Canopy Grow Facility Announces Lay-Offs

Canopy Grow Facility Announces Lay-Offs

Ontario-based Canopy Growth on March 4 announced plans to shutter two cultivation facilities in British Columbia resulting in the layoffs of some 500 employees. In addition to shuttering 3 million square feet of greenhouses in BC, the company also said it is dropping plans to open a greenhouse in Ontario.  Rethinking The Demand Forecast  Canopy Growth‘s CEO David Klein admitted to over-optimistic market projections in announcing plans to shut the 1.7-million-square-foot greenhouse in the town of Delta and a 1.3-million-square-foot greenhouse in Langley.  The two facilities, purchased in early 2018 for $400 million Canadian, make up two-thirds of Canopy’s total licensed operations.  “Following a strategic review of production capacity and forecast demand, the company announced today that these facilities are no longer essential to its cultivation footprint,” Klein said in a statement to the Vancouver Sun.  “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,” added Canopy in a statement quoted by CNN Business. “Additionally, federal regulations permitting outdoor cultivation were introduced after the Company made significant investments in greenhouse production.”  Health Canada issued new regulations allowing outdoor cultivation in June 2018, in what the Globe & Mail called “a new, cheaper source of competition to established indoor producers.”  Deepak Anand, CEO of the Toronto medical cannabis firm Materia Ventures, told the Vancouver Sun he expected more companies to opt for cheaper outdoor cultivation in response to diminishing market expectations.  “Companies looking to save on capital, or…

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