IGC To Develop Multiple Vertical Farming Sites

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."