Canopy to shut down Niagara facility, lay off 30, in latest cost-cutting push
BNN Bloomberg
Canopy Growth Corp. is shutting down one of the biggest cannabis greenhouses in Canada as the pot giant looks to cut costs amid its ongoing pursuit of profitability.
Canopy Growth Corp. is shutting down one of the biggest cannabis greenhouses in Canada as the pot giant looks to cut costs amid its ongoing pursuit of profitability.
A Canopy spokesperson confirmed that the company is shutting down its Tweed Farms greenhouse located in Niagara-on-the-Lake, Ont. on Friday, a one million-square-foot facility. As a result of the closure, 30 staff will be laid off, a company spokesperson added.
News of the closure comes after Canopy reported disappointing second-quarter results that missed analyst sales and earnings expectations. The company also withdrew guidance on when it expects to become profitable, pushing its shares down to a new multi-year low. Canopy also said it sees a further $80 million to $130 million in savings it plans to make over the next several quarters in addition to the $70 million in costs it has already made.
Canopy along with other large cannabis producers have closed dozens of facilities across the country after realizing that they were growing far too much legal marijuana for the Canadian consumer market to handle. In Dec. 2020, Canopy announced it was shutting down five of its Canadian facilities in a cost-cutting move that resulted in the departure of 220 staff.
“This site optimization supports both our path to profitability and the realization of efficiencies from the acquisition of Supreme," a Canopy spokesperson said in an emailed statement to BNN Bloomberg. "Recognizing the valuable skills of our team members at the Niagara production site, we are pleased to be offering roles for the majority to transfer their employment to an alternate Canopy facility."
Canopy will now focus its cannabis production at its existing facilities in Smiths Falls, Ont. and Mirabel, Que. as well as a hybrid greenhouse in Kincardine, Ont. that it acquired from its takeover of Supreme Cannabis Co. earlier this year. The company is also looking to purchase cannabis from third-party producers to offset any impact these closures may have on its product rollout, according to Canopy's Chief Executive Officer David Klein.
