News

SNDL cuts 85 employees, now expects ‘record net revenue’

Published on February 14, 2023 by oz. staff

Photo: Google Maps

Alberta-based SNDL has announced it will be ‘rightsizing’ its operations by cutting 85 employees at one of its cannabis growing facilities.

The cost-cutting measures at its facility in Olds, Alta., come weeks after the company closed its purchase of The Valens Company. SNDL says it’s making an effort to focus the facility on premium products and brands.

Its acquisition of Valens has “accelerated the need to optimize and rationalize SNDL’s manufacturing and operational footprint to better address market saturation and oversupply,” says SNDL.

The ‘headcount reduction’ is part of the company’s effort to find $9 million in savings across its labour and operational costs.

SNDL CEO Zach George estimates more than one billion grams of flower are sitting in Canadian vaults today.

“Oversupply and excess capacity have resulted in high-quality flower being widely available and sold well below the marginal cost of production,” says George.

With fewer employees now on the payroll, SNDL says it expects to report record net revenue and net cash provided by operating activities for the fourth quarter of 2022.

  • RELATED: Extensive coverage of The Valens Company on the oz.

SNDL officially acquired Kelowna-based Valens last month in an all-stock deal worth about $138 million. It also took on the company’s $60 million in debt.

The acquisition gave SNDL three manufacturing facilities in Kelowna, including LYF Edibles and two large-scale Valens’ cannabis manufacturing, packaging, and extraction facilities in the industrial park on the Kelowna-Lake Country border.

The company has since been integrating its assets and teams.

The deal gives SNDL, one of the country’s major retailers with 180 Spiritleaf and Value Buds stores, wide-scale white label manufacturing capability to make and sell in-house brands.

SNDL’s cannabis brand portfolio includes Top Leaf, Contraband, Citizen Stash, Sundial Cannabis, Palmetto, Bon Jak, Spiritleaf Selects, Versus Cannabis, Value Buds, Vacay and Grasslands.