Montreal Greenhouse Operator Eyes U.S. Cities

MONTREAL — Lufa Farms, which operates a commercial rooftop greenhouse year-round here, has taken an adage about New York City and made a slight change: “If it will work in Montreal, it will work anywhere.”

“Our reasoning was that if it will work in Montreal, it will work anywhere warmer in our target market geography because our costs will be less and the markets will be larger,” said Mohamed Hage, founder and chief executive officer of Lufa Farms, in a statement explaining why he opened his first hydroponic greenhouse in Montreal in February 2011.

Last week, Lufa improved its chance to test that theory. The privately held company, which broke even last February and has annual sales of $1.6 million, announced that it has secured $4.5 million in financing to support additional rooftop farming operations in Quebec that are in the works as well as potential facilities in Ontario and the U.S.

The investment came largely from Cycle Capital Management here, with additional funding from the company’s founding team, including Hage, Lauren Rathmell and Dave Furneaux. Andrew Ferrier, a veteran food and agriculture executive, also contributed and will be joining the company’s board. Additional funding, to the tune of $1.5 million, is expected in the coming weeks through government-sponsored debt sources within Quebec.

Read more: Schnucks, BrightFarms Partner on Local Greenhouse

Lufa just began construction on its second rooftop greenhouse, a 44,000-square-foot facility in the Montreal suburb of Laval, where it anticipates to start planting in early 2013; a larger unit in Montreal, 120,000 square feet, is in the planning stages. In the neighboring province of Ontario, Lufa is interested in a Toronto location.

In the U.S., the company is seeking locations in Boston (in the 40,000- to 50,000-square-foot range) and New York. “We hope that by the end of the year, we will get the go-ahead in Boston,” said Kurt Lynn, Lufa’s vice president and a co-founder, who explained that getting a rooftop greenhouse designated as an agricultural property in a commercial zone, and dealing with building-code ramifications, “can be complicated.” Over the summer, a potential site in New York’s famed Hunts Point Market fell through, but another 75,000-square-foot site in New York remains a possibility, he added.

All told, Lufa expects to have “well over 200,000 square feet of rooftops under cultivation,” over the next year or two, said Hage.

Lufa would not be the first urban rooftop farm to take root in New York. Already, several agricultural entrepreneurs have chosen the borough of Brooklyn as the venue for rooftop projects ranging from water-based hydroponic (Gotham Greens and BrightFarms) to traditional soil-based (Eagle Street Rooftop Farm and Brooklyn Grange). Either way, they are growing fresh, hyper-local produce such as lettuces, herbs, tomatoes and more, and selling it to retailers, restaurants or directly to consumers. In other parts of the U.S., a few food retailers, such as Rouses Market in New Orleans and Bi-Rite Market in San Francisco, have set up their own rooftop gardens, the former an aeroponic garden, the latter a standard, soil-based model.

Produce grown in urban greenhouses appeals to consumers and retailers for many of the same reasons other locally grown products do — the freshness and integrity of the product, familiarity with the grower, a desire to support the local economy, and the environmental friendliness of their short-distance distribution model. “The farther the producer is from the consumer, the more opportunity for problems of every kind,” said Lynn. And even if a type of produce travels well, “it’s not as nutritious or as tasty” as local produce, he added.

Lufa’s greenhouse uses a “drip-irrigation” hydroponic process in a temperature-controlled, close-to-sterile environment. Tomatoes, for example, grow in four-inch cubes of soil implanted in a coconut husk with water-based nutrients dripped in.