This company is using tech to help people grow top-notch cannabis…
Moving forward, not all of the winners in the industry will be the largest producers of cannabis.
There are niches that need to be filled that the biggest players just can’t address, which is why companies specializing in cannabis growing equipment have a chance to strike it big. For a medical patient with a debilitating disease, it’s difficult to make it to a dispensary.
For recreational enthusiasts, some folks just enjoy growing their own plants because they know what went into growing the final product.
And the increased popularity of growing cannabis at home is one of the reasons why the Scotts-Miracle Gro Company (NYSE: SMG) is producing some eye-opening numbers.
Of course, Advisory Board Member and California resident, Michael Robinson, knew this part of the industry was going to be big. He’s one of the top technology financial analysts working today.
“As regards to Scotts Miracle-Gro, I was pleased to see the strength of their earnings and that they raised guidance, which are two bullish signs for the stock. Sales being up 245% at the Hawthorne Gardening Co. hydronic unit is particularly important. Booming demand for hydroponic equipment tells me our belief that this is a great cannabis supplier is dead on the money,” Robinson told me.
With the increased sales from Scotts, I decided to take a look at some of the other companies operating in this space of the cannabis market.
Paving the Way with Cannabis Tech
Seedo Corp. (OTC: SEDO) was founded in 2015 in Israel, and the company says you can use its self-contained grow box to grow plants and vegetables.
Using such devices to grow celery and mint is becoming popular, with AeroGrow International (OTC: AERO) recently reporting a 35% increase in revenue for the fourth quarter ended March 31, 2019.
However, cannabis is going to be a far more lucrative market for Seedo.
One of the barriers for cannabis equipment companies is that growing quality marijuana isn’t easy. First-time growers have to figure out the right soil to use, how to set up a lighting system, and a bunch of other things that can be expensive and take up a lot of time to learn.
By having tech and equipment work together, Seedo has seemingly found a solution.
“Think of Seedo as the first driverless car for hydroponic growing,” the company says on its website.
Installation is simple, and all you really need is water, electricity, and the Internet to grow a cannabis plant. Through the company’s app, you can even choose a growth recipe.
After the company received 3,000 pre-orders for a trial run that generated $7.2 million – as well as positive reviews – Seedo will start mass production at the end of 2019. Products will be delivered in Q1 2020.
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The Nuts and Bolts of Seedo
I’ve talked before about how consumer packaging and branding executives are flocking to the cannabis industry.
With Seedo, I found the same thing with the appointment of Daniel Birnbaum as a board member. Birnbaum was the CEO of SodaStream, another “DIY” device. SodaStream was acquired by Pepsi last year for $3.2 billion.
With his experience, it’s possible Birnbaum can help the company become an acquisition target.
On top of landing Birnbaum as a board member, Seedo has a partnership with Kibbutz Dan, an agriculture-based community in Israel.
Through this partnership, Seedo will produce commercial-scale cannabis farms that are fully automated. Those farms are expected to produce $24 million worth of cannabis over the next three years.
Now, Seedo knows the up-front cost of $2,400 for a growing system is not cheap, but it does have a solution for that.
It has a leasing program that allows the customer to pay a much smaller down payment, with monthly payments to follow until the term is up.
Conclusion on Seedo
Seedo has a number of ways to bring in money.
There’s a market for those who live in apartments and just want to grow herbs and vegetables. There’s also cannabis enthusiasts who want to grow their own flower.
You also have medical patients who need to be able to grow their own cannabis at home because of health reasons.
Finally, Seedo could also make money from cannabis firms paying to utilize their equipment and technology to develop their own automated farms.
Now, this company is way too small right now for me to recommend.
It’s also pursuing a lot of different strategies, which we generally don’t like to see. If you chase one rabbit, you might have a chance to catch it. If you chase two at that same time, you’re not going to catch anything.
And the idea of “cannabis in a box” is not unique to Seedo. There are several companies pursuing this technology, with different twists on the box and different ways to monetize the machines. None has quite the firepower of Birnbaum, but his vision alone won’t get Seedo over the finish line.
Cannabis tech is still in its infancy, but I wanted you to know about Seedo because there will be some very promising opportunities coming down the pipeline.
Executive Director, National Institute for Cannabis Investors
P.S. New cannabis companies are popping up every day. However, many of them don’t stand a chance at long-term success. In fact, many of these cannabis startups reach out to us for advice on how to grow their business. We’ll review their pitch decks, marketing plans, and leadership – all in the hopes of finding you our next private investment deal. Now, most of these companies are duds… but every once in a while, we come across a startup that could be the next $1 billion company. Or, in this case, what could be the next $52 billion company. If you’re interested in learning more about getting involved in the potentially lucrative private investing arena, just click here.
5 responses to “This Company Has Big Plans for DIY Growers”
August 23 2019