CO2 GRO Inc (CVE:GROW) Proprietary Foliar Spray System Boosts Yields By 25 Percent
By MIDASLETTER LIVE | APRIL 24, 2019
CO2 GRO INC
CO2 GRO Inc (CVE:GROW) (OTCMKTS:BLONF) (FRA:4O21) is developing advanced carbon dioxide technologies to accelerate plant growth. COO Aaron Archibald explains that carbon dioxide is beneficial for growth, resulting in larger and quicker-growing plants. The company’s proprietary process dissolves carbon dioxide into water, which is then applied to the foliage of plants using CO2 GRO’s foliar spray system.
Typically, growers use gas deployment systems that result in significant carbon dioxide loss as a result of venting; CO2 GRO’s foliar sprays ensure each plant receives the necessary carbon dioxide. Unlike gas deployment systems, the company’s foliar spray technology can be applied to outdoor grows and greenhouses.
Archibald reveals that using CO2 GRO’s foliar sprays regularly results in yields 25 to 30 percent higher than yields produced by using gas deployment systems. Archibald anticipates that the company’s technology will be adopted by cannabis LPs in Canada, as Health Canada is in the process of reviewing applicable regulations. CO2 GRO currently has licensing agreements in both Canada and the US, and has seen broad interest from the American hemp space since the passage of the Farm Bill.
Transcript:
Narrator: CO2 GRO is a Toronto based, precision agriculture technology company. GRO offers CO2 foliar spray systems to both indoor and outdoor growers for increasing their crop yields, safely and naturally.
The company has over 66 million shares outstanding, with management ownership at 26 percent. CO2 GRO Inc is listed on the TSX-Venture under the symbol GROW.
James West: I’m joined now by Aaron Archibald, Chief Operating Officer of CO2 Grow, trading on the TSX Venture under the symbol GROW. That’s a good symbol.
Aaron Archibald: It is, thanks!
James West: Aaron, so your business is essentially creating foliar CO2 sprays, and so just to refresh the memory of our audience, or to enlighten them for those who might not know, what is the benefit of CO2 as a foliar spray?
Aaron Archibald: Well, any grower knows that adding CO2 to plants is beneficial, and they’ll grow faster and grow bigger; it’s difficult to get CO2 to plants, though. So what we do is, we dissolve CO2 into water and apply it to the foliage of the plant. That makes it 100 percent bioavailable, and it’s driven into the plant by osmotic pressure.
James West: Okay. So interestingly, most greenhouses that beneficiate with CO2 use gas deployment systems.
Aaron Archibald: Absolutely.
James West: And that’s got to be a little bit more wasteful, because obviously the air is being changed in the environment?
Aaron Archibald: Yeah. Most of it gets vented; it’s very difficult to create a homogenic environment and get all the CO2 to every plant. It’s like HVAC systems are extremely difficult in building; most people have a forced air furnace in their home know that they have a room in the winter that’s always colder than the other ones.
James West: Sure.
Aaron Archibald: So by putting it directly into the water and putting that directly onto the plant, every plant gets CO2, and it’s just the most bioavailable means of doing it.
James West: Cool. Then, you guys, when you were last here, we were talking about this issue where Health Canada had not approved foliar-sprayed CO2 for use in commercial gardens by licensed producers in Canada. Has that changed?
Aaron Archibald: Of cannabis. They haven’t changed their regulations necessarily; they have let us know that we’re approved by GFIA, and that we don’t contravene anything. We’re not a pesticide, we’re not a herbicide. I look at it and say we’re just a novel means of applying water and CO2 at the same time. Any LP is allowed to water their plant, and allowed to use CO2.
James West: Okay, so there’s no barrier to any of the LPs using the product.
Aaron Archibald: I think it’s a matter of how you interpret the legislation, and where and when they can use it in their facilities.
James West: Okay, let me ask you this another way.
Aaron Archibald: All right.
James West: How soon till LPs are using your product over gas-delivered CO2?
