Hi Ginger_steps
I’ll try to answer your questions. Firstly the easy one, no there isn’t any competition for rotary type gardens.
You’re initial question re low sales. I’ve asked the same question. The way it’s been explained to me, is the entities getting into MJ cultivation know nothing about horticulture. They hire growers and go by their advice. These growers are from traditional growing back grounds and tend to stick to what they know. So it’s a hard market to break into.
Initially RGI tried to sell just the machines, they found potential customers wanted someone to do the whole thing from design to end point. That’s why RGI changed its business model. Larger established growers like Canopy etc, already have their business/ growing model and stick with it. When other growers using RGI equipment start eclipsing their yields, they too will be forced to reevaluate.
MPX in one of their conference calls stated they were very impressed with the yields they achieved with their testing of RGI machines. They also stated they had to keep their growers happy. They are yet to order any machines, but have stated they will order for their new Ontario facility being fitted out from scratch. Their other facilities were already established so I'm thinking maybe it's hard to rip out the old stuff & replace with rotogro. Certainly customers that have ordered tend to use smaller grow rooms with 24 machines which would require different plumbing, electrical connections etc.
RGI sales have all been to startups designing from scratch (eg Freshero, Gibio, Frozen Penguin, Amfil, Miracle Valley, AEB). I have no doubt they will break into the established growers but it will take time. Having said that, they are also of the opinion they will eventually get out of sales and only use the patented machines for customers where they have a stake in them. The most recent deals, freshero involves a royalty of gross sales, Gibio they have a stake in, and can go up to 49%, & Supra will involve an offtake agreement.
And yes the share price is at lows but on very small volume. Considering it is lower now than it was a year ago, I think smaller holders have been very patient. Many investors like myself are already overweight and are holding without adding to their positions. As I've said before, larger institutions are waiting for signed contracts which will come early 2019.
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