Canopy Growth Will Shut Down 2 Facilities, Lay Off 500 Employees In 'Production Optimization Plan'

Canopy Growth Corporation (NYSE:CGC)(TSX:WEED) announced Wednesday the closing of its facilities in Aldergrove and Delta, British Columbia.

This move will lay off around 500 employees, the company said, adding that it has also dropped its plan to open a third greenhouse online in Niagara-on-the-Lake, Ontario.

Canopy Growth said these moves are part of its strategy to adjust cultivation capacity to expected demand.

"When I joined Canopy Growth earlier this year, I committed to focusing the business and aligning its resources to meet the needs of our consumers," CEO David Klein said in a statement.

"Today's decision moves us in this direction, and although the decision to close these facilities was not taken lightly, we know this is a necessary step to ensure that we maintain our leadership position for the long-term. Along with the rest of the management team, I want to sincerely thank the members of the team affected by this decision for their work and commitment to building Canopy Growth."

In addition, connected to the closing of the facilities, Canopy Growth said it projects it will report pre-tax charges of around $700-800 million in the quarter ending March 31.

Canopy Growth's stock slipped 4% to $17.06 during Wednesday’s pre-market session.

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