• One of the country's largest indoor vertical farms was built about 6 miles east of the Las Vegas Strip on the site of a former mail-order prescription drug facility.
• Oasis Biotech plans to start deliveries next week and said it can produce about 9,500 servings of mixed salad per day for local restaurants and casinos
• The vertical farm requires 90 percent less water than a traditional farm and uses about 50 percent less energy than most other indoor ag facilities.

Jeff Daniels | @jeffdanielsca

17 July 2018  CNBC.com

An indoor vertical farm that uses 90 percent less water than conventional growers is about to launch in Las Vegas and will be able to supply nearly 9,500 servings of leafy green salads per day to casinos and local restaurant chains.

"Las Vegas is the location that has the highest density of high-end restaurants, which can afford this premium specialty product," said Brock Leach, chief operating officer and general manager of Oasis Biotech. "We're going to be able to get our product from harvest to the customer in around 24 hours."

Oasis Biotech, a Chinese-backed farm that uses hydroponic watering and microclimate controls for crop cultivation, is scheduled to make its first delivery in Las Vegas on July 24. The 215,000-square-foot facility is expected to be one of the largest in the nation when fully built and will initially focus on growing baby greens, micro greens, and specialty herbs but plans to eventually expand into baby carrots as well as soft fruits, including strawberries.

Controlled-environment agriculture

The chemical-free facility uses hydroponics technology, so it grows plants without soil. It also uses high-end clean rooms similar to those found in computer manufacturing as well as special filters and ultraviolet lights to control air and water — all designed to keep the food safe.

"We are producing food that is the safest and securest food that you can possibly produce," said Leach.

The recent scare over salads at McDonald's due to an intestinal parasite outbreak highlights how difficult it is to monitor fresh produce grown on traditional farms. The FDA is still investigating what the source of the outbreak is for the cyclospora illnesses.

"The fact that the McDonald's outbreak made news is a warning of sorts, because we've always had foodborne outbreaks from various infectious diseases," said Dickson Despommier, professor emeritus for environmental health sciences at Columbia University and leading expert on vertical farming. "This [indoor controlled farming] technology allows you to avoid that."

Despommier said indoor vertical farming in cities will continue to grow in the future due to demand from restaurants and stores that are looking for "growers that can promise healthy, fresh produce year-round right next door to where the store is. The model has been developed, and I think it's a viable one."

Most of the leafy greens and other fresh produce supplied to the Las Vegas market are grown in California and Arizona, so there are added shipping costs and product can sometimes take several days to reach southern Nevada customers. Las Vegas hosted more than 42 million visitors last year and southern Nevada is home to more than 2.1 million residents or about three out of every four residents in the Silver State.

Talking to casinos

"We will be meeting with a lot of the major casinos here in the next few weeks," said Leach. "But they won't be part of our initial distribution. We're focusing more on independent restaurants and small chains."

The major casinos declined to comment for this story.

Leach said the vertical farm plans to sell its leafy greens and other products through a large local produce distributor. "They touch over 80 percent of our target customer base," he said. "Many of the large casinos already buy from this distributor."

The vertical farm's parent company is Sananbio, which is owned by Chinese LED chip-making giant Sanan Group. Sananbio already operates one of the world's largest vertical farms in China's coastal city of Quanzhou. Oasis Biotech represents its first major foray into controlled agriculture in the United States and an opportunity to showcase its technology and sell equipment and lights to other indoor agriculture businesses.

'One of the largest players'

"We're going to be one of the largest players in the industry," said Leach. "I don't see anyone in this space as competition but a potential collaborator."

The LED lighting installed at Oasis Biotech uses 50 percent less energy compared with traditional indoor growing, according to the company.

The Chinese company spent about $30 million on the vertical farm, including the 215,000-square-foot industrial property located about 6 miles east of the Las Vegas Strip. The vertical farm is located on the site of a former mail-order prescription drug facility.

The first phase of the indoor farm consists of about 60,000 square feet of production or the equivalent of a 34-acre farm. A second phase, planned for early next year, is expected to add 50 percent more space.

According to Leach, Oasis Biotech expects to be profitable from an operating standpoint in 2019.

"We're the only large indoor controlled-environment ag operation right now that is corporate-backed" and not funded by venture capital, Leach said. "That means we can focus on scale without having to spend a huge amount of resources on capital raising."

Automating harvesting

The microgreens and baby greens are currently harvested by hand, but the company plans to go to a fully automated harvesting in the second phase. The harvest automation equipment is based on the technology that has been used for several months at Sananbio's China operations.

"It will be automated from seed to harvest," said Leach.

Oasis Biotech employs about 130 people. The growing supervisor for the vertical farm is a former potato farmer from Idaho.

"We've got over 70 farmhands with maybe three people who have done controlled-environment ag before. We're teaching them how to be hydroponic technicians. There's going to be a whole new generation of farmers that are going to grow up around controlled-environment ag."

Water efficiency

Water supplies are limited in southern Nevada, a region facing drought conditions and where most of its water comes from the Colorado River or groundwater. The Las Vegas indoor farm uses 90 percent less water than a traditional farm, or roughly 300 to 500 gallons per day — about as much as a family of four uses flushing their toilets and running their showers.

While the mercury soared into the triple digits in Las Vegas this week, Oasis Biotech relied on micro-climate controls to keep the temperature and humidity just right for growing plants in hydroponic systems.

"If you can pull this off in the middle of a desert and this extreme heat, you should be able to do it in other places," said Leach, who previously was CEO of Urban Till, an indoor farming company in Chicago. Prior to that, he worked for a logistics company that handled food distribution for McDonald's.

Many of the early indoor vertical farms built in the U.S. have been in abandoned factories or industrial locations. The indoor farms also offer a solution to countries that need to import most of their fresh produce due to limited arable land or where water scarcity is a constant challenge.

Indeed, a new low-water indoor vertical farm is going up in Dubai this fall and expected to produce upwards of 6,000 pounds of leafy greens daily. The $40 million high-tech farm's backers include Emirates Flight Catering, which supplies more than 200,000 meals daily.

Lettuce traditionally grows in 80 to 90 days outdoors, and producers tend to get up to three harvests out of the field during the season. The indoor vertical farm in Las Vegas can output lettuce in 18 to 24 days and farm 365 days a year, according to Leach.

"The days are longer because we leave the lights on for about 16- to 18-hour cycles," said Leach, and "there's never a cloudy day."

-Story updated to reflect changes in fact sheet provided by Oasis Biotech.