Ontario-based Canopy Growth Corp., says it will close five of its cannabis growing locations as it looks to get back in the black.
The recreational cannabis giant says it will close its facilities in St. John’s, N.L., and Fredericton, N.B., Edmonton, Alta., and Bowmanville, Ont., as well as its outdoor cannabis growing operations in Saskatchewan.
Approximately 220 people are expected to be laid off as part of the decision, the company confirmed in a press release Wednesday.
Canopy chief executive David Klein says the moves will help save between $150 million and $200 million while also accelerating the company’s path to profitability.
“We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand,” said Klein.
“This was a difficult decision but I believe it is the right one. I want to thank all of the employees impacted by this decision for their efforts in helping build Canopy Growth.”
The company says that the four indoor sites account for approximately 17 per cent of the company’s enclosed facilities in Canada and the outdoor facility in Saskatchewan represents 100 per cent of its outdoor locations.
Klein said Canopy will record pre-tax charges between $350 million and $400 million in the third and fourth quarters of its fiscal 2021.
The year 2020 has been fraught with changes for the industry in Canada, which recently marked the second anniversary of cannabis legalization in the country.
Earlier this year, Canopy laid off hundreds of workers while Aurora Cannabis, another Canadian cannabis giant, closed five facilities across the country and laid off approximately 700 employees.
At the time Jay Rosenthal, president of the analytical firm Business of Cannabis, told Global News the decisions were evidence of both companies adjusting to actual consumer demand, COVID-19 forcing stores to close and reduced profits.
–With files from Global News’ Nathaniel Dove