To acquire agricultural land in Longueuil where they are building a vertical farm, GoodLeaf executives created a Quebec-based company run and funded from outside the province, found The duty. This “merry-go-round diverts the spirit of Quebec law” which formally prohibits companies outside Quebec from buying in agricultural zones, according to representatives of the agricultural industry.
Summer 2021. GoodLeaf negotiates with the City of Longueuil the purchase of 38 hectares of agricultural land. The objective: to build a vertical farm to produce small lettuces and sprouts in a controlled environment. Not being from Quebec, the Nova Scotian company – whose first shareholder is the giant McCain – cannot acquire the land without obtaining authorization from the Commission de protection du territoire agricole du Québec (CPTAQ), guardian of cultivable land. .
The leaders of GoodLeaf then created a numbered company registered in Montreal. GoodLeaf’s parent company, TruLeaf, is the largest shareholder, while GoodLeaf’s CEO, Barry Murchie, and its chief financial officer, Jeff McKinnon, are the directors. It was this company that finally bought agricultural land in Longueuil for $2.27 million in October 2021.
According to the deed of sale, it was already planned that the assets would subsequently be transferred to GoodLeaf which, presented as co-debtor, ” [fait] his personal business at all”. The day after the transaction, the parent company of GoodLeaf advanced, in the form of a mortgage loan, 25 million dollars to the company registered in Montreal, noted The duty. And in December 2021, work to build a vertical farm began.
circumvent the law
“By making an acquisition in this way, GoodLeaf is embarking on a sort of merry-go-round that diverts the spirit of Quebec law,” sharply denounces Charles-Félix Ross, general manager of the Union des producteurs agricole (UPA). “They did indirectly what they couldn’t do directly. »
Similar story from Michel Saint-Pierre, co-president of the Institut Jean-Garon, a Quebec think tank specializing in agriculture: “My reading is that we have taken a path to circumvent the the acquisition of agricultural land by non-residents. »
This former Deputy Minister of Agriculture and ex-boss of the Financière agricole explains the origin of this law, the application of which dates back to 1979: or companies that reside here. The spirit behind this is clearly that groups that are not from Quebec—whether American, Canadian, European or Chinese, for example—cannot acquire agricultural land by any means whatsoever. »
GoodLeaf declined our interview requests. GoodLeaf’s chief financial officer, Jeff McKinnon, who is also the Montreal-registered company secretary, briefly responded by email: “A Quebec resident company purchased the land. GoodLeaf leased the property from the Quebec resident and constructed a farm under the lease agreement. »
He maintains that all the steps have been taken and that GoodLeaf has finally received authorization from the CPTAQ to buy the assets of the Montreal company in May 2022.
The CPTAQ explains its decision as follows: “TruLeaf is indeed the largest shareholder, but, according to the Quebec Business Register (REQ), it is not the majority shareholder. Indeed, two other shareholders reside in Quebec. “Thus, the company (…) is a legal person resident in Quebec within the meaning of the Act”, indicates the CPTAQ.
However, one of the shareholders does not live at the address indicated in the REQ. We met the second shareholder, Shireef Darwish, at his home. When The duty asked if he had an investment in the project or if he owned shares in the company, he simply replied, “I can’t answer those questions. He also said he hopes to work more closely with GoodLeaf.
Asked about the role and investment of these Quebecers in the company, Jeff McKinnon of GoodLeaf is not very loquacious: “We are a private company and, as such, we do not disclose our investment structure or our remuneration, nor the companies in which we have invested. »
Regulatory gray area
“Perhaps there are firewalls that have not been incorporated into the law and which, by the same token, allow things to be done backwards,” said Michel Saint-Pierre, of the Jean Garon Institute. “In fact, they bought the land and started the work anticipating a favorable decision from the CPTAQ. He adds: “In fact, my concerns go beyond this transaction. One can wonder if it has been done elsewhere, on the one hand, but on the other hand if others could do it later. »
Charles-Félix Ross, director of the UPA, agrees. He cites as an example the interest in agricultural land on the part of property developers. “It is not uncommon to see that land is acquired by numbered companies, whose real owners are not really known. Their goal is to wait for the right moment to develop a project that has nothing to do with agriculture. Could 49% of some of these companies be owned by foreigners? We can ask ourselves the question. »