VANCOUVER (NEWS 1130) — Canopy Growth plans to close two facilities in Delta and Aldergrove, resulting in 500 jobs lost.
The cannabis producing company announced the closures Wednesday, saying the recreational market hasn’t grown as expected since the facilities opened in February 2018.
#BREAKING Pot producer Canopy Growth is eliminating 500 jobs at its greenhouses in Aldergrove and Delta. In a statement, the company says the recreational pot market has developed slower than anticipated. Canopy says that’s creating working capital and profitability challenges.
— Martin MacMahon (@martinmacmahon) March 4, 2020
“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,” says a statement from the company.
Delta Mayor George Harvie says he isn’t surprised by this development but is sending his thoughts to workers who will soon be out of a job.
“Oversupply is now a problem,” he says. “Hopefully there can be a future for converting the greenhouses back to food production because there’s always a market for that.”
The company has also scrapped plans to open a third greenhouse in Ontario.
Outdoor facilities will still be maintained since Canopy Growth says it allows for cost-effective cultivation. The company notes federal regulations allowing the outdoor cultivation of cannabis changed after investments were already made in greenhouse production.
“When I joined Canopy Growth earlier this year, I committed to focusing the business and aligning its resources to meet the needs of our consumers,” CEO David Klein says. “Today’s decision moves us in this direction, and although the decision to close these facilities was not taken lightly, we know this is a necessary step to ensure that we maintain our leadership position for the long-term. Along with the rest of the management team, I want to sincerely thank the members of the team affected by this decision for their work and commitment to building Canopy Growth.”