Canopy Growth’s Transformation Plan to Achieve Long-Term Growth and Profitability
Canopy Growth Corp. has announced that it will lay off 800 workers as part of its transformation plan. According to Canopy Growth’s CEO, David Klein, the layoffs are necessary to drive the business to profitability and growth. The company is transforming its Canadian business to an asset-light model and reducing the overall size of its organization.
Closing of 1 Hershey Facility and Consolidation of Cultivation Operations
As part of the transformation plan, Canopy Growth will wind down operations at its 1 Hershey facility in Smiths Falls, which has been the company’s headquarters and main site for flower and edibles production. The company will consolidate its cultivation operations at its Kincardine, Ont. and Kelowna, B.C. sites. The post-production flower activity previously carried out at 1 Hershey will be completed at the nearby 99 Lorne St. facility.
More Flexible Sourcing Strategy and Partnership with EXKA
Canopy Growth will adopt a more flexible sourcing strategy, moving away from purchasing pot from its Quebec-based joint venture, Les Serres Vert Cannabis Inc., and focusing on ensuring Quebec-grown products are available to consumers in the province. The company will focus on producing flower, pre-rolls, softgels, and oils internally, while relying on third-party providers for vapes, beverages, edibles, and extracts. Additionally, Canopy will partner with Quebec-based EXKA to manage its genetics program, which will help preserve Canopy’s investments in genetics while also providing optimized strains and new cultivars.
Response to Industry Challenges and Cost-Cutting Plan
The transformation plan comes after several years of Canadian pot companies, including Canopy, slashing workforces and tightening operations to reach profitability. The move toward profitability has been challenging given the strength of the illicit market, a slow move toward federal legalization in the U.S., and underwhelming sales in the industry. Canopy is now refocusing its product mix on the premium sector and implementing a cost-cutting plan, involving facility retooling, procurement strategy review, and third-party professional and office fee reduction, to improve its competitiveness and financial position.
Let’s just say that the cannabis industry is completely messed up, and the only people getting money are the fucking government and the idiotic OCS, who mark up the product by $6 per unit and sell it to me. Being in the retail small business is difficult, and if you don’t have ten outlets, you’re in trouble. If you didn’t know, big chain stores are selling your information and taking money from the LPs to sell the things.
I actually don’t care if Canopy goes bankrupt since they’re buying property all over the world in the hopes that cannabis would be legal there someday.