Canopy Growth to lay off 35 % of its staff

Canopy Growth, a Canadian cannabis producer, has announced that it is closing its flagship cultivation site in Smiths Falls, Ontario, and cutting 35% from its workforce as part of a shift to an «asset-lighting model» in Canada.

The news comes after the company reported a net loss of over $260 million in its last quarter. It also follows the Canopy withdraws from the Canadian retail market and the closure of its Scarborough research center. The company says it expects to achieve savings of up to $160 million over the next 12 months.

The restructuring will result in a significant reduction in production and headcount, with 800 positions affected immediately. Canopy says it intends to lay off around 60% of its payroll.

Following the closure of Smiths Falls, the company is discontinuing the cultivation of cannabis flower at its Ontario facility. It will also cease sourcing cannabis flower from a facility in Mirabel, Quebec, and move to a third-party sourcing model for cannabis beverages, edibles, vapes and extracts.

«Canopy must achieve profitability to realize our ambition of long-term leadership in the North American cannabis market. We are transforming our Canadian business into a low-asset model and significantly reducing the overall size of our organization. These changes are difficult but necessary to drive our business toward profitability and growth,» said David Klein, CEO of Canopy.

Klein was Canada's highest-paid CEO in 2020, according to a report published last year by the Canadian Centre for Policy Alternatives. His total compensation topped $45 million, while the company reported a net loss of $1.3 billion in 2022.

In the first quarter of its 2023 fiscal year, the company reported a loss of $2.1 billion, including $1.7 billion in write-downs.

In his fiscal 2022 report, Klein said the company was moving away from low-priced products in favor of «premium brands» and focused on expanding its footprint in the United States.

The company has launched a US-domiciled holding company, Canopy USA, to »accelerate entry into the US cannabis market» and hold the company's US investments.

The company has acquired a number of leading American brands, including the manufacturer of’edibles Wana, California-based Jetty Extracts and Acreage Holdings, a multi-state cannabis grower and retailer.