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A rack of basil plants at NuLeaf Farms in Calgary grows under a 48 watt LED Grow Light.NuLeaf Farms

In a warehouse bay nestled between a casino and a car dealership in southeast Calgary, NuLeaf Farms produces leafy greens and herbs such as thyme and basil.

The company’s operation is small, producing the equivalent of a little more than half a hectare of outdoor farmland, but its founders – former oil and gas workers who turned to agriculture during a downturn in their industry – hope it’s the beginning of a network of facilities that they say has the power to bring down food waste, contribute to food security and respond to the growing threat of climate change.

“We’re really trying to tackle food waste problems, and a big part of the food waste is just the transport time,” NuLeaf president Ryan Wright said in an interview.

A loading tower at at NuLeaf Farms.NuLeaf Farms

“We’re always harvesting our crops the same day we deliver it to our customers, so this is greatly extending the shelf life.”

NuLeaf is one of several indoor farming operations that have opened in Alberta in recent years, along with at least one more planned. GoodLeaf Farms, based in Guelph, Ont., recently announced an expansion into Calgary with provincial government funding.

NuLeaf converted a 900-square-metre warehouse into a vertical farming operation that uses a combination of automation and workers to handle harvesting and packaging. The herbs are grown in towers with about 20 plants a square foot compared with one plant a square foot on a traditional farm.

The company sells to local grocery stores, restaurants and directly to consumers.

Mr. Wright said NuLeaf aims for prices that provide “field parity” – in other words, a similar cost to the same products grown on traditional farms in places such as California and Arizona and then shipped to Canada. He said despite the high capital costs of vertical farming, even with a converted space, field parity is possible owing to automation, lower transportation costs and less food waste.

“One of the big benefits for these vertical farms is being able to produce 365 days a year with predictable yields, predictable equality and predictable output to market,” he said.

Mr. Wright added that hydroponic growing creates a closed system that dramatically reduces water use.

Kale and Chard plants grow on a wall.NuLeaf Farms

He said the company’s long-term goal is to build up a network of smaller farms, rather than expanding into larger facilities – a move that holds the promise of lower building costs and the advantage of being closer to commercial buyers or consumers.

A report produced by the Alberta government last year on the state of the greenhouse industry counted seven vertical farming operations in the province, including in warehouses and transport containers. The report cautioned that vertical farming could remain a niche industry in Alberta owing to competition from the United States and Mexico.

A separate consultant report prepared for the provincial government earlier this year said the vertical farming model showed promise but that it was difficult to estimate the potential market owing to the relatively small size of the industry to date and the level of international competition.

The City of Calgary changed its land use bylaws in 2017 and has made additional changes since to make it easier to secure approvals for indoor agriculture. A municipal food plan called Calgary EATS! was released in 2012 that aimed to increase the availability of locally grown, healthy food options.

GoodLeaf received $2.7-million from an Alberta government investment fund for its planned expansion in Calgary, which was announced in late November.

Like NuLeaf, GoodLeaf is able to compete with field-grown produce.NuLeaf Farms

Company vice-president Jeff McKinnon said GoodLeaf picked Calgary because it serves as a distribution hub for Western Canada for major retailers and distributors. GoodLeaf is building a new facility rather than taking over an existing space; when it is up and running, the company expects to produce 700,000 kilograms of food a year.

GoodLeaf sells to commercial customers such as grocery chains and restaurants, with no direct-to-consumer sales. Like NuLeaf, Mr. McKinnon said his company is able to compete with field-grown produce owing to savings in automation, reduced food waste and much lower transportation costs.

Mr. McKinnon said vertical farming allows GoodLeaf to shield its operations from the vagaries of things such as weather that can wreak havoc on traditional farms and wipe out entire years’ worth of crops. It also uses 95 per less water than field-grown produce.

“It’s really about sustainability and stability of supply,” he said.

“We’re providing clean, pesticide-free, pathogen-free products, and basically, every day for us is the same. We removed weather from the equation, so we’re able to provide the product regardless of snowstorms and windstorms or lightning.”

GoodLeaf started in Nova Scotia with a pilot facility before opening its first commercial indoor farm in Guelph, Ont., in 2019. The company plans to expand into Quebec in 2022.

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