Struggling cannabis maker Canopy Growth Corp. (WEED) is selling its main facility in Smiths Falls, Ontario back to original owner Hershey Co. (HSY) for $53 million.
Hershey Canada had previously owned the 700,000 square-foot facility outside of Ottawa and produced chocolate there until 2007.
In a statement, Hershey said it’s premature to discuss whether the chocolate maker plans to relaunch the Smiths Falls operation and what, if any, candy it would make at the location.
For Canopy Growth, the sale of the Smiths Falls facility marks a key milestone in its efforts to restructure its operations amid dwindling sales and mounting losses.
Canopy Growth, and other Canadian cannabis producers, have been hurt by weak consumer demand, a strong black market for the recreational drug, and a U.S. market that remains closed to foreign entrants.
Canopy announced in February plans to close its main Smiths Falls headquarters and said some 800 staff — about 35% of its workforce — would be laid off as part of the decision.
By the time the sale to Hershey closes, Canopy Growth would have let go of seven properties for gross proceeds of $155 million.
Net proceeds from the sale of the Hershey building will be used to pay down Canopy's debt, said the company.
Canopy’s main operations have already been moved across the street from 1 Hershey Drive in Smiths Falls where it has a regional distribution centre and bottling plant.
Canopy Growth’s stock has declined 89% over the last year to trade at $0.56 per share.
