The Glasshouse is a 2.4-hectare advance controlled environment facility using surplus heat and power from co-located anaerobic digestion facility.
FGEN has invested in an advanced 2.4-hectare controlled environment glasshouse project capable of growing a wide array of horticultural products, from consumable produce to cut flowers. The facility completed construction in September 2023 and is fully operational.
The glasshouse is in close proximity to an existing anaerobic digestion planed owned by FGEN, which supplies low carbon heat and power to the glasshouse via a private wire. Waste heat from the existing CHP engines is captures and delivered by pipe and a heat exchanger to the glasshouse. Wastage from the glasshouse produce is returned to the digester, creating a circular ecosystem.
Glass Pharms, its current operator, focuses on the lawful cultivation of the heavily regulated tetrahydrocannabinol cannabis flower (THC), conforming to tightly monitored licence requirements for secure supply to established UK-based pharmaceutical manufacturers. Glass Pharms is the first and largest UK-based commercial grower of high-THC cannabis flower for lawful third parties to produce cannabis-based products for medicinal use in humans (CBPMs)
The facility has been designed around advanced semi-closed glasshouse technology, enabling highly controlled growing conditions, continuous cultivation and robotic automation. Plants move through the facility via automated systems, minimising human interaction and reducing contamination risk.
The UK medical cannabis market has experienced rapid growth since legalisation in 2018, with patient numbers and import volumes increasing significantly year-on-year. Glass Pharms is well positioned to benefit from growing domestic demand and the expansion of specialist medical cannabis clinics across the UK.
The site has been designed with future scalability in mind, with a potential second phase capable of doubling the growing area.
Investment attractions
Synergies from co-location of facilities, whereby the glasshouse receives renewable heat and electricity via private wires at a discount to market prices it would otherwise pay and the anaerobic digestion facility benefits from receipt of revenues from the provision of otherwise waste heat as well as selling electricity to the glasshouse at a premium to the price available from exporting to the grid
Attractive risk-adjusted returns with FGEN benefiting from downside protection via a senior preferred return and opportunity for capital growth via equity interest
High margin business model, requiring low volumes to achieve breakeven position whilst retaining potential for significant capital growth
The investment generates new diversified revenue streams for FGEN derived from glasshouses, whilst also increasing revenues from an existing asset
Acquisition date
September 2022
Total Investment
£19.2 million senior loan funding construction
£9.5 million convertible loan notes
£2.0 million senior revolving credit facility
Minority 10% equity ownership investment structure