A new tranche of investment money will allow an Ontario lettuce producer to scale up its operations in an effort to succeed in a fast-growing market.

Vision Greens, a Welland, Ont. vertical farming company, recently announced an $18-million investment – $10 million in equity and $8 million in debt capital from both The Dorchester Corporation and Farm Credit Canada (FCC) – has closed.

“With this round of funding, we will continue to expand on our Welland property, and we will triple our capacity. We’ll then use the cash flow for the operations and continue to source more funds to do the expansion,” Lenny Louis, CEO of Vision Greens, said.

It’s goal is to produce an additional one million pounds of lettuce per year.

The company hopes this new infusion of cash will fund the expansion but not at the expense of its current product lineup.

“It’s not just expansion for expansion sake. Is there a market? Can we get it out to market properly? Are we still maintaining our affordability stance on this product?” he said to Sustainable Biz Canada.

This is the second round of funding for the company, which raised $7 million in 2022.

Vertical farming's market share

Vision Greens grows three types of lettuce (green leaf, romaine and cherry kiss red leaf) as well as offering a spring mix for sale in all Metro and Food Basics stores in Ontario, and some smaller grocery stores. It also sells product to restaurants through food service distributors.

The greenhouse farming, or controlled environment agriculture, industry was worth $2.5 billion in 2023, according to RBC. It represents 39 per cent of all fruit and vegetables exported from Canada.

Globally, vertical farming is projected to reach US$33 billion by 2030, according to FCC.

Southeastern Ontario, in which Vision Greens is located, houses about two thirds of all operators in Canada.

Vision Greens' philosophy

When deciding to open the business in 2019 after yet another round of E. coli poisoned lettuce was announced, the founders decided the best way to compete was by offering “price parity with the product coming in out of California,” according to Louis.

“If consumers had to pay a premium for the product — yes, it’s locally grown and has no pesticides, and lasts longer — all of those are good things and important things for food safety, security, but if you charge people a massive premium for it, then you’re just catering to the affluent.”

With the new money, Vision Greens also hopes to learn from others and complete its expansion in a more measured way.

“We felt part of the reason why a lot of vertical farms were dying out in the industry is because they were scaling too fast without putting these operational processes in place.”

Its farming process involves lettuce growing hydroponically with continually refreshed water in an environmentally friendly way, Louis said.

“In Canada, where you have normally two harvests in the best-case scenario, we’re doing the equivalent of 26 harvests per year. Where we could use 12 and a half acres of land, we’re doing it in 4,000 square feet of growing space because it is a plant condo, they’re stacked vertically.”

Keeping the product sustainable

Because Canada offers relatively low electricity costs and renewable energy via hydro power (supplied by Welland Hydro), the company is promising a sustainable product, he said.

“We use two per cent of the land of traditional farming, and 98 per cent of our water is recycled because it’s a closed loop system. Whatever the plants don’t take from nutrition, it goes back into our water pool; we calibrate it, we clean it, and it goes back for consumption. So when you talk about land use, water use and renewable energy use, it’s truly an energy efficient and resource efficient kind of operation,” Louis said.

The company isn’t only competing with other farming operations in Canada, it’s competing with the U.S. But Louis looks at this a little bit differently.

“When your goal is to substitute the food imports, that’s really what we are here to do is to say, the stuff that’s coming out of California and Arizona in the winter that is traveling for 3,000-plus miles, where the Colorado River is drying up,” Louis said.

“Lettuce, as much as it does have some nutrition for you, it does have a lot of water content. What is silly about what we are doing is we’re transporting water from California to Canada in the form of lettuce, and we have the best freshwater source here, and the most renewable energy, and obviously now the technology to do so, that was really what our goal was,” he said.

By using vertical farming technology, producers such as Vision Greens are hoping to forestall even greater loss of arable land, which adds up to 319 acres of farmland every day, according to the Ontario Federation of Agriculture.

And while the company does uses plastic packaging that is fully recyclable, it has been looking to improve its carbon footprint, he said.

“We just moved from a plastic related (lid) to a film seal, reduced packaging plastic by 41 per cent so we were proud of that.”

“It’s a tough thing because . . . you have to strike the balance of shelf life where you don’t want it to be brought to wither and want it to last a little bit, and there hasn’t been anything that we’ve seen that truly matches what we can do with the current packaging that is used in the industry. It is recyclable but would I like to see us do something better? The answer is yes.”

Vision Greens is also studying deploying biodegradable packaging in the future, according to Louis.

“I think we can do better as an industry, and we’ve got our eye out. There is some research being done but I don’t think anything formidable has come out yet.”