By Lynda Kiernan

Australian agtech leader CropLogic has raised more than A$9 million (US$6.2 million) within the past four weeks to fund the development of its Industrial Hemp Trial Farm in Oregon.

The company announced that it has successfully secured A$6.25 million (US$4.25 million) via a debt instrument backed by a consortium led by an unspecified UK-based fund and including North American and European investors.

These funds are in addition to another A$4 million (US$3 million) raised from institutional and sophisticated investors in April that were deployed across two tranches in April and May.

Together, these funding rounds are to be used by CropLogic in support of the development and expansion of its Industrial Hemp Trial Farm located in Oregon and operated by the company’s wholly owned subsidiary LogicalCropping, and ensure that the project is fully financed to 500 acres of hemp production.

“CropLogic’s growth, including the speed at which it is progressing its Industrial Hemp Trial Farm, is gaining the interest of capital markets and industry participants,” said James-Cooper Jones, CEO, CropLogic. “The speed at which we have been able to secure both equity and debt finance, the favorable terms therein and the international nature of investors speaks to this growing global profile of CropLogic.”

The project was designed to employ and vertically integrate CropLogic’s technology and agronomy expertise to improve production and CBD yields. Three different varieties known for their vigor, CBD compliance, and proven record of production in Central Oregon have been selected for cultivation.

The expansion of the trial farm to 500 acres will enable LogicalCropping to evaluate and produce reference data for a range of factors including soil types, land contours and elevation, irrigation systems, and genetics. It also gives CropLogic the ability to validate its suite of technological platforms under a variety of growing scenarios, enhancing the company’s scientific knowledge.

“Although this Trial Farm of 500 acres is modest when compared with the approximately 100,000 acres CropLogic services in Washington State each year, we feel the varying growing environments presents an opportunity for CropLogic to further vertically integrate its agronomy and agtech expertise greatly enhancing our scientific knowledge of not only an emerging crop such as Industrial Hemp, but also generally,” said Cooper-Jones.

Untold Potential 

By removing hemp from the list of controlled substances and legalizing its production, the 2018 $867 million Farm Bill was the catalyst to turn what has been a boutique activity since 1937 when the Marihuana Tax Act of 1937 made the possession of cannabis and hemp illegal, into a business that has the potential to generate revenues of more than $20 billion per year by 2020.

Despite the fact that hemp cannot be used as a recreational drug, it has been categorized by the U.S. government alongside drugs such as heroin, LSD, and marijuana for decades. In reality, hemp is currently used in the production of more than 25,000 products worldwide including food, beverages, textiles, furniture, automotive parts, beauty products, and building supplies. And as demand wanes for tobacco and dairy, trade tensions cut into global markets for U.S. goods, and climate change shifts production maps, the potential that the legalization of hemp  poses for U.S. farmers is significant.

Once CropLogic’s Oregon production site reaches its full 500 acres, the company has expectations of total production rates between 800,000 and 1,100,000 pounds of industrial hemp biomass. The price of hemp biomass varies by grade and strain, however, prices of US$35 to US45 per pound have been reported, according to the company, which states that its cost of production is estimated to be between US$5 to US$7 per pound.

“It is a great credit to my team that rapid progress on our Industrial Hemp Trial Farm continues, with drip-tape and mulch plastic beginning to be laid in the last week,” said Cooper-Jones. “I am constantly impressed how my team is up the challenge. This ‘can do’ attitude and delivering of milestones is being increasingly recognized by both capital markets and industry participants and we welcome how this new investor can add to this network.”

Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.