Staff work in a marijuana grow room that can be viewed by at the new visitors centre at Canopy Growth's Tweed facility in Smiths Falls, Ont., Thursday, Aug. 23, 2018. Canopy Growth Corp. says it is ceasing operating at five facilities across the country and laying off 220 workers. THE CANADIAN PRESS/Sean Kilpatrick

Canopy Growth to close five facilities across Canada, lay off 220 workers

TORONTO — Canopy Growth Corp. will cease operations at five facilities across the country and lay off more than 200 workers — the latest in a series of dramatic cuts the cannabis company and several others have made this year.

Smiths Falls, Ont.-based Canopy said Wednesday that it will end operations at sites in St. John’s, Fredericton, Edmonton, Bowmanville, Ont. and at an outdoor grow facility in Saskatchewan.

The closures will impact 220 employees, but save the company between $150 million and $200 million and accelerate its path to profitability, Canopy chief executive David Klein said in a release.

“This was a difficult decision, but I believe it is the right one,” he said.

“I want to thank all of the employees impacted by this decision for their efforts in helping build Canopy Growth.”

Canopy’s cuts have come in a year in which many cannabis companies, including competitors Aurora Inc. and Tilray Inc., have announced mass layoffs, facility closures and multimillion-dollar writedowns.

The COVID-19 pandemic only exacerbated matters by causing the temporary closure of cannabis stores in virus hot spots and forcing companies to shell out for masks, hand sanitizer, Plexiglas barriers and other protective measures.

Amid the pandemic, Klein took a dive into Canopy’s finances and rethought its first-to-every-market strategy.

He laid off at least 800 staff by May, and made additional cuts throughout the summer and fall.

He also announced the company would take up to $800 million in writedowns, a total he added to on Wednesday when he said Canopy will record pre-tax charges of between $350 million and $400 million in the third and fourth quarters of its fiscal 2021.

The new cuts will impact about 17 per cent of the company’s enclosed facilities in Canada and 100 per cent of its outdoor sites, which can produce cannabis at much lower prices than indoor ones.

Canopy first got into outdoor growing last year with a test crop in Saskatchewan, but returned to the method this year with hopes of using its crop on edibles, cannabis beverages and vaporizer pens.

Adam Greenblatt, a former senior communications adviser with Canopy, previously extolled the virtues of outdoor growing, saying it slashes electricity bills and reduces labour costs.

With the Saskatchewan site closing, Klein said, “We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand.”

His remarks pushed Canopy’s stock down 4.6 per cent or $1.71 to reach $35.18 in afternoon trading on the Toronto Stock Exchange.

Earlier this year, competitor Aurora also ceased operations at about six facilities in Saskatchewan, Ontario, Alberta and Quebec and cut at least 1,200 workers.

Tilray shed at least 10 per cent of its workforce and Sundial Growers and Zenabis Global Inc. also faced reductions.

The cuts have come as Canada is still grappling with how to eliminate the illicit market and companies are trying to entice reluctant consumers and build loyalty with new categories of edibles like beverages.

But just as Canopy was announcing its cuts, its global head of beverages posted on LinkedIn that he is leaving the company and heading to Google Canada’s marketing team.

Andrew Rapsey wrote, “I’m incredibly grateful for the teammates at Canopy Growth Corporation and excited to see how the drinks business evolves in the next six to 12 months.”

