Is Vertical Farming Right for You?Oct. 3, 2018

Corey Ellis, CEOcorey@thegrowcer.ca

About Growcer

• Canadian technology company in partnership withAlaskan growers– Growing vegetables commercially in extreme weather– We built some of the world’s first year-round farms that operate in the

Arctic Circle; over a dozen new sites deployed in the last 18 months

• Our objective: Unlock the potential for year-round local food production through smart and reliable farming technology.

Common Motivators

• New stream of year-round cashflow• Avoiding seasonality (i.e. seasonal lay-off & retaining best

labourers)• Consumer trends favouring local & “always in season”• Minimizing heating for nursery starts• Diversifying and offering new cultivars• Long-term considerations

– Ecological: resiliency to climate risk & more efficient use of natural resources

– Leveraging existing expertise to leverage technology trends

Standard Process

• Evaluate your assets (i.e. available space, resources, know-how) and market

• Exploration – vertical growing techniques & platforms; level of automation; supplier research

• Business case & financing – Rate of return (ROI)• Project start, evaluation, incremental improvements• Scale

• Insufficient market understanding/research

• Cost of capital• Insufficient technology understanding / supplier

research – particularly marketed vs. achieved results

• Building insufficient capacity/skillsthegrowcer.ca

Common Mistakes

Challenge 1:Market Understanding

• High volume or few cultivars, or too many unfamiliar varieties– Interview current customers; replace standard varieties in volumes the

market is already absorbing– Trial new cultivars over time alongside consumer education

• Choose a size of a project that works for your needs and capacity; scale incrementally– Time to fine tune processes, build capacity– Develop market over time

Challenge 2:Financing/Capital cost

• Vertical farms tend to generate strongcashflow but low-cost financing is critical

• Equipment leasing vs. equipment loan vs.bank loan vs. self-financing• Most suppliers can now able to offer competitive leasing w/o

leveraging existing assets• Balance cost of capital with maintaining your working

capital

Challenge 3:Evaluating technologies

• Consider:– Ease of use / training– Your comfort with technology / level of ongoing

technical support from supplier– Maintenance costs & system reliability– Labour efficiencies– Fit with your business strategy

Challenge 4:Skills and capacity

• Biggest mistake: Too much, too fast• Build a project with familiar attributes to your current operation:

– Same client base;– Same or similar types of crops; or– Similar technology (i.e. hydroponics); and so on.

• Allow for a ramp-up period. With proper support from peers, suppliers, expect:– 2-3 months to reach 80% efficiency,– 6-8 months is normal to reach full efficiency and steady-state

Scaling and otheropportunities

2-container packaging & commercial kitchen module

• Incrementally scale inside a space, or use systems that are modular

• Nursery starts configuration• Specialty crops (i.e. micro-greens,

wild crops)• HRV / waste heat• Light food processing

Questions? Contact:

Corey Ellis, CEOcorey@thegrowcer.ca | 1 (833) GROWCER

thegrowcer.ca