Canopy Growth Cuts Back Global Operations, Closes Canadian Facility, Lays Off 85

Canopy Growth Corporation WEED CGC announced global operational changes Thursday that it said are intended to improve production, balance supply and demand and enhance overall efficiencies.

They include: 

• 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. 

Related Links:

First & Free Releases CBD Line For National Stress Awareness Day

How The Impending Recession Could Change The Cannabis Industry: 'Everybody Is Going To Raise Capital'