Aaron Archibald: I’d say very soon. I think that Health Canada is having a long, hard look at some of their regulations, and I think they did it very quickly and did it with a broad brush. You know, you can water or foliar spray cuttings, or clones, right now; it’s just more mature plants you can’t. I think when they recognize that there’s no added pesticides, anything harmful, there wouldn’t be a problem with spraying water on a plant.
James West: Sure. So I’m curious: how do you get CO2 dissolved in water?
Aaron Archibald: We use a proprietal technology that does it very efficiently. I mean, there’s a number of different ways to put dissolved gases into liquids; we just happen to have experience doing it efficiently. We don’t need to chill it, we don’t need to compress it. You know, some of that’s proprietal, so I won’t tell everyone exactly how we do it, but we can do it extremely efficiently, at high, high levels.
James West: Wow. Okay, so then, how often does a greenhouse or a, say, cannabis plant, need to be treated with foliar CO2 in order to optimize the growth cycle?
Aaron Archibald: The more times you can apply it, the better. So what we have worked on with people is applying extremely small volumes of water more times per day, because you get more CO2 delivered to the plant that way.
James West: Okay. So is this something that you could actually create an automated misting system within a environment that would be a beneficial way to approach it?
Aaron Archibald: Absolutely. Some of our customers do that now.
James West: Oh, okay, great.
Aaron Archibald: So you – most overhead booms, you can control the volume of water, the speed of the boom, and the number of times per day that it runs, so it’s easily automatable.
James West: And your process, as you say, is proprietary, but is it patented?
Aaron Archibald: Patent pending.
James West: Patent pending. Great. So at this point, who is using your product?
Aaron Archibald: Well, a number of different growers in the States and Canada.
James West: Okay.
Aaron Archibald: Generally we do sign a non-disclosure agreement; lots of people don’t necessarily want their name put out there, but we –
James West: They don’t want their competitors to know that they’re using this secret weapon.
Aaron Archibald: Exactly, but we currently have commercial operations in Canada and the US.
James West: Uh-huh. Okay, and how much does it cost? I mean, let’s pick a unit of square footage; let’s say, per thousand square feet, is it easy to say, well, this is how much the cost is going to be per month, per thousand square feet?
Aaron Archibald: It is pretty easy. You know, we do a scoping survey with them; we have an engineering group that works with them and looks at whether or not their infrastructure is set up to use the technology, what might need to be tweaked, and then we come to a commercial arrangement. And we usually charge by the square foot per month. We can do it quarterly as well, but it’s a per square foot, or per square metre in Europe, charge.
James West: So unlike software as a service, this is like CO2 as a service, model? [laughter]
Aaron Archibald: Yes it is, yeah. We – it’s a site license/lease model that we’re doing.
James West: Very interesting. And at some point, will you have a retail option available for those growing at home?
Aaron Archibald: I could see that in the future. It would be a matter of engineering it down to a small enough size and a price point where a home grower could use it. Right now, I think it’s not very feasible, but I could see it in the near future.
James West: Really? Okay.
Aaron Archibald: Just from a cost standpoint –
James West: This is me with my hand up. I would like to grow. Heading to my NDI, this is my garden in my own home right now that is growing hydroponically, and I would love the opportunity to treat two plants with foliar spray and two plants without and see how the difference is in a measured basis.
Aaron Archibald: Well, as we talked about before we got on air, I’ll get you some equipment used for a trial. So you just have to share the data with me.
James West: Great! Yeah, of course, I’d be happy to. Okay, Aaron, then how does the revenue model, the business model, of the company work, then? You’re saying you have a per square foot plus a licensing; how does that sort of, what per user, how much – what’s your – I guess I’m babbling now. What is the projected growth of the revenue in the company?
