Why One of Canada’s Largest Vegetable Producers Has Entered The Cannabis Industry

Article by Sam Riches, Growth Op

Before the family behind one of Canada’s longest-running and most successful greenhouse vegetable growing operations got into cannabis, they had two concerns.

The first was fears about how some of their U.S. competitors might react and if they would use the company’s cannabis position against them, says Jamie D’Alimonte, the CEO of Ontario-based DelFrescoPure, which grows and markets greenhouse tomatoes, peppers, cucumbers and strawberries.

Two, and more pressing, was the matriarch of the family’s position.

“My grandmother actually was with our company right up until she passed away four years ago,” D’Alimonte says. “She was really, you know, the typical old-fashioned Grandma and she really wanted nothing to do with the industry or the product. She was really kind of the last reason why we decided not to do it. When she passed, we thought it was just the right time to get into the industry.”

In 2018, Greenway Greenhouse Cannabis was incorporated and D’Alimonte was named CEO. The company is majority-owned by Sunrite Greenhouses Ltd., an established cultivator of greenhouse-grown produce.

D’Alimonte likens the company’s entry into cannabis to when he first joined the family business in 1990.

“Back then, our industry had about 100 acres of greenhouses, and today we’re almost pushing 4,000,” he says. “So it’s really in its infancy within Canada and maybe, hopefully, the U.S.”

As a subsidiary of the Del Fresco Group of companies, Greenway benefits from more than six decades of greenhouse growing experience, capital assets and operational support.

Still, D’Alimonte says the company is starting slowly as it plants its cannabis roots.

“I really believe that the square footage race that we saw over the last two years was the wrong approach on everything,” he says. “With our new products, we always start with 2,000 or 5,000 square feet. Perfect the product, grow it properly and then scale up slowly. That’s our mindset.”

Greenway has two facilities, a hybrid greenhouse, located in Leamington, Ontario, and an indoor nursery, located nearby in Kingsville. According to Greenway, they are the only cannabis company that has both a nursery and a cultivation licence in Ontario.

There are also plans in the future to open a farmgate retail store at the Kingsville location. Earlier this month, the company filed an initial application for listing on the Canadian Securities Exchange.

The greenhouse, a retrofit, is about 42,000-square-feet, just a fraction of the size of some other greenhouses in the industry, but D’Alimonte says that’s on purpose. If needed, they have the option to expand.

At the nursery, which is roughly 10,000-square-feet, Greenway trials different cultivars. Currently, the company holds 61 live genetics, the majority of which are proprietary to Greenway.

Instead of selling directly to the consumer market, Greenway will begin by selling cannabis to other license holders to sell and market, while it develops its growing footprint.

“The first logical step was to wholesale flower, because we’re confident in our low-cost growing methods, in our strains, and the production and quality,” D’Alimonte says. The strategy also allows the company to limit marketing costs and focus on its cultivation.

“There are huge opportunities with the nursery,” D’Alimonte says. “There are a lot of small micro-producers, and even LPs, that are always looking for new genetics and new products.”

Overseeing the plants and running the trial house is master grower Jawad Skieneh.

For the cultivar selection, Skieneh says beyond the expected things, like terpene percentage, cannabinoid profiles, and visual appearance, Greenway also has to consider how the plants will perform once they are moved to the greenhouse, taking into account how they grow, plant maintenance, yield and how much processing will be required on the back-end.

Skieneh also comes to cannabis from a vegetable background, having grown vegetables from 2015 to 2018, including tending to more than 100 acres of cucumber production at a previous facility.

“I got to learn how to grow and scale, which is important. I got to understand labour management. There are very, very small profit margins in commercial vegetable growing compared to cannabis, so you learn how to be efficient with the resources you’re given,” he says.

There’s less room for error when growing cannabis, he says.

“You have to be doing everything perfectly for eight to nine weeks to really have a high-quality product, whereas if you hit a little bump in the road, in a commercial vegetable crop, you always have time to fix it,” he says.

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