2019

As 2018 comes to an end, I thought I'd revisit what has been achieved, not only this year but since Rotogro's inception & where we're headed into 2019.

Before listing in February 2017, Rotogro had been around for about 10 years, in which time they developed & perfected the rotary garden. Most sales were in small quantities to mainly small, often private self use growers. The listing was primarily aimed at providing funds to commercialise the rotary garden and market to larger organisations with legalised medicinal & recreational marijuana becoming more prevalent.

RGI listed at 20c and finished 2017 at 39c, slightly above where we are now. Although the share price doubled, I don't think 2017 was a great year for RGI. A lot of behind the scenes work was achieved with testing being commenced by quite a few potential clients, some such as Gibio will go on to be lucrative clients, others were held up for various reasons (mainly licensing delays by Health Canada), but will probably get done in 2019. Towards the end of 2017, RGI changed it's direction from purely sales to providing the whole service from planning thru to the end product including management, fertigation, cultivation etc etc. Although we didn't know at the time, they were also getting into fresh foods. The share price doubled, the order book wasn't great end of 2017.

2018 would seem to be the opposite of 2017, the share price although showing signs of life, looks to close slightly lower than 2017. Achievements for the year have been quite substantial. Signing a $2.3m sales deal with Miracle Valley was the main sale, the other 3 big projects (Gibio, Freshero & Supra) though not bringing in sales for 2018 are set to create a massive 2019 and beyond. The Hanson's acquisition enabled RGI to offer the full service, supplemented by the completion of their grow rooms & research facilities with highly qualified staff. GFS (Hansons) of course is cash flow positive & rapidly expanding. I think the GFS contribution is underestimated. This has enabled many of the big deals they have in the works to progress because along with their research facilities etc, they can offer the whole service with credible research rather than salesmen.

Another plus for 2018, I think is management have become more shareholder friendly. A new web site, presentations and timely announcements to let us know what's happening, in total contrast to 2017. This of course has been hampered by clients such as Gibio & Freshero wanting their clients (major supermarket chains) kept secret.

So where to in 2019?

As I've said in previous posts, the 3 big projects (Gibio, Freshero & Supra) will IMHO come to fruition in 2019. I've spoken to management and know the massive amount of work that has gone into these projects. Since their individual announcements, all 3 have positively progressed and I believe are now sure things. Obviously Gibio/Freshero are fresh foods so won't be held up by licensing issues. With Supra's LD acquisition, the delays experienced by other potential cultivators has also been negated.

In summary 2018 was a year of setting the foundations with little shareholder reward.
IMHO 2019 will see firm contracts signed from 2018's ground work. We'll also see some nice sales from these projects and associated cashflows. Some of 2017/8's "stranded" sales should also come to fruition. We'll probably also hear about the expansion plans of Gibio/Freshero and Rotogro's own MJ cultivation facility with offtake agreements. Then just as we had 3 big projects announced this year, how many more will be announced in 2019?