Cannabis giant Canopy Growth is economizing and taking far-reaching measures

by Team Inc.

2020-04-17-Cannabis giant Canopy Growth cuts back and takes drastic measures

(CNN Business) Canopy Growth's latest efforts to reduce its global cannabis business include closing an American hemp farm and leaving Africa, the company announced Thursday.

Like other larger North American cannabis companies, whose growth was much faster than the market they served, Canopy Growth (CGC) is divesting business to dramatically reduce costs and save money. Last month, that meant the closing of 3 million square meters of greenhouses and the layoff of 500 employees.

Stopping activities

The cannabis producer also plans to close an indoor facility in Saskatchewan and a 1000-acre hemp farm in Springfield, New York. The company also wants to shut down its activities in Colombia. These most recent steps lead to the loss of another 85 full-time workers, five of whom worked on the U.S. hemp farm.

“We have made the difficult but necessary decision to close our Waterpoint Hemp Farm in Springfield, New York,” a Canopy Growth spokesperson wrote in an email to CNN Business. "Like many growers in the state, Waterpoint Hemp Farm produced an abundance of hemp in 2019, which is not in line with current market demand or the regulatory delays surrounding hemp extracts."

New branch in New York

The closure will not affect Canopy Growth's plans for a hemp industrial park in Kirkwood, New York, the Canopy Growth spokesperson said. Heralded by lawmakers such as Senator Chuck Schumer, this new manufacturing facility is being touted as a $150 million investment with the promise of hundreds of new jobs. Canopy Growth's plans for this new facility include the processing and extraction of cannabis compounds such as cannabinoids from hemp. The company also hopes to attract other hemp-related entities focused on harnessing other parts of the crop, including seeds and fiber.

Previously, Canopy Growth seemed to make progress on the hemp production facilities, albeit on a smaller scale, Gordon Kniffen, Kirkwood's city supervisor, told CNN Business. Kniffen said he hasn't had contact with Canopy Growth for several weeks. “When I arrived at Canopy Growth in January, I pledged to conduct a strategic review to optimize our cost structure and reduce our cash burn,” said CEO David Klein, a former executive at Constellation Brands (STZ), Canopy Growth's largest investor . “I believe the changes outlined today are an important step in our ongoing effort to focus on the company's priorities. This will result in a healthier, stronger organization that will remain an innovator and leader in this industry. ”

Read more edition.cnn.com (Source, EN)

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