Canopy Growth Corp (TSX: WEED) (NYSE: CGC) has begun laying off employees in poorly-performing international operations. MJBizDaily last night reported that the world’s largest cannabis producer will be laying off approximately 15% of its Latin American workforce as it restructures to cut costs in poorly performing segments.
The trend to reduce workforces amid a purported global growth sector has become a common theme as of late for cannabis producers. While Canopy Growth has only conducted layoffs in its Latin American operations as of today, others in the Canadian sector have been scaling back operations at home.
The last two weeks have been particularly painful for those employed in the Canadian cannabis sector, with Hexo Corp announcing it was laying off 19% of its workforce, or roughly 200 employees while also committing to idle certain facilities. The same day as that announcement, Canntrust Holdings indicated that they would be laying off 140 people at their Ontario operations as they seek to reinstate their Health Canada licenses. Then last week, Emerald Health admitted that it had reduced its workforce by 33% as a means of seeking future profitability.
In terms of Canopy Growth, the firm indicated to MJBizDaily that they are “aligning staff to focus on the priority markets for revenue generation.” Whether or not this is an indication of future cuts to come is unclear as the giant faces declining quarter over quarter revenues. The firm laid of 14 people in total in its Latin American operations, leaving 78 employees in the region for the firm.
Despite Canopy Growth’s big announcement of its Drake partnership yesterday, capital markets appear to be unenthused by the global cannabis producer. The firm hit a new 52 week low in yesterday’s trading session, demonstrating that big headlines with no near term material impact to fundamentals no longer move equities in the cannabis sector.
Canopy Growth closed yesterdays session at C$25.16 on the TSX, pennies above the newly set low of $25.06.
Information for this briefing was found via Sedar and Canopy Growth Corp. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
