Calgary-based cannabis producer SNDL Inc. has announced it is cutting 85 jobs at its Olds cultivation facility.
“We have made the difficult decision to materially reduce staffing and activity levels in Olds, Alberta, in order to improve the efficiency of our operations as one of Canada’s largest adult-use cannabis manufacturers,” said SDNL chief executive officer Zach George in a recent statement.
“With the Olds facility already in operation when I joined SNDL, I am proud of the cultivation capabilities and high-quality flower that our teams have developed and produced. We estimate that more than 1 billion grams of flower are sitting in Canadian vaults today.
“Oversupply and excess capacity have resulted in high-quality flower being widely available and sold well below the marginal cost of production.”
“Using available and existing biomass, we will be better equipped to leverage the current pricing environment to materially improve our cost of goods sold and margins,” said the statement. “We are taking a proactive approach with our cultivation and manufacturing strategy to evolve with the market while continuing to deliver exceptional products across a variety of product and price segments.”
The Olds job cuts are part of a larger cost savings program that is expected to save $9 million in labour and operational costs for the company formerly known as Sundial Growers Inc.
SNDL says the August 2022 acquisition of Valens Company Inc. in a $138 million deal has accelerated the need to optimize and rationalize SNDL’s manufacturing and operational footprint to better address market saturation and over-supply.
The company expects to report record net revenue and net cash provided by operating activities for the fourth quarter of 2022, with the year-end and fourth quarter of 2022 results expected to be announced at the end of March 2023.
SNDL is the largest private-sector liquor and cannabis retailer in Canada with retail banners that include Ace Liquor, Wine and Beyond, Liquor Depot, Value Buds, Spiritleaf and Superette.