Canopy Growth Announces Changes to Canadian Operations
SMITHS FALLS, ON, Dec. 9, 2020 /PRNewswire/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NASDAQ: CGC) today announced a series of Canadian operational changes designed to streamline its operations and further improve margins.
Canopy Growth will cease operations at the following sites: St. John's, Newfoundland and Labrador; Fredericton, New Brunswick; Edmonton, Alberta; Bowmanville, Ontario; as well as its outdoor cannabis grow operations in Saskatchewan. Approximately 220 employees have been impacted as a result of these closures.
"As part of the end-to-end review of our operations that we outlined during our second-quarter earnings call, we have made the decision to close a number of our production facilities. These actions will be an important step towards achieving our targeted $150-$200MM of cost savings and accelerating our path to profitability. We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand," said David Klein, CEO, Canopy Growth. "This was a difficult decision but I believe it is the right one. I want to thank all of the employees impacted by this decision for their efforts in helping build Canopy Growth."
These decisions are the partial outcome of an ongoing end-to-end review designed to improve the Company's margins. The end-to-end review was announced during the Company's Q2 earnings call and looks at people, process, technology, and infrastructure. The Company expects to record estimated total pre-tax charges of approximately $350-400MM in the third and fourth quarters of Fiscal 2021.
The production sites impacted represent approximately 17% of the Company's enclosed Canadian footprint and 100% of its Canadian outdoor production footprint.
All figures reported above with respect to the third and fourth quarters of Fiscal 2021 are preliminary and are unaudited and subject to change and adjustment as the Company prepares its quarterly and annual financial statements.