IM Cannabis To Reduce Its Workforce In Israel By Up To 25%

Zinger Key Points
  • The company expects that reorganization will result in ~$2.54 million in annualized cost savings.
  • The company provided an update on CCAA proceedings of Trichome Financial Corp.

IM Cannabis Corp. IMCC IMCC will be reducing its workforce in Israel by 20%-25% across all functions to strengthen its focus on core activities and drive efficiencies to realize sustainable profitability. All actions associated with the workforce reduction are expected to be substantially complete by mid-2023, subject to applicable Israeli law.

"The restructuring initiatives announced today follow our departure from the Canadian cannabis market to focus our resources on growth opportunities in Israel, Germany and Europe. It further reflects our determination to continue with our strategic plan by maximizing efficiencies to create a leaner and more flexible organization to better suit the current market environment and our short- to mid-term objectives" stated Oren Shuster, CEO of IM Cannabis. "We expect approximately CA$3.5 million ($2.54 million) of annualized cost savings from mid-2023, while maintaining our anticipated revenue."

Shai Shemesh, CFO of the company, will be stepping down and handing over his responsibilities through a structured transition period to Itay Vago, who will be appointed as the company's CFO. In his last role, Itay served as finance director of IMC Holdings Ltd., the company's Israeli subsidiary.

Rinat Efrima, CEO of IMC Holdings, will be stepping down and handing over her responsibilities through a structured transition period to Eyal Fisher, who will be appointed as the general manager of IMC Holdings. In his last role, Eyal served as sales director of IMC Holdings.

Yael Harrosh, chief legal and operations officer of the company, has been appointed to lead the company's restructuring plan and will be stepping down from her current responsibilities through a structured transition period once a new general counsel has been appointed.

The company expects to substantially complete the restructuring efforts during the first half of 2023.

Update on CCAA Proceedings of Trichome Financial Corp.

The company announced that the sale and investment solicitation process approved by the Ontario Superior Court of Justice (Commercial List) did not result in any bids for the going-concern business of Trichome Financial Corp. and its subsidiaries (collectively, "Trichome"). In addition, L5 Capital Inc., an entity controlled by Marc Lustig, executive chairman and director of the company, has advised that it will not complete the proposed transaction contemplated by the stalking horse share purchase agreement between Trichome and L5. As such, Trichome and the monitor appointed under the Companies' Creditors Arrangement Act will proceed with the wind-down of the operations of Trichome and the liquidation of its remaining assets.

A Growing Industry Trend

The cannabis industry has been facing a lot of layoffs recently, and IM Cannabis is not the only company initiating downsizing efforts.

  • Trulieve TCNNF fired an unknown number of employees at a customer call center in Clearwater in February.

  • Aleafia Health ALEAF revealed via its February-released earnings that it had to let go 20% of its workers.

  • SNDL Inc. SNDL has initiated a headcount reduction of approximately 85 employees at the Olds, Alberta facility as a part of a larger phased cost savings program that is expected to deliver close to $9 million in savings across labor and operational costs.

  • Canopy Growth Corporation CGC intends to close its 1 Hershey Drive facility in Smiths Falls, Ontario, in addition to reducing headcount across the business by approximately 60%.

  • Tilray Brands TLRY announced in January, it will lay off 49 employees at medical cannabis cultivation and manufacturing facility in Cantanhede, Portugal.

  • Clever Leaves CLVR recently confirmed the wind-down of all operations in Portugal as part of its ongoing restructuring initiatives, under which it had to lay off 63 employees.

  • Columbia Care Inc CCHWF is laying off numerous workers at its Saxton facility, per data from the Department of Labor & Industry; 73 employees will be let go effective February 28.

  • LeafLink, an online wholesale cannabis platform, laid off 80 workers on December 15th.

  • WM Technology Inc. MAPS cut 25% of its workforce, amounting to 175 employees.

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Photo by Thiago Patriota on Unsplash

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Posted In: CannabisNewsPenny StocksSmall CapMarketsEyal FisherIMC HoldingsItay VagoOren ShusterpremiumRinat EfrimaShai ShemeshTrichome Financial Corp.
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