Pubdate: Sun, 08 Oct 2017
Source: Province, The (CN BC)
Copyright: 2017 Postmedia Network Inc.
Author: Susan Lazaruk
Page: 14


Growers swapping produce for marijuana

A large-scale multinational Delta vegetable producer is swapping out
its tomato plants for pot plants in a 1.1-million-square-foot
greenhouse because it says it can make more than 10 times the money.

Greenhouses operated by Village Farms International in Delta: If various 
levels of government allow it, the facilities here will be converted 
into marijuana growing greenhouses. JASON PAYNE/ PNG

Village Farms International also has plans to expand five times that
scale, resulting in a warning from Delta Mayor Lois Jackson about the
future of farms on Agricultural Land Reserve.

"If you're a big corporation, you're going to do whatever you can to
make money," Jackson said. "But if we lose all our greenhouses to
growing pot, what are the incentives for the farmers to be growing
tomatoes, turnips and pumpkins?"

The Agricultural Land Reserve was created to protect five per cent of
B.C.'s land for growing food and other agricultural practices, said

And Delta, with its 22,000 acres of farmland with rich soil, offers
the "lowest tax rate" to encourage farmers and local production, she

Farms operating on the ALR also receive substantial tax breaks, which
are available to medical marijuana growers.

"(Village Farms International) is doing it strictly for the money, and
if the provincial and federal governments are good with that, with
them wanting to make lots of money and to take it out of this
province, I don't agree with that," Jackson said.

She also worries that Canadians will eventually have to rely on the US
solely for food supply.

Village Farms has entered into a joint venture with a Victoria-based
licensed producer of marijuana to grow pot in the greenhouse beginning
as early as next year, when recreational marijuana is expected to be

"The reason is that you look back at the vegetable industry, we used
to have (profit) margins of 20 to 25 per cent, and now it's down to
six per cent," Village Farms CEO Michael DeGiglio said from his Texas

Because NAFTA allows Mexican vegetables to be imported into Canada,
Canadian growers can't compete with the $8-an-hour workers get there,
he said. With benefits and other expenses like the carbon tax, workers
here cost the company $16 to $20 an hour.

"Revenues will be 10 to 15 times higher than with vegetables." And the
company's website says its earnings before interest, taxes,
depreciation and amortization - a common business measurement - are
expected to jump 50 per cent.

"If the margins are that much better (with pot production), we have a
fiduciary responsibility to our shareholders," said DeGiglio.

He said profits for vegetable growing have been on a "10-year slide"
and "if we're going to continue with NAFTA, we're not going to be a
viable company soon," throwing 800 employees out of work.

He said there's no worry of a shortage of vegetables because there's a
"huge oversupply of vegetables and 60 per cent of them are exported to
the United States."
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