Canopy Growth says slow development of Canada's cannabis industry created profitability challenges
Joel Ballard · CBC News · Posted: Mar 04, 2020 2:27 PM PT
Canopy Growth says it will soon close two of its greenhouses in B.C. resulting in the loss of 500 jobs. (Sean Kilpatrick/The Canadian Press)
Around 500 employees of a major cannabis production company will soon lose their jobs as the company announced plans to close the doors at two of its facilities in the Lower Mainland.
Canopy Growth announced its decision Wednesday to close greenhouses in Aldergrove and Delta.
The company says it was a difficult decision but one that needed to be made to better align its supply of cannabis with demand across the country.
The facilities were opened in February of 2018 in anticipation of its need to scale up supply for B.C. and Canada's new recreational-use market.
"Nearly 17 months after the creation of the legal adult-use market, the Canadian recreational market has developed slower than anticipated, creating working capital and profitability challenges across the industry," David Klein, CEO of Canopy Growth, said in a statement.
"These facilities are no longer essential to [our] cultivation footprint."
Klein also said that outdoor production sites allow for more cost-effective growth of marijuana but the federal government only approved outdoor cultivation after the company had already invested in the greenhouses.
The company expects a pre-tax charge of up to $800 million in its latest quarter, due in part to the closures.