Sundial Growers (NASDAQ: SNDL) announced this evening that it is curtailing cultivation and harvest operations at its cultivation facilities as a means of reducing its cost structure in response to current market conditions. In the meantime, the company will be drawing on current inventories to fulfill supply contracts while continuing with processing functions.
The company positioned the move as a “monetization of inventories” rather than referring to the move as further layoffs focused on its excess cultivation activities amid a dwindling cash position. The move has been stated as “improving cash conversion” while “controlling variable production costs.” The reductions, in addition to earlier measures taken by the company are said to have reduced annualized costs by approximately $28 million.
Additional measures conducted by Sundial include pausing of hiring save for critical positions, eliminating all non-essential spend, and the reworking of facility workflows and processes.
Furthermore, Sundial identified that 65% of the impacted employees are classified as being temporarily laid off. The result of this specific text, of course, is that 35% of the staff reductions are intended to be permanent.
Not included in this evenings news release is a further update related to the sale of Sundial’s Bridge Farm UK asset. Last week, the company identified it has until April 15 to enter a definitive sale agreement for the property in additional to submitting a financing strategy to creditors, or risk defaulting on current credit facilities totaling more than $177.9 million. The company now has less than a week to close on such agreements.
Sundial Growers last traded at $0.62 on the Nasdaq.
Information for this briefing was found via Sedar and Sundial Growers. 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.
