CO2 Gro Inc.

toronto

CO2 Gro Inc. has been on a long road with its technology for improving the use of greenhouse gas in greenhouses. The founders’ initial plan more than a decade ago was to capitalize on keen interest in algae for biofuels. It had success in the lab at the National Research Council Canada in Halifax, and launched an initial public offering.

As oil prices surged to US$147 a barrel in 2008, algae was seen as the next big thing. Then crude fell back to earth during the financial crisis, and the buzz died down. Algae no longer looked like a viable business, but the plant-growth technology would prove versatile.

Canada’s legalization of marijuana in 2018 was the start of CO2 Gro’s second act.

Pumping CO2 into greenhouses has long been known to increase plant growth by as much as 30 per cent, but the process is inefficient, and during hot months the gas gets vented into the atmosphere. CO2 Gro’s technology involves infusing water with CO2, but in a way that does not yield club soda. The solution is misted onto plants in short bursts, improving the efficiency of the process.

The marijuana industry quickly became a top market, and now CO2 Gro has sold its misting systems to eight licensed cannabis operations. It is also concentrating on other indoor-grown crops, including peppers and berries – those with large enough leaves for the technology to be effective.

“The use of carbon in most cases has not been a very precise thing. People burn fuels to make carbon, they do all sorts of things to get the CO2 for the carbon, and in most cases it’s lost,” said John Archibald, CO2 Gro’s CEO.

To pump the gas into a 100,000-squarefoot greenhouse, an operator may have to inject up to a million cubic feet of CO2, he explains. In many cases, as much as 90 per cent of that then gets emitted.

“What we do is put the CO2 into the water at a specific solution rate, and put it onto the leaves in a mist so the leaves basically uptake nearly all of the carbon that we give them. So we use about 5 per cent of the carbon that somebody would if they were gassing,” he said.

The technology has also proven itself in another important way: It reduces the need for herbicides, because the solution alters the pH level on the surface areas of the leaves, allowing the plants to resist pathogens such as E. coli, mould and powdery mildew, a common problem for cannabis producers.

“So a lot of folks look to us for the natural pesticide that comes part and parcel with putting on mildly acidic water loaded with saturated CO2 molecules,” said Sam Kanes, the company’s vice-president of market research.

CO2 Gro has 10 staff, and uses a global network of independent sales representatives to market its delivery systems. Its largest shareholder is U.S.-based private equity firm Ospraie Ag Science LLC.

In the past year, CO2 Gro has signed several deals with companies around the world to determine the commercial viability of the technology in their operations. They grow crops such as lettuce, strawberries and peppers, as well as orchids and roses.

“We are seeing an average of 30-per-cent crop increases, and to generate those crop increases we’re only adding about 5 per cent of the CO2 to the atmosphere,” Mr. Archibald said. “In a world that is experiencing food stresses to feed populations, particularly in the emerging economies that’s an important gain. We can’t work with wheat and we can’t work with rice, but we can make significant contributions at the margin.”