Aaron Archibald: That’s hard to say. The market is so big. You know, the plant for food market is $9 trillion per year; you know, the focus is cannabis right now in Canada, it’s very popular, but we can help all plants grow. So whether it’s peppers or lettuce, it’s almost hard to measure what our revenues are going to be like in two years, simply because we have so much opportunity in front of us.
James West: Sure. What’s to stop me from just spraying club soda on my plants?
Aaron Archibald: You could. Technically, you’d be in violation of the process patent, but also the cost to buy club soda and spray it on your plants would be –
James West: Pretty high.
Aaron Archibald: High. Extremely high.
James West: Interesting.
Aaron Archibald: Extremely inefficient.
James West: And is the carbon content of club soda equal or similar to that, and the bioavailability, does it even apply?
Aaron Archibald: Well, not really. I mean, they chill soft drinks and put it under extreme pressure; that’s why you see bubble nucleation, so you know, if you shake it and open it, it explodes. So that’ll tend to drive the CO2 out of it, and that’s part of the experience of drinking a carbonated drink, is you like the sense of the bubbles in it.
James West: The fizz.
Aaron Archibald: What we do is different in that you won’t actually see bubbles, and bubbles won’t nucleate out; it’s done on a molecular level, and it stays in solution so that it can be utilized. If it comes out of solution, it’s just not bioavailable anymore.
James West: Sure. What kind of increase in yield, in percentage terms, can one expect from applying foliar CO2 relative to not applying any CO2?
Aaron Archibald: I’d say on average we’ve seen between 25 and 30 percent increase versus standard gassing, so 800 to 1,200 ppm in a room.
James West: Then, now with Health Canada reconsidering some of its regulations over foliar applied, let’s call it a nutrient for lack of a better descriptor – is that something that they now have to specifically give you the ability, or an LP the ability, to say, okay, you can use that now without risk of it resulting in a negative test result from your product? Is there any risk of that?
Aaron Archibald: There isn’t. See, plants take in CO2, and they keep the C, which is the carbon, which is a building block for plants, and they respire out O2, much the same way we breathe in air with O2 and respire out CO2. So there’ll be no residual CO2 left in a plant because it becomes carbon, becomes the plant. So there really is no way to test for CO2 in a plant.
James West: Right. I guess as carbon-based life forms, we have no problem dealing with carbon in our cannabis.
Aaron Archibald: Exactly right. And that’s why CO2 makes plants grow bigger and faster and yield more.
James West: Right. So I guess, then, the inflection point for your company is going to be when widespread adoption of foliar-sprayed CO2 at the commercial level takes root – the pun intended – in the cannabis industry broadly?
Aaron Archibald: Yes. Yeah, and you know, like many Canadian technologies, sometimes you go abroad before you get adoption at home. It’s an unfortunate thing, but you see it a lot. We have a phenomenal amount of interest internationally; you know, US hemp growers can’t keep up with the number of phone calls we’re getting right now. Since it’s been legalized federally in the States, they’re really, really interested, especially outdoor growers. It’s the only means to apply CO2 to a plant outdoors, is by putting it in water first and applying it to the plant.
James West: Right. Either that, or putting a coal-fired hydroelectric plant next door!
Aaron Archibald: It’d be pretty inefficient to blow it on, because the wind would just take it away. So by putting it in water, we can supply outdoor growers with CO2, hoop houses, shade houses, things that historically – like, structures that have historically not been able to use CO2 in them.
James West: Right. What about competitors? Do you have – who do you have in the competitive realm?
Aaron Archibald: Touch wood as I say it: Right now, there are no competitors! You know, it’s a novel technology. No one had ever thought to do it before, so we’re first to market with it, and you know, that’s why we’ve gone through the process of getting the IP, but I think more importantly it’s going to be first to market, having some trade secrets and penetrating the market, and becoming the company that’s known as the CO2 foliar spray technology.
James West: Interesting as ever, Aaron. We’re going to continue to follow the story, and I can’t wait to try it out on my own plants. Thanks for joining me today.
Aaron Archibald: Okay! All right, thanks very much.