Ontario-based Canopy Growth announced that it is closing an indoor grow facility in Yorkton, Sask., eliminating six full-time jobs in the region. The announcement outlined several changes to global operations intended to realign the company with supply and demand, and optimize production, including the decision to cease farming in New York state, transfer ownership of all African operations to a local business, and cease cultivation in Columbia. Altogether, this will result in the loss of 85 full-time positions.
Yorkton Mayor Bob Maloney is disappointed with the decision to close the facility, but understanding.
“There were plans, at one point in time, to have a huge expansion,” he told local radio station 620 CKRM The Source, “but I think economic realities and supply versus demand have dictated otherwise.”
While he is concerned about what effect it might have on the local economy, there is a small silver lining for ousted workers. According to Maloney, employees will be offered a job at the facility in Edmonton.
Saskatchewan cannabis consumers only spent $38 million in the first year of legalization, compared to $195 million in Alberta and $56 million in Manitoba, so it may come as no surprise that Canopy chose to close the facility as a part of its plan to “further align production in Canada with market conditions.”
After recruiting new CEO David Klein in January, Canopy Growth started trimming the fat from its business and production processes. In March of this year, Canopy closed two facilities in BC, resulting in the loss of 500 positions, and cancelled plans to open a third greenhouse in Niagara-on-the-Lake, Ontario.
“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,” said Klein in a press release. “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.”
Canopy continues to expect approximately $700-800 million in the quarter ending March 31, 2020.