The company will move to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts.
February 10, 2023 By Canopy Growth
Canopy Growth has announced that it will permanently close its headquarters in Smith Falls, Ontario. The company will also immediately start reducing its staff headcount by 60 per cent. Roughly 40 per cent of those layoffs will take place right away, resulting in the immediate dismissal of 800 workers.
The changes come in addition to multiple cost reduction activities within FY2023, including the divestiture of Canopy Growth’s Canadian retail operations, the organizational restructuring of certain corporate functions, and the closure of the Scarborough, Ontario, research facility. As part of the announced changes, Canopy will also discontinue the sourcing of cannabis flower from their Mirabel, Quebec facility, and will move to third-party sourcing model for cannabis beverages, edibles, vapes, and extracts.
Management expects these cost reduction initiatives will reduce the annual cost of goods sold (COGS) and selling, general & administrative (SG&A) expenses by a combined $140-$160 million over the next 12 months, bringing the total cost reduction target to $240-$310 million.
“Canopy must reach profitability to achieve our ambition of long-term North American cannabis market leadership. We are transforming our Canadian business to an asset-light model and significantly reducing the overall size of our organization. These changes are difficult but necessary to drive our business to profitability and growth,” says David Klein, chief executive officer of Canopy.
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