- Cannabis giant Canopy Growth (WEED) is closing some of its production facilities in an effort to streamline its operations and increase margins
- The company will shut down activities in St. John’s in Newfoundland and Labrador, Fredericton in New Brunswick, Edmonton in Alberta, Bowmanville in Ontario, and several outdoor facilities in Saskatchewan
- It’s estimated that roughly 220 employees will be affected by the changes, which represent approximately 17 per cent of the company’s Canadian footprint
- For the third and fourth quarters of fiscal 2021, the company said it expects to record estimated pre-tax charges of between C$350 million and $400 million
- Canopy Growth is currently down 5.88 per cent to $34.72 per share
Cannabis giant Canopy Growth (WEED) is closing some of its production facilities in an effort to streamline its operations and increase margins.
According to today’s news release, the Ontario-based company intends to shutdown its activities at St. John’s in Newfoundland and Labrador, Fredericton in New Brunswick, Edmonton in Alberta, Bowmanville in Ontario, and all of its outdoor growing facilities in Saskatchewan.
These production sites represent roughly 17 per cent of Canopy Growth’s total Canadian footprint and all of its outdoor operations, and is expected to affect approximately 220 employees in total.
Canopy Growth said the decision came as a result of an end-to-end review of its people, processes, technology and infrastructure, which was announced during its second-quarter earnings call and is designed to move the company towards profitability.
“These actions will be an important step towards achieving our targeted [C$150 to $200 million] of cost savings and accelerating our path to profitability,” said David Klein, CEO of Canopy Growth.
“We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand,” he added.
For the third and fourth quarters of fiscal 2021, Canopy Growth said it expects to record estimated pre-tax charges of between $350 million and $400 million.
Profits have been elusive for most cannabis firms across Canada, which legalised recreational marijuana in October 2018, weighed down by fewer-than-expected retail stores, cheaper rates on the black market and sluggish overseas growth.
The COVID-19 crisis, which upended financial markets, has further slammed the sector by the making it more difficult to attract investments.
Canopy Growth stock is currently down 5.88 per cent to $34.72 per share at 2:30am EST.