"A cousin of the traditional Lotus, the Lotus found on the northern shores of Isola grows only in cool, damp places and requires constant rain and moisture to thrive. It has life-giving properties and can be a component in health and antibiotic tonics. It also appears to have unknown psychotropic properties and should be handled with care." - Taken from page 19 of the Walkthrough And Strategy Guide With Hints, Tips & Tricks Directly From The Developers And The Game Testers
The lotus is an alchemy herb that appears in Virtual Villagers 3: The Secret City. It is found by the wall to the right of the bath.