Canopy Growth sells 1 Hershey Drive back to candy company
Published on August 17, 2023 by David Wylie
Iconic 1 Hershey Drive in Smiths Falls, Ont., is going back to its chocolaty roots.
Canopy Growth is selling the building, which it purchased in 2017, back to Hershey Canada for $53 million.
“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” says Canopy CEO David Klein, announcing the sale this week.
• RELATED: Canopy slashes workforce, plans closure of 1 Hershey Drive
The struggling cannabis producer lost $3.3 billion over the last fiscal year. The company says it will use net proceeds primarily to pay down debt.
When the company purchased the building, which was sitting idle, it was celebrated as a revitalization for the small Ontario community. However, deep cuts at Canopy have reversed that growth.
The company will keep its post-harvest manufacturing facility in the small Ontario town.
“Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk,” says Klein.
“Once again, we have demonstrated Canopy Growth’s ability to achieve significant organizational and operational change to position the company for future growth in the Canadian market.”
Once the sale is complete, Canopy will have sold seven of its properties for a total of about $155 million since April 1.
Hershey says it was a strategic purchase for the company.
“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” says Jason Reiman, chief supply chain officer at Hershey.
Canopy has centralized its post-harvest manufacturing at the former beverage facility in Smiths Falls and it’s consolidated all flower cultivation in Kincardine, Ont., and West Kelowna, BC.
The company umbrella of cannabis brands includes Doja, 7ACRES, Tweed, and Deep Space.