Canopy Growth Cuts Back Global Operations, Closes Canadian Facility, Lays Off 85
Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) announced global operational changes Thursday that it said are intended to improve production, balance supply and demand and enhance overall efficiencies.
- Quitting operations in South Africa and Lesotho, with a plan to transfer ownership of all African operations. Canopy said it should finalize the transaction in the upcoming weeks.
- Closing an indoor facility in Yorkton, Saskatchewan in response to the market climate in Canada.
- Halting operations at its Colombia cultivation facility and starting to rely on local suppliers for raw materials and Procaps for “formulation and encapsulation activities.”
- Stopping its farming activities in Springfield, New York due to a surplus of hemp produced last year.
Layoffs, Closures 'An Important Step' For Canopy
Canopy said it is laying off about 85 full-time employees. The company said it expects to record projected pre-tax charges of around CA$700-800 million ($495.9-566.8 million) in the quarter ending March 31.
"When I arrived at Canopy Growth in January, I committed to conducting a strategic review in order to lower our cost structure and reduce our cash burn," CEO David Klein said in a statement.
"I believe the changes outlined today are an important step in our continuing efforts to focus the company's priorities, and will result in a healthier, stronger organization that will continue to be an innovator and leader in this industry. I want to sincerely thank the members of the teams affected by these decisions for their contributions in helping build Canopy Growth."
CGC Price Action
Canopy Growth shares were down 3.05% at $14.31 at the time of publication Thursday.
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