Canopy Growth Cuts Operations In Canada To Streamline Operations, Improve Margins

After a series of layoffs in April and September, Canopy Growth Corp. (TSX: WEED) (NASDAQ: CGC) confirmed Wednesday additional changes to its Canadian operations.

The Smith Falls, Ontario-based company opted to shut down operations at its sites in St. John’s, Newfoundland and Labrador; Fredericton, New Brunswick; Edmonton, Alberta; and Bowmanville, Ontario.

The move would impact roughly 220 employees and “streamline its operations and further improve margins,” Canopy noted.

In addition, the company also said it would also terminate its Saskatchewan-based outdoor cannabis grow operation.

Canopy CEO David Klein said that this would bring them closer to achieving between $150-$200 million of cost savings and also profitability, as reported in its latest earnings report.

Canopy hit record quarterly net revenue of CA$135 million for the second quarter of fiscal 2021, posting a net loss of CA$97 million for the period.

Moreover, the company anticipates posting total pre-tax charges of approximately $350-400 million in the third and fourth quarters of the ensuing fiscal year.

“This was a difficult decision, but I believe it is the right one,” Klein continued adding that they are “confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand."

Courtesy image