Local Bounti Corp. has resumed construction of a $40 million project to establish commercial greenhouses in east Pasco following a months-long pause while it absorbed the purchase of a California rival.

Local Bounti will cultivate live lettuce, herbs and leafy greens sold through groceries. It is not a cannabis company.

The Pasco greenhouse complex is the latest major turn for Local Bounti, the Hamilton, Montana-based agriculture startup that launched in August 2018 to grow produce in controlled environments.

It paid $3.1 million for the Pasco site in 2021 and began site work. But the work halted in early 2022 when Local Bounti announced plans to acquire Hollandia Produce Group Inc., aka Pete’s, a California-based greenhouse operator, in a $123 million cash-and-stock deal.

It described the decision to halt work in Pasco as a “pause.”

The Pete’s deal gave it access to 10,000 retail customers, including Kroger, Walmart, Albertsons, Whole Foods and other national grocers, as well as two production facilities in California and an unfinished one in Byron, Georgia.

Before returning its attention to Pasco, it fitted Georgia with its “Stack and Flow” growing system, which combines vertical and hydroponic elements, and began producing July. In October, Sam’s Club, the members-only arm of Walmart Inc., signed a five-year deal to purchase everything produced at the Georgia plant.

Local Bounti said it will expand the Georgia plant, complete the one in Pasco and begin another in Mount Pleasant, Texas, to keep up with demand.

The Pasco property, 950 S. Elm Ave., near Big Pasco Industrial Center, will have three acres of greenhouse and is expected to be operational by the third quarter of 2023.

The city of Pasco issued a building permit that values the construction at
$24 million, which is $2 million more than estimated in the earlier construction phase in late 2021. It also issued a permit Nov. 9 to install a $500,000 underground plumbing system.

The Texas facility will have six acres of greenhouse space and begin operating in late 2023.

In its third quarter earnings report, Local Bounti reported $6.3 million in sales and a net loss of $27.1 million compared to $159,000 and a net loss of $10.8 million for the same three-month period in 2021, reflecting the new revenue associated with Pete’s, which distributes to 35 states and Canadian provinces.

“We believe growing healthy vegetables is good business,” it said in a quarterly earnings report.