The First Harvest OZ Fund is seeking to raise $100 million to invest in high tech hybrid farming businesses. Specifically, the fund will focus on building facilities used to grow organic produce using the Nutrient Film Technique (NFT). As the result of a 2017 change to labelling laws, produce grown via the NFT technique can now be eligible tor labelling as “organic” and thus command a higher price tag.
The fund is currently considering several locations for its facilities, including one in upstate New York.
Indoor farming facilities are an interesting use case for the Opportunity Zone tax incentive, particularly in rural areas with lower land costs. Another QOF, the Ozone Capital North Country Growers QOZ Fund, is raising capital for a project that will build industrial sized greenhouses in Berlin, New Hampshire. Those facilities will aim to deliver cheaper per pound growing costs compared to other methodologies.
Indoor growing facilities can provide operators with greater control over conditions, minimizing the impact that extreme weather has on yield. Locating these facilities in Opportunity Zones results in significant tax incentives if the investment is held for 10 years or longer.
The First Harvest fund has a $250,000 minimum for Class B shares and $1 million minimum for Class A shares.