Pot producer Canopy to cut 250 jobs in profitability bid
2022.04.27 01:41
FILE PHOTO: A sign featuring Canopy Growth Corporation’s logo is pictured at their facility in Smiths Falls, Ontario, Canada, January 4, 2018. REUTERS/Chris Wattie
(Reuters) – Canopy Growth (NASDAQ:CGC) Corp said it would lay off about 250 employees as part of a cost-cutting plan as the Canadian pot producer tries to achieve long-elusive profitability.
Most Canadian marijuana companies have struggled to turn a profit despite more than three years of cannabis legalization due to fewer-than-expected retail stores, cheaper rates on the black market and sluggish overseas growth.
That has piled pressure on companies to slash expenses, with Canopy saying on Tuesday that it would also reduce costs by lowering how much it spends on cultivation of weed.
The moves are expected to yield cost-savings of between C$100 million and C$150 million ($77.98 million and $116.99 million) within 12 to 18 months.
Yet the company, which lost C$67.4 million in the third quarter, did not set a new timeline for turning profitable.
Canopy said it expected to take charges of C$250 million to C$300 million in the fourth quarter, most of which would relate to the write-down of excess inventory.
It also expects to incur between C$100 million and C$250 million in impairment charges, largely driven by goodwill and intangible asset impairments.
The company had 3,259 employees, including 2,362 full-time employees in Canada, as of March 2021.
($1 = 1.2822 Canadian dollars)
