An idled greenhouse advanced in British Columbia owned by cannabis producer Canopy Growth went up in flames. – Photo courtesy City of Delta

Cannabis producer Canopy Growth is shuttering more facilities across Canada amid a contemporary spherical of layoffs in an effort to streamline operations and enhance margins, the struggling firm introduced Wednesday.

The cuts come amid a broad supply-demand imbalance within the Canadian cannabis business. The glut has resulted in a mountain of cannabis stock – each unpackaged and packaged – sitting in warehouses.

Approximately 220 staff will lose their jobs as a part of the most recent closures, and the Smiths Falls, Ontario-based producer is abandoning outdoor cannabis cultivation in Canada.

As a results of the most recent strikes, Canopy expects to document pretax costs of as much as 400 million Canadian {dollars} ($312 million) within the third and fourth quarters of the present fiscal 12 months.

In a information launch, Canopy mentioned it is going to “cease operations” at its websites in:

  • St. John’s, Newfoundland and Labrador.
  • Fredericton, New Brunswick.
  • Edmonton, Alberta.
  • Bowmanville, Ontario.

The manufacturing websites signify roughly 17% of Canopy’s greenhouse and indoor Canadian footprint, Canopy mentioned.

The determination to shut the websites got here after an end-to-end evaluate of the corporate’s operations, Canopy CEO David Klein mentioned within the announcement.

“These actions will be an important step towards achieving our targeted $150-$200MM of cost savings and accelerating our path to profitability,” Klein mentioned.

The evaluate, introduced throughout the firm’s second-quarter earnings name, appears to be like at individuals, course of, expertise and infrastructure.

The firm expects to document estimated complete pretax costs of roughly CA$350 million to CA$400 million within the third and fourth quarters of fiscal 2021.

Canopy additionally mentioned it is going to shut down its outdoor cannabis develop operations in Saskatchewan.

That means Canopy will probably be utterly out of the outdoor cultivation enterprise.

The transfer comes as Canada is awash in outdoor cannabis cultivation capability. The nation’s producers sat on practically 3 times extra licensed outdoor-grown cover than indoor capability this previous summer season.

Canopy has not made a revenue lately.

Over the previous 4 quarters, Canopy has misplaced over CA$1.5 billion, together with a internet lack of CA$97 million in its most up-to-date quarter ended Sept. 30.

In lieu of answering questions from Marijuana Business Daily, Canopy Vice President of Communications Jordan Sinclair supplied the next assertion:

“Canopy Growth has made the strategic determination to shut 5 of its manufacturing facilities because of the bigger restructuring efforts outlined by the corporate earlier this 12 months. This change comes because the Company continues to regulate its operations to match market demand. After cautious evaluation, we’re assured our remaining websites will have the ability to produce the proper breadth, high quality, and amount of cannabis merchandise to our customers.

“These decisions are never easy and we want to thank the employees affected for their contributions to Canopy Growth.”

Canopy’s shares commerce as CGC on the New York Stock Exchange and WEED on the Toronto Stock Exchange.

Matt Lamers is Marijuana Business Daily’s worldwide editor, primarily based close to Toronto. He could be reached at [email protected].

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