More novel CEA structures are typically referred to as vertical farms, whereby vertically stacked plants are grown in permanent purpose-built structures or modular structures, such as used-shipping containers, with complete control over the growing environment. There is no requirement for natural sunlight as artificial lights are used to grow the plants. Vertical farms comparatively need much smaller land as space is utilized vertically by stacking plants in levels. Characteristics of growing structures differ significantly. As example, containers are a low-upfront cost solution, but are limited in the yield they can produce. This lack of scalability limits the investment in technology; therefore it is expected to only be a niche solution catering to specific use-cases in the market or in urban areas. All large-scale vertical farms seen in the market are start-ups often employing state-of-the-art technology in automation and lighting. This results in much higher upfront construction costs for a vertical farm, of typically greater than $16 million per acre. For example, 80 Acres Farms has raised $74 million to build a

4.6 acre hydroponic farm in Kentucky 6 implying a $16 million per acre spend whereas Aerofarms has planned to build a 2.4 acre aeroponic farm in New Jersey through a $100 million raise implying a $50 million per acre cost of construction. 7 It is important to note, however, that the cost per acre will be lower if cultivation footprint is considered since vertical farms stack growing levels vertically thereby enabling higher cultivation area per building surface area. Annual operating costs for vertical farms can be 1.5 to 2.5 times a greenhouse operation, largely driven by high electricity needs. Higher operating costs drive the selection of crops, which have a shorter harvest time and have the highest yield per cubic inch of volume. Lettuce and variants of specialty leafy greens, along with fresh-cut herbs and microgreens, are the most frequently grown produce in vertical farms. Like greenhouses, vertical farms employ hydroponics as the major growing technology; however, there is more use of aeroponics as compared to soil.

6 Northern Kentucky lands giant indoor farming operation from 80 Acres Farms |, January 2021 7 Robotic warehouse farms will save the world |, April 2021

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