Canopy Growth Shutters Facilities Across Country, Impacting 220 Employees

The outlook for cannabis operators in Canada is appearing bleak, with the announcement this morning by Canopy Growth Corp (TSX: WEED) (NASDAQ: CGC) that it is shuttering numerous facilities across the country, along with its outdoor grow operations. In total, 220 employees are said to be impacted by the closures.

The cuts to production are being undertaken as the company looks to “streamline operations and further improve margins.” Closures are only classified as being a “partial outcome” to an ongoing review of operations, signaling that more cuts to the firms operations may be yet to come.

Closures of the following facilities are being conducted by the company:

  • St John’s
  • Newfoundland and Labrador
  • Fredericton
  • New Brunswick
  • Edmonton, Alberta
  • Bowmanville, Ontario
  • Outdoor operations in Saskatchewan

In total, 17% of the firms Canadian indoor grow footprint is being shut down, along with 100% of its Canadian outdoor production. Pre-tax charges of approximately $350 to $400 million are expected to be recorded in the third and fourth quarters of fiscal 2021 as a result.

The actions are said to push the company towards achieving $150 to $200 million in cost savings while pushing the firm towards profitability.

Canopy Growth Corp last traded at $28.39 on the Nasdaq.

Information for this briefing was found via Sedar and Refinitiv. 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.

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