Aurora Cannabis is shutting down five sites in Canada. CP photo

Aurora Cannabis to lay off staff, close five sites, take impairment charges

EDMONTON — Aurora Cannabis Inc. is making its second round of significant cuts this year as it continues with a restructuring plan meant to address profitability struggles.

On top of layoffs, Aurora has also decided to cease some operations at five facilities — Aurora Prairie in Saskatoon, Aurora Mountain facility in Mountain View County near Cremona, Alta., Aurora Ridge in Markham, Ont., and Aurora Vie and Aurora Eau in Quebec — over the next two quarters.

The Edmonton-based cannabis company announced Tuesday that it will reduce its selling, general and administrative workforce by 25 per cent immediately and another 30 per cent of production staff will be laid off from the company over the next two quarters.

“This has not simply been a cost cutting exercise,” said Michael Singer, Aurora’s executive chairman and interim chief executive.

“We have undertaken a strategic realignment of our operations to protect Aurora’s position as a leader in key global cannabinoid markets, most notably Canada.”

Part of Aurora Vie will remain operational to allow for the manufacturing of certain higher margin items, in line with the company’s decision to focus production and manufacturing at the company’s larger scale and more efficient sites.

By the end of the company’s 2021 second quarter, production and manufacturing at Aurora Sky in Edmonton, Aurora River in Ontario, Whistler Pemberton in British Columbia and Polaris located near the Edmonton International Airport will be consolidated.

The company will also record production asset impairment charges of up to $60 million during its fourth quarter and a charge of up to $140 million in the carrying value of certain inventory.

Singer expects that these moves will improve gross margins and accelerate Aurora’s ability to generate positive cash flow.

“We believe that we now have the right balance for the long-term success of Aurora — market leadership, financial discipline, operational excellence, and strong execution,” he said.

“We remain focused on making Aurora a profitable and robust global cannabinoid company.”

Aurora’s cuts come as the cannabis industry is struggling amid COVID-19, which caused several companies to close their stories to stop the spread of the virus.

Cannabis companies were facing headwinds prior to the pandemic, even as they started rolling out the country’s first legal edibles, beverages and vapes.

Many pot businesses rang in the new year with cuts to staffing and dramatic restructurings that saw facilities close and significant writedowns taken.

In February, Aurora announced it was taking $1 billion in writedowns and would lay off 500 employees as part of a restructuring of its spending plans. The company also said its chief executive Terry Booth was retiring and a search was underway for his successor.

Singer chalked up the moves as being part of retail constraints, evolving consumer demand and provincial distributor inventory management adjustments, but said he remains “extremely bullish” on the long-term potential of the Canadian medical and consumer markets.

Aurora competitor Canopy Growth Corp. was hit with troubles too.

It said in April that it will lay off 85 full-time workers and close its indoor facility in Yorkton, Sask. to align its production in Canada with market conditions.

Canopy also ended farming in Springfield, N.Y., cultivation work at a facility in Colombia and operations in South Africa and Lesotho.

The Canopy cuts came after the company laid off 500 employees, closed some of its greenhouses and took writedowns of between $700 million and $800 million at the start of the year as it dealt with profitability challenges.

Coronavirus

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

Just Posted

Sylvan Lake beachgoers spark safety concerns

‘You’re putting your life at risk,’ tweets Rachel Notley

Conservatives call for Trudeau to testify at committee on WE Charity deal

Ethics Commissioner Mario Dion is already investigating whether Trudeau violated the Conflict of Interest Act

Beat the heat this summer with pop-up spray parks

Starting next week, spray parks will be popping up in neighbourhoods across… Continue reading

Genetic detectives begin work to trace spread of COVID-19 in Canada

The kinds of genetic technology being used for this project did not exist when SARS hit Canada in 2003

Quebec police continue search for father, one day after missing girls found dead

Bodies were found in a wooded area of Quebec City suburb

QUIZ: Are you ready for a summer road trip?

How much do you really know about roads, motor vehicles and car culture? Take this quiz to find out.

Canmore RCMP respond to multiple hiking injury calls this weekend

EMS and RCMP responded to three separate and unrelated hiking accidents in Kananaskis Country.

You can’t put a price on memories

Some people would rather buy something than sell something. Some people are… Continue reading

Masks and gloves: Elections Saskatchewan preparing for pandemic election

REGINA — Elections Saskatchewan estimates it will need 400,000 face masks and… Continue reading

Quebec police say they found 2 bodies in St-Apollinaire during search for 2 girls

SAINT-APOLLINAIRE, Que. — Quebec provincial police continue to search for the father… Continue reading

NHL commissioner Gary Bettman, NHLPA chief Don Fehr reflect on RTP, CBA deals

Gary Bettman and Don Fehr finally have a chance to catch their… Continue reading

NHL’s road to Edmonton and Toronto featured plenty of obstacles

Since early March, the novel coronavirus has affected almost every decision facing… Continue reading

Florida sets record week for coronavirus deaths

FORT LAUDERDALE, Fla. — Florida’s coronavirus death rate rose again Saturday, setting… Continue reading

Trump’s defiant help for Stone adds to tumult in Washington

WASHINGTON — President Donald Trump’s intervention into a criminal case connected to… Continue reading

Most Read