Sometimes, oncoming events are easy to foresee. Such was the case with WeedMD Inc (TSXV: WMD), whom this morning announced that the company is closing its Bowmanville facility in 2021 as it looks to cut costs and improve operational efficiencies.
Facility closures were alluded to with the announcement of the resignation of the firms CEO, Angelo Tsebelis, earlier this week. While not directly stated in the release, the resulting events were heavily alluded to with the appointment of the firms Executive Chairman as interim CEO, resulting in us stating, “Scorsis also mentioned the keywords of “optimizing the organization,” a phrase within the cannabis space that historically has resulted in staff reductions and facilities seeing their capacity reduced in an attempt to right size operations.“
As per this mornings news release, the company has moved all packaging, labelling, and distribution activities to that of its Aylmer, Ontario facility as it looks to consolidate its operations. Going forward the London-area operations, which includes the Aylmer and Strathroy facilities, will be realigned as the firms core operations, as they were prior to the Starseed acquisition, as a means of maximizing the utilization of its facilities. The changes are to be completed this month. The changes are to impact approximately 20 employees.
“While our Aylmer site will focus on product distribution, processing and extraction activities; our Strathroy facility will continue to be the centre of excellence for quality cultivation, biomass production and dried flower processing. For 2021, we are establishing enterprise-wide targets as part of our focus on maximizing margins and increasing revenues.”
George Scorsis, Executive Chairman and Interim CEO
WeedMD last traded at $0.285 on the TSX Venture.
Information for this analysis was found via Sedar, and WeedMD Inc. The author has no securities related to this organization. WeedMD Inc was previously a client of CanaCom Group, the parent company of The Deep Dive. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
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