More Savings, No Disruptions: Canadian Weed Co. Makes Strategic Move To Boost Operations

SNDL Inc. SNDL announced additional optimizations of its facility footprint on Thursday to boost its cannabis operations segment.

What Happened

The Calgary, Alberta-based company said it would consolidate all cultivation activities at its Atholville, New Brunswick facility following the centralization of SNDL's manufacturing, processing and production operations to Kelowna, British Columbia.

Why It Matters

SNDL expects optimizing its facility footprint to result in over $10 million in annual savings from its cannabis operations segment through reduced fixed overhead, power costs and labor efficiencies.

These cost savings are in addition to the previously announced $18.2 million of annualized cost savings since the acquisition of The Valens Company Inc. in January 2023.

"In the past year, we've transformed our facility footprint with a clear goal of achieving profitability in our Cannabis Operations by 2024," Tyler Robson, SNDL's president of cannabis said. "This initiative reinforces SNDL's commitment to long-term sustainable cash flow through streamlined manufacturing operations and reduced reliance on high-cost cultivation, ensuring we deliver on both our customer and shareholder promise."

What's Next

In connection with the closing of the Olds facility, SNDL expects to record any related non-cash impairment charges during the fourth quarter of 2023.

"Through our facility reorganization, we expect to capture increased margins from more sustainable fixed operating costs and leverage strategic procurement opportunities to achieve material cost reductions," Robson continued.

The Atholville facility will continue to focus on cultivation, research and development, and supply chain efficiencies to realize additional cost savings while ensuring no disruptions to the availability of SNDL's current product portfolio.

SNDL expects to expand its operations in Atholville in line with this strategic transition.

SNDL Price Action

SNDL's shares traded 0.02% lower at $1.4897 per share during the pre-market session on Friday morning.

Missed the first wave of cannabis investments? Don’t make that mistake again.
Experts believe cannabis stocks have found their floor and are now poised for unprecedented growth. Join Benzinga PotProfits. Benefit from Michael Berger’s sharp analysis, revealing top cannabis stock opportunities and timely updates. Experience the potential of 10%+ returns in just 90 days. Our 4.5-star Marketfy rating speaks volumes. Secure your position in this booming sector with a 30-day money-back guarantee. The time to invest is now before everyone else realizes it. Secure your profits with Benzinga. Click here now to learn more.

Related News

• Michigan's Skymint Acquired Out Of Receivership
• New Cannabis Industry Player Gets Into The Game As Another Weed Business Rethinks Strategy
• Sundial, Canopy Growth And More: Analyst Examines The Race For The US Cannabis Market

Photo: Courtesy of Hvoenok and GOR Photo on Shutterstock