Diminutive microcap Roots Sustainable Agricultural Techn Ltd [ASX:ROO] is soaring today. With shares up 21.74% at time of writing.
A surge that has come on the back of the company reaffirming the positives of the UN’s new stance towards cannabis. Reclassifying cannabis as a Schedule I drug (the least dangerous tier) from Schedule IV (the most dangerous tier).
An outcome that also helped lift Creso Pharma Ltd [ASX:CPH] yesterday and today.
You can read all about that, right here.
And for shareholders, it really shouldn’t come as a surprise as to why Roots has come out with a similar update as Creso. After all, both companies are run by the same man: Boaz Wachtel…
Booming cannabis
The key difference between Creso and Roots is that where the former sells cannabis products, the latter sells products to grow cannabis.
Roots, as the name suggests, makes agricultural technology. A special system that is designed to offer better harvest yields for all manner of crops. No matter what the exterior environment may be like.
As such, they have several ties to the cannabis sector. Aiming to penetrate the market with their superior growth offering. Technology that could result in more frequent and abundant cannabis harvests.
Because of this, Roots has put out a near identical update to Creso’s from yesterday. Once again reinforcing and reminding the market of its potential to leverage this UN decision.
Albeit, with this agricultural rather than drug development angle still in mind, as they note:
‘The significant decision in essence recognises the potential medical properties of cannabis and will now tilt many countries to initiate national medical cannabis programs in full adherence with UN drug conventions.
‘Roots is expected to benefit significantly from the new ruling as some existing cultivation operations are likely to increase production and new countries will enter the Medical Cannabis sector allowing commercial cultivation where Roots systems are successfully used.’
When or how much benefit Roots will see from all of this though is still unclear.
Which is why the challenge for the company now is to maximise their opportunities. Especially now that this decision has put cannabis front and centre of people’s minds once more.
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What’s next for Roots?
Just like Creso, Roots now faces the challenge of delivering on its goals.
The UN decision is a big one, but it does nothing to actually increase either company’s sales. Instead, it is up to the companies themselves to find ways to make the most of it.
Something that investors will no doubt be eagerly waiting to learn more about.
Again though, with no definitive terms, no one knows what this will entail.
Shareholders will at least be pleased to see the share price heading in the right direction. Something that may provide some hope for ongoing success.
Only time will tell though.
Regards,
Ryan Clarkson-Ledward,
For Money Morning
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