Controlled Environment Agriculture

Agriculture / Cannabis / Sector Profile

Controlled Environment Agriculture is a multi-billion dollar business that relies on electricity, labour and land. Medicine Hat has all three ingredients in spades, making the city a beneficial location for growers and agricultural technologists.

The Medicine Hat Advantage

For companies seeking locations for their greenhouse operations, Medicine Hat offers competitive electricity and labour advantages, plenty of available land, and market access.

Reliable Electricity

The city is one of the only North American jurisdictions to generate its own power, which is done through natural gas. Because of its power generation ability, there are no electricity transmission costs. A one million square foot greenhouse operating in Medicine Hat can yield up to $3 million in annual savings when compared to other Canadian jurisdictions.

Available Labour

Medicine Hat is home to 45% of Alberta’s total greenhouse area, up from 41% in 2010, including the 1.5 million square foot Big Marble Farms which is Alberta’s largest. Agriculture makes up 10.3% of Medicine Hat’s labour force, which is nearly identical to the construction industry at 10.7%. The unemployment rate at the end of 2017 hovered around the provincial average of 6%, with the wholesale and retail sector employing 13.5% of the city’s working population. Finally, wages and cost of living in Medicine Hat both register below the provincial average, providing costs savings without negatively impacting quality of life.

Labour Force By Occupation
Unemployment Rate

Market Access

Medicine Hat producers have overnight road access to over four million people, including Calgary and Edmonton. The city’s location at the junction of highways one and three provides direct access to Vancouver and the Pacific Coast. Medicine Hat Regional Airport offers daily service to Calgary International Airport.

With Alberta’s largest greenhouse cluster, reliable low-cost electricity, available greenfield and brownfield development opportunities, and available workforce, controlled environment agriculture investors are able to set up operations in Canada’s sunniest city with confidence.

Greenfield Development Opportunities

City of Medicine Hat

The City owns several undeveloped sections of land suitable for industrial use. Interested parties should contact the Land & Business Support Department for further information.

Box Springs Business Park (BSBP)

The Box Springs area is the fastest growing industrial and commercial development in Medicine Hat. There is access from Trans-Canada Highway #1, adjacent to the Town of Redcliff, and within the limits of the City of Medicine Hat.

BSBP has fully customized purchase options including leasing and purchasing and would be the fastest to market as it relates to construction with all services including public transit nearby.

News and Education

 

Indoor Crop Production Feeding the Future (Newbean Capital Whitepaper, March 2015)

  • There has been strong growth in local food demand, with the market expanding from an estimated $1 billion in 2005 to nearly $7 billion in 2014.
  • Indoor farms have historically struggled to compete on cost with outdoor counterparts but ‘field parity’ – growing at the same per plant cost as in outdoor farms – is quickly becoming a reality thanks to rapid falls in technology costs in areas as diverse as lighting, seed development and control systems.
  • A particularly notable technological development has been the declining price of LED lights, which fell by 24% between 2010 and 2012 and are forecast to halve by 2020.
  • Indoor farming will never replace conventional outdoor farming methods. It will instead augment the food chain to create a diverse, distributed system more resilient to supply shocks and better prepared to meet the demands of a growing global population.

 

Cultivating Agtech (CB Insights, November 2017)

The dropping cost to operate farms and the ability to have farms in more environments (especially closer to the end consumer) means that growing produce has become more decentralized. This means fewer supply chain shocks, new types of farmers, less waste, and food produced closer to the consumer.

  • “Precision farming is an area almost certain to shape the future of agriculture.”
    Samuel Allen, CEO, John Deere

 

A Jeff Bezos-backed warehouse farm startup is building 300 indoor farms across China (Business Insider, January 2018)

  • In late 2017, the company scored $200 million in the largest-ever ag-tech deal.
  • Plenty CEO Matt Barnard said the company hopes to eventually sell its organic produce for the same price as traditional produce. Plenty plans to drive down operational costs by automating its growing processes as much as possible.
  • In the spring, Plenty will open a 100,000-square-foot farm in the greater Seattle, Washington area. The 100,000-square-foot warehouse facility will grow 4.5 million pounds of greens annually, which is enough to feed around 183,600 Americans, according to the USDA.

 

How Vertical Farming Reinvents Agriculture (BBC, April 2017)

Vertical farming has plenty of applications, with the industry developing a number of different solutions. Everything from 70,000 square foot greenhouses designed to serve major metropolitan areas to vertical farms that can fit in a closet are under development.

  • It’s more cost-effective to stick to quicker-growing crops that yield a high market value. Herbs, baby greens for salad and edible flowers, for instance, fetch a lot more per kilogram than certain root vegetables, which are more likely to be grown outdoors the old-fashioned way for some time yet.
  • Urban Crops made an estimation with oak leaf lettuce and there they are actually at 5% water consumption compared to traditional growing in fields.
  • Urban Crops doesn’t plan to make its money from the sale of crops. It plans to make money on the sale of its vertical farms.
  • AeroFarms claims to have the world’s largest vertical farm, on 70,000 square feet, in New Jersey.
  • AeroFarms has solved the key problem plaguing aeroponics: keeping the nozzles clean.
  • NeoFarms has developed a small-scale vertical farm the size of a closet for in-home farming.

 

How Private Equity Giant KKR and Sundrop Farms Are Spending $100m on Indoor Agriculture (Agfunder News, April 2016)

In 2016, Sundrop Farms opened its 20-acre greenhouse in South Australia. The facility generates its own solar power and desalinates salt water for its own use. This facility advances the idea that food can be grown under cover in typically inhospitable environments.

  • In December 2014, global private equity firm KKR invested $100 million in Sundrop Farms, a UK indoor agriculture company currently growing produce in Australia. At the same time, Sundrop Farms announced a deal to supply tomatoes to Australian supermarket chain Coles.
  • The company, which has nearly completed construction of its first site — a 20-acre facility near Port Augusta in South Australia — is now eyeing expansion to other markets.
  • The 20-acre facility is projected to deliver about 17,000 tonnes to Coles supermarkets for the next 10 years.