No. 4: Massive layoffs and restructuring
Published on December 28, 2020 by oz. staff
This was a bad year to work for a licensed cannabis producer.
Hundreds of people lost their jobs this year at major LPs, as cannabis growers bled money and tried to limit the damage by shutting down production facilities and shedding employees.
It was often done under the awful phrase, ‘right-sizing.’
Aurora laid off 200 people in December at their flagship Sky facility in Edmonton, where capacity will be cut to 25%. They’ve also indefinitely paused operations at their Medicine Hat operation.
In June, Aurora laid off 700 people as it ceased operations at five facilities in Saskatchewan, Ontario, Alberta and Quebec and consolidated operations at four facilities in Alberta, Ontario and British Columbia.
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Meanwhile, Canopy Growth announced in December the closure of five sites across Canada, laying off 220 people. Operations in St. John’s, Fredericton, Edmonton, Bowmanville, Ont., and Saskatchewan are affected.
In March, Canopy had unveiled what it called a “production optimization plan.” That blueprint included the closure of two greenhouse facilities in Aldergrove and Delta, BC, sending about 500 into unemployment.
In May, Canopy further scaled back, laying off another 200 people in Canada, the US and the UK.
The year wasn’t all doom and gloom. There were also major deals setting the scene for the future growth of corporate cannabis.
Tilray and Aphria announced in December plans to merge, which would create a new biggest cannabis company in the world. The deal is valued at $4 billion.
Aphria CEO Irwin Simon will preside while his counterpart Brendan Kennedy will become a board member. The deal is anticipated to be sealed by the second quarter of 2021. Aphria will pay a 23% premium in an all-stock transaction, which will give Aphria shareholders ownership of 62% of Tilray stock. The newly formed company will keep the Tilray name.
The combined entity will now command 17% of market share in Canada, says Yahoo Finance.
Look for more of these deals as cannabis companies consolidate to compete in an increasingly large global cannabis market.
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