Another Cannabis Grower Takes Cost Reduction Measures Due To COVID-19 Concerns
Cannabis producer The Green Organic Dutchman Holdings Ltd. (TSX:TGOD) is laying off employees and delaying the opening of a facility as a way to cut costs.
The move, announced Wednesday, marks yet another attempt by a cannabis company hoping to reduce expenses as a way to cope with current market conditions.
Green Organic Dutchman will delay the launch of its Valleyfield facility, and temporarily lay off the workforce there with plans to reestablish activities later this year.
The Mississauga, Canada-based company has joined other cannabis-related firms that have opted to trim staff due to the coronavirus outbreak.
"Multiple factors, most particularly the COVID-19 pandemic, are contributing to an environment in which we must be extremely prudent with how we manage our cost structure, Chief Executive Brian Athaide said in a statement.
The launch date for the rest of Cannabis 2.0 products remains intact.
In addition, the company noted that it expects to obtain Health Canada’s license amendment soon, which will enable it to automate many processes at its Ancaster facility in Ontario, reducing its costs once again.
Green Organic Dutchman had attempted to sell the facility last year through a leaseback arrangement, but ultimately took it off the market.
Among other cost reduction measures the company has taken are salary reductions – 20% for employees and 30% for some executives, halting recruitment and consultancy activities, collaborating with suppliers on establishing further cost savings.
The company's shares were trading 18.55% higher at 27 cents per share on Thursday.
Photo courtesy of Green Organic Dutchman.
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