Two large Canopy Growth greenhouses were closed in Delta and Aldergrove, B.C. on Wednesday, leaving approximately 500 people without jobs, according to a statement by the Canadian cannabis provider. The two facilities consisted of about three million square feet of production space.
The company will also be stopping all plans for building a third greenhouse in Niagara-on-the-Lake. Canopy blames the closures on changes in federal law pertaining to outdoor commercial cultivation and slow growth in the recreational market.
The announcements come just a few months after Mark Zekulin resigned as CEO and respected investor David Klein was appointed to the position.
“When I joined Canopy Growth earlier this year, I committed to focusing the business and aligning its resources to meet the needs of our consumers. Today’s decision moves us in this direction, and although the decision to close these facilities was not taken lightly, we know this is a necessary step to ensure that we maintain our leadership position for the long-term.” — CEO David Klein, in a press release
According to some market analysts, Canopy Growth’s revenue is expected to reach $424.2 million CAD in 2020 and $725.8 million CAD in fiscal 2021. The publicly-traded company expects to lose around $700-800 million CAD from the employee layoffs in the quarter ending March 31, 2020. Also, they reported an EBITDA of 91.7 million Canadian dollars in the last fiscal quarter.
They are not expected to reach positive EBITDA by 2021 but the amount of debt is expected to continue shrinking exponentially at that time.
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