Canopy Growth (WEED) says it is eliminating 243 jobs as its sales continue to decline and the
Canadian cannabis producer implements a new cost reduction strategy.
The Smiths Falls, Ontario company said that the impacted workers span its operations across
Canada, Europe, and the U.S., with the Canadian portion located mainly in Ontario.
The job cuts are a key piece of the cost-cutting plan that will also see the company retool its
facilities, review procurement strategies, implement flexible manufacturing processes, and
reduce third-party professional and office fees.
Canopy anticipates the job cuts will create between $100 and $150 million in savings within 18
months and help it eventually achieve profitability, though no timetable for reaching that goal
has been provided by the cannabis company.
When it reported its most recent quarterly results, Canopy Growth warned market headwinds
could hamper the company's ability to be profitable in Canada, even after it spent months
achieving $85 million in cost savings.
Canopy Growth previously predicted it would be profitable in the second half of 2022 but
reassessed that goal last November.
The latest changes overhaul will result in between $250 million and $300 million in charges in
Canopy Growth's fourth quarter, and between $100 million and $250 million in non-cash
impairment charges, the company said.
Canopy Growth halted operations at five facilities across Canada, took $800 million in write
downs and laid off more than 200 workers in December 2020, while promising at the time that
the “difficult” decision would accelerate its path to profitability.
Canopy Growth’s stock is down 40% year to date at $6.82 a share. Over the past 12 months,
the company’s share price has fallen 80%.
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