Troubled cannabis company CannTrust Holdings Inc. is temporarily cutting as many as 140 people – roughly one quarter of its workforce – as it works to comply with Health Canada regulations.
The company says there will be a series of phased layoffs between late October and the end of the year. The cuts are expected to result in monthly cash savings of about $400,000 and cost up to $800,000 in severance payments if the employees are not recalled within 35 weeks.
The savings will be dependent on the timing of employee recalls pending reinstatement of the company’s licenses by Health Canada, CannTrust says.
CannTrust has been mired in turmoil since it disclosed in July that Health Canada had discovered illicit cultivation in unlicensed rooms at its Pelham, Ont., greenhouse. Its licenses to produce and sell cannabis were suspended in September.
The company submitted a detailed remediation plan to Health Canada on Oct. 21. It expects to complete the work described in the plan by the end of the first quarter of 2020.
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CannTrust also says a special committee has completed its investigation into the causes of its non-compliance with the Health Canada regulations and made its report to the board of directors.
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