he’s doing these trials.
Benjamin Smith: Okay, so that’s very interesting. So you actually have a dashboard or technology that allows growers to see how the plant’s dong on a day-to-day basis? How do you quantify that?
John Archibald: Well, if you take a look at things, like you can look at Co2 transfer, you can look at chlorophyll growth, and you can see all of plant activity, just by some fairly sophisticated equipment but readily available equipment that we have. And those are the important markers, and especially when you’re accelerating the growth of a plant, say, 30 to 25 percent, you want to be able to see those markers, and we can show those markets.
Benjamin Smith: So just to be clear, your technology is not specifically for marijuana, although that’s receiving a lot of the headlines lately, that, you know, the fantastic studies showing a minimum 45 percent increase in this bud value. You’ve had, you know, some pressers elucidating that. But it’s more than just cannabis, right?
John Archibald: Oh, it’s a whole $8 trillion food industry worldwide.
Benjamin Smith: That’s what you’re addressing?
John Archibald: Exactly. And moreover, what we can do is, because of the Co2 foliar spray, we can ring what happens in the greenhouse outdoors to value plants, as well. So there’s many, many greenhouses that are open-air greenhouses and that aren’t good for just C02 gassing, so the C03 foliar spray brings that Co2s lift, which is about 30 to 35 percent, it brig it to those people that couldn’t normally use Co2. So it’s stunning from that standpoint, and, you know, increases the market drastically.
Benjamin Smith: Even outside, there’s a way to contain it?
John Archibald: That’s right, because it’s a foliar spray, and there is a way to use it outside.
Benjamin Smith: Okay, and without getting into proprietary events of ow your technology works, how exactly does your foliar spray, you know, create that C02 capture within the plant?
John Archibald: Certainly. The leaf is a semi0-permeable membrane, just like your skin. Your skin will take in a nicotine patch, you know, take in nicotine and if you were trying to quit smoking, you’d maybe use a nicotine patch; it’s a chemical, and it’ll go through the skin. Co2 is a chemical, and when it’s put into water, it, too, will go through the leaf. And it goes into the leaf, the top of the leaf, the bottom of the leaf, irrespectively of the stomata, and the Co2 then goes C for carbon through the rotos and shoots and enhanced growth, and thankfully, it releases the oxygen for us, which we need, and the planet needs.
Benjamin Smith: Terrify. Well, that’s a fantastic update. John, I appreciate you coming on the program, and we’ll be following your story gong forward.
John Archibald: We’ll look forward to it, thank you.