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Sunday Wrap-Up: New Companies Go Bankrupt
Discover every Sunday a comprehensive weekly review of the indoor farming sector.
Good morning readers, the indoor farming industry has seen a mix of performance this week, with some companies experiencing gains while others have seen losses. AppHarvest saw a significant increase of 48.41% with a gain of 76 cents, while Urban-gro and Hydrofarm Holdings Group Inc also saw gains of 9.91% and 10.76%, respectively.
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However, Edible Garden Ag experienced a loss of 4.49%, decreasing 43 cents. In addition to these stock performances, the industry has also seen some major developments, including the bankruptcy filing of Leamington-based greenhouse grower Lakeside Produce Inc and the bankruptcy of Future Crops Cooperative U.A., an Israeli-Dutch vertical farming company.
Land Betterment Corporation’s subsidiary, Betterment Harvest, also recently closed on a 50% ownership interest in two operational greenhouse companies in Ontario, Canada. Overall, the indoor farming industry continues to evolve with new developments and challenges.
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This Week’s Editorial
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This Week in Indoor Farming
Leamington, ON-based greenhouse grower Lakeside Produce Inc. has filed for bankruptcy, owing $188 million (Canadian) to creditors. The company, which specializes in growing conventional and organic fresh produce such as tomatoes, cucumbers, bell peppers, and eggplant, has been delisted due to the filing.
Produce Blue Book, a leading credit rating & marting information for the produce industry, reported that: “The filing in the Ontario Superior Court of Justice, Windsor Division, under case No. 35-124676, shows that the company has $187,889,242 in total liabilities, $18.3 million in unsecured creditors, and $166 million as secured claims. It listed $3.58 million in total assets.”
The list of 300 unsecured creditors includes:
U.S. and Canadian produce suppliers.
Retail and food service buyers.
According to Bill Zentner, Vice President of Ratings Service for Blue Book, Lakeside filed an “assignment” in bankruptcy, Canada’s version of chapter 7. Insolvency trustee Ernst & Young made the filing.
Verticalfarmdaily.com reported that Future Crops Cooperative U.A., an Israeli-Dutch vertical farming company located in Poeldijk, announced that it had filed for bankruptcy. Future Crops had scaled back a significant portion of its production in the fourth quarter of 2022 due to high energy costs. The company’s products were sold under white labels at the Dutch supermarket chain Albert Heijn. Founded in 2016, Future Crops is the fruit of a partnership with the Israeli Agricultural Research Organization (ARO) and A&F Ventures, receiving $30 million in the first round of investment. In 2022, a second round of investment was led by Chinese giant Tencent.
The past year has been a roller coaster for Chinese companies as they were facing both strict lockdowns and increasing pressure from Beijing to control the assets of influential companies such as Tencent.
Recently, the Chinese government has increasingly acquired shares in companies such as Tencent, Alibaba, and other tech giants. In addition, as the Financial Times reports, the government has been acquiring ‘golden shares,’ which gives special rights to the government to overturn certain business decisions regardless of the proportion it owns.
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Land Betterment Corporation’s subsidiary, Betterment Harvest, has recently closed on 50% ownership interests in JC Fresh Farms Ltd. and Orangeline Farms Ltd., two operational greenhouse companies located in Ontario, Canada. The acquisition includes 65 acres of state-of-the-art, controlled environment growing facilities.
Ontario is known for having a high concentration of greenhouse facilities and ag-tech professionals, with over 200 greenhouse farms growing produce on over 3,000 acres. The high-tech growing methods used in these facilities can yield a higher product per acre and use less water and inputs than traditional farming methods.
The JC Fresh and Orangeline Farm sites specialize in high-yield, low-cost production output, leveraging advanced growing technology to produce greater yields than traditional methods. The facilities use hydroponic growing systems and advanced LED lighting for consistent, year-round production. In addition, the product is packaged within automated packing facilities to ensure quality.