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The Town of Ponoka and the Alberta Union of Provincial Employees (AUPE) have ratified a new agreement, averting a strike. (File photo from Facebook)
Alberta gov’t ‘using pandemic as shield to lay off workers,’ says AUPE

The Government of Alberta’s “attacks on workers” is continuing with a new… Continue reading

Rocky Mountain House RCMP, EMS, Search and Rescue, STARS air ambulance and Alstrom Helicopters worked together to rescue a fallen ice climber Friday. (Photo contributed by Rocky Mountain House RCMP)
Rocky Mountain House RCMP help rescue fallen ice climber

Rocky Mountain RCMP helped assist a fallen ice climber Friday afternoon. At… Continue reading

Students Association of Red Deer College president Brittany Lausen says she’s pleased the college is offering students a choice to attend class in-person or remotely. (Red Deer Advocate file photo)
Red Deer College winter term enrolment dips

Enrolment down about six per cent but mix of online and in-person instruction is going over well

Brett Salomons, of Salomons Commercial, and Mark Jones, CEO of the Central Alberta Child Advocacy Centre, in the CACAC's new temporary home. (Contributed photo)
Central Alberta Child Advocacy Centre’s One Day Challenge returns

Central Alberta Child Advocacy Centre has announced its One Day Challenge is… Continue reading

Dwayne Buckle, 40 of Red Deer finished a 1,638-kilometre walk, in honour of his family. The 12-week, 82 day-journey wrapped up in Port Hardy, B.C. on Monday. Facebook photo
Red Deer man completes 1,638 km hike for cancer research

Dwayne Buckle, a Red Deer firefighter returned home Friday after his 12-week journey

A Suncor logo is shown at the company's annual meeting in Calgary, Thursday, May 2, 2019. THE CANADIAN PRESS/Jeff McIntosh
Body of worker whose bulldozer fell through ice on inactive tailings pond recovered

FORT MCMURRAY, Alta. — Oilpatch giant Suncor says the body of a… Continue reading

A restaurant manager in Orlando used a sign to secretly ask an 11-year-old boy if he needs help from his family after they were spotted withholding food from him. (Photo courtesy Orlando Police Department)
WATCH: Restaurant manager uses secret note to ‘rescue’ child, says Orlando Police

The manager of an Orlando restaurant is receiving praise from police after… Continue reading

Tourists take photographs outside the British Columbia Legislature in Victoria, B.C., on Friday August 26, 2011. A coalition of British Columbia tourism industry groups is urging the provincial government to not pursue plans to ban domestic travel to fight the spread of COVID-19. THE CANADIAN PRESS/Darryl Dyck
B.C. travel ban will cripple struggling tourism sector, says industry coalition

VICTORIA — A coalition of British Columbia tourism industry groups is urging… Continue reading

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Provinces work on revised plans as Pfizer-BioNTech shipments to slow down

Quebec and Ontario, the two provinces hit hardest by the COVID-19 pandemic,… Continue reading

The RCMP logo is seen outside Royal Canadian Mounted Police "E" Division Headquarters, in Surrey, B.C., on Friday April 13, 2018. A young snowshoer who set out alone on a rugged mountain trail on Vancouver's north shore Thursday has died. THE CANADIAN PRESS/Darryl Dyck
Snowshoer dies after overnight search on Vancouver-area mountain: RCMP

SQUAMISH, B.C. — A snowshoer who set out alone on a rugged… Continue reading

nunavut
‘It was joyous:’ Sun returns to some Nunavut communities for first time in weeks

IQALUIT — A sliver of orange rose over Cambridge Bay, Nunavut, earlier… Continue reading

People take photos through the extensive security surrounding the U.S. Capitol in Washington, Friday, Jan. 15, 2021, ahead of the inauguration of president-elect Joe Biden and vice-president-elect Kamala Harris. THE CANADIAN PRESS/AP-Susan Walsh
Less pomp, very different circumstances as D.C. prepares to inaugurate Biden, Harris

WASHINGTON — Some pomp. Very different circumstances. Inauguration day is supposed to… Continue reading

Winnipeg Jets' Nathan Beaulieu (88) and Nikolaj Ehlers (27) defend against Jansen Harkins (12) during scrimmage at their NHL training camp practice in Winnipeg, Wednesday, January 6, 2021. THE CANADIAN PRESS/John Woods
Winnipeg Jets cancel practice due to possible COVID-19 exposure

WINNIPEG — The Winnipeg Jets have cancelled their practice today due to… Continue reading

Most Read