MustGrow Biologics Corp. (CSE: MGRO) (OTC: MGROF) is an opportunity that has been flying under the radar and one that our readers should be aware of. So far this year, the company has reported substantial developments related to the markets the business is levered to and we are bullish on the growth prospects that are associated with the strategy that is in place.
Notwithstanding those several substantial milestones so far this year, the response from the market has been muted and we find this to be of importance. At current levels, we find the valuation to be compelling and believe that MustGrow has a favorable risk-reward profile and has significant potential catalysts for growth and wanted to provide an update on the opportunity.
Expanding into South America
Earlier this month, MustGrow Biologics announced the initiation of its South American strategy for the bio-pesticide registration of TerraMG for use in several crop groups. This is an important development for the business due to the size of the South American market.
TerraMG is the company’s signature mustard-derived liquid pre-plant bio-pesticide formulation and we are bullish on the growth profile that is associated with it. TerraMG has been proven to control soil-borne pests and diseases such as Fusarium, Botrytis, Rhizoctonia, Pythium, Verticillium, Phytophthora, Sclerotinia, and Nematodes.
With regard to TerraMG, MustGrow has already been working on being granted US-EPA and Canadian-PMRA registrations for pre-plant treatment of soil-borne pests and diseases in high value crops. These registrations will be a catalyst for the business and our readers should be aware of this.
Going forward, MustGrow plans to replicate this strategy in South America. The company will be initially focused on Colombia where it will seek to have TerraMG registered as a bio-pesticide for use in high value crops (fruits, vegetables, coffee, oil palm, and various floriculture).
The phrase timing is everything is something that we would apply to MustGrow’s strategy to enter the South American market. The expansion will coincide with proof-of-concept testing of TerraMG on the Panama Disease, a lethal fungal disease that has been threatening the global banana supply.
Panama Disease is caused by a new Fusarium pathogen strain known as Fusarium wilt TR4 and is a soil-borne disease pathogen. MustGrow’s previous independent efficacy studies on the treatment of Fusarium oxysporum, a soil-borne pathogen that is similar to Fusarium wilt TR4, have demonstrated complete control of the fungus.
The spread of Fusarium wilt TR4 to banana plantations in South America has forced Colombia to declare a National State of Emergency, enacting special measures to stop the disease from spreading. According to the Food and Agriculture Organization of the United Nations (FAO), Fusarium wilt disease has been impacting the banana industry for more than a century.
MustGrow is awaiting final import approval from the Colombian government and this would represent an important milestone. MustGrow anticipates testing its liquid bio-pesticide in a laboratory before conducting studies in the fields for soil-borne pests and diseases. This work will serve as a benchmark for achieving registration labels in other South American markets and we are favorable on this aspect of the story.
A Differentiated Growth Story to be Aware of
When it comes to the cannabis sector, we believe that a company needs to be differentiated in order to be successful. Due to the saturation of the industry, we believe that a cannabis business needs to possess a defining quality in order to generate interest with consumers and with investors.
We believe that MustGrow represents a differentiated opportunity and find this to be an attractive aspect of the story. One of the ways that it has been able to differentiate itself from the competition is through the ownership of a patented technology that is derived from mustard seed and can be used as a natural bio-pesticide.
To date, this agricultural biotech company has completed more than 100 independent trials that show that its proprietary technology is just as effective as synthetic chemicals at controlling soil borne pests and diseases. We find the evidence to be compelling and are favorable on the amount of research that has been conducted on the technology.
Another reason we are excited about MustGrow is related to how the management team has been able to drive the story forward. Going forward, the company plans to advance new product development and we believe that the market does not appreciate the amount of value that can be generated through this.
By the fourth quarter of 2020, MustGrow hopes to have three approved cannabis cultivation input products available for sale in Canada. We are favorable on the company’s strategy for releasing products as well as the type of products that are being launched:
- CannaMG: the company’s mustard derived technology that is used to treat the soil pre-plant before being brought into the greenhouse for cannabis production.
- CannaPM: a third-party product that was licensed in 2019 and is a bio-fungicide that has been used to treat powdery mildew.
- Bio-fertility: Currently for sale under the name TP-1000, shown to increase cannabis yields by 4.6% and terpenes by over 20%.
The trend toward organic products is one of the most significant consumer shifts of the last century and we expect this trend to become more prevalent on a year-over-year basis. Over the next year, we expect to see MustGrow penetrate the Canadian cannabis market and are bullish on the amount of value that can be generated from it.
To learn more about MustGrow go to www.mustgrow.ca and please send an email to email@example.com to be added to our distribution list.
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