India Globalization Capital, Inc.
(NYSE MKT: IGC) announced that it has entered into an agreement with
TerraSphere Systems and Greenlife Ventures to develop multiple facilities to
produce organic leafy green vegetables utilizing TerraSphere's advanced
pesticide free organic indoor farming technology. The build-out for each new
location could be transitioned to support the legal cannabis industry as
soon as there is clarity on the evolving legal framework associated with
each geographic region.
The collaborative agreement between the parties calls for the build-out of
four initial facilities in the Northeast and Canada and joint work on the
process of patenting technology responsible for identifying the specific
origin of plants required for intrastate commerce. Each facility will range
in size from 10,000 to 30,000 square feet and will deploy proprietary
technology that based on previously built facilities, has several distinct
advantages over current indoor farming methods including being able to
achieve yields that exceed traditional methods by up to 100x. The technology
also involves incorporating environmentally friendly LED lighting for
developing faster growing plants with additional yields of up to 20%.
Once operational IGC will own 51% of each venture, which under certain
circumstance, could be slightly higher or lower. IGC is required to make a
cash investment in the venture and will receive a seven-year option to
purchase the venture for cash and shares of its common stock. It is
estimated that a successful facility of the type contemplated by this
venture could produce between $2.0 million and $2.5 million in annual
revenue with a projected net earnings return of about 25%. The total cost of
each facility is expected to be between $2.5 million and $3.0 million. There
is no guarantee that the estimated revenue and net earnings will be actually
realized. The venture has committed debt financing in place for each project
location.
CEO Ram Mukunda stated, "We are excited to partner with TerraSphere as we
look to both develop proven pesticide-free organic growing intellectual
property and secure a meaningful footprint of high tech facilities, in
important states, for ultimately growing legal cannabis. In the interim, we
expect these facilities to generate accretive revenue from other plants as
part of our strategic short-term goal of building profit, while
simultaneously moving IGC closer towards meeting our long-term goal of
becoming a dominant player in the emerging legal cannabis space."
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