Canopy Growth Corp. has laid off 500 workers and shut down two of its biggest greenhouses in British Columbia, in a move to “improve production efficiencies” as the legal cannabis industry wrestles with an oversupply of cannabis, supply chain hiccups and ever-changing consumer preferences.
“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,” said Canopy Growth chief executive David Klein. “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.”
The company also said it would no longer go forward with plans to open another greenhouse in Niagara-on-the-Lake, Ont., as part of an overall effort to “align supply and demand.”
Under the guidance of former CEO Bruce Linton, Canopy had purchased the Niagara property for $9 million in September 2017. Six months later, the company spent $400 million to purchase the B.C. greenhouses in Delta and Aldergrove, hiring hundreds of workers — mostly new immigrants and temporary foreign workers.
The pot company had hoped for the “BC Tweed” facilities, as they were known, to generate the bulk of supply to its processing headquarters in Smiths Falls, Ont. But when the Financial Post visited Canopy’s Aldergrove facility a year ago, it appeared under-utilized. Sources told the Post at the time that the greenhouse was struggling to scale up and battling various growing issues.
A year later, Canopy appears to have the opposite problem — it sits on more than $600 million in inventory, and even acknowledged an oversupply problem in its most recent earnings call.
The Aldergrove facility was also the subject of numerous complaints from residents in the area made to the B.C. Farm Industry Review Board about the strong cannabis smell it emitted, and constant bright lights.
These facilities in Aldergrove and Delta are no longer essential to (our) cultivation footprint
Canopy Growth statement
“Following an organization strategic review of production capacity and forecasted demand, the company announced today that these facilities in Aldergrove and Delta are no longer essential to its cultivation footprint,” read a statement released Wednesday evening.
“It was absolutely necessary that Canopy Growth right-size its growing operations to better fit the size of the cannabis market in Canada,” said Chris Damas, an independent cannabis industry analyst and author of The BCMI Report.
“The company sold only 44 per cent of its harvested cannabis in the past quarter…. Production was bound to jump this spring and summer, yet we estimate only 500 tonnes will be required in 2020. Canopy was on track to grow more than this amount with the current facility slate,” he added.
A worker at Canopy Growth in Aldergrove, B.C.
Mark Yuen/Postmedia
Canopy added that it intends to rely more on outdoor production for “cost-effective cultivation” of cannabis extracts in particular, following the legalization of vape pens, edibles and topicals last October.
The company also announced it would take a $700 million to $800 million pre-tax charge for the quarter ending March 31, 2020 due to the layoffs and greenhouse closures as well as “additional changes related to its organizational and strategic review.”
“We believe the production from Canopy’s other facilities, including two sizeable greenhouses in southern Ontario and Quebec, as well as biomass purchases from other LPs should provide sufficient supply for the company,” wrote BMO cannabis analyst Tamy Chen in a note to clients.
Chen said the shutdowns and layoffs would “meaningfully reduce” Canopy’s quarterly cash burn.
Canopy is the latest in a string of cannabis companies to retrench by cutting staff and taking major writedowns related to their operations, as the cannabis industry’s growth sputters to a halt due to a combination of investor over-exuberance, weak product quality, high prices and stringent government regulation. Last month, Tilray Inc. and Aurora Cannabis Inc. each laid off 10 per cent of their respective workforces.
Aurora, too, temporarily shut down a flagship greenhouse in Medicine Hat and sold off another massive facility in Exeter, Ont. at a loss late last year.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
