Canopy Growth Corp., (TSX:WEED) Canada’s largest cannabis producer, is shutting down two major cannabis production facilities and laying off 500 staff in order to restructure its operations.
The Smiths Falls, Ont.-based company said its facilities in Aldergrove and Delta, British Columbia represent about three million square feet of production space and will be shut down immediately, resulting in the loss of 500 jobs. Canopy will also halt plans to build a greenhouse in Niagara-on-the-Lake, Ont., the company said.
The closures will result in Canopy taking an impairment charge between $700 million to $800 million, the company said. It could incur additional charges related to its organizational and strategic review the company announced in February.
Canopy’s announcement comes amid a recent string of similar moves by other Canadian cannabis producers that have laid off staff in an effort to cut costs and become profitable. Last month, Aurora Cannabis Inc. announced it would lay off 500 people, while Tilray Inc. said it would reduce its 1,450 workforce by 10%, and the Supreme Cannabis Co. announced plans to reduce its headcount of 700 by 15%.
Canopy formed a joint venture for its B.C. operations with an unnamed "large-scale greenhouse operator" in October 2017 to develop the 1.3 million square foot Aldergrove, B.C. facility as well as the Delta, B.C. greenhouses which added 1.7 million square feet of space to its total production capacity.
Shares in Canopy docked 81 cents, or 3.4%, to $22.96.
