An ongoing trend in the Canadian cannabis industry continues with another producer announcing new layoffs.
Leading Canadian cannabis producer Aurora Cannabis (NASDAQ:ACB,TSX:ACB) confirmed it plans to let go of an undisclosed number of workers as part of its cost-cutting measures.
Meanwhile, another cannabis producer announced a purchase plan for assets belonging to a fellow producer that is currently struggling. Keep reading to find out more cannabis highlights from the past five days.
Aurora to let go of 12 percent of workers
A report from the Canadian Press indicates that Aurora will lay off 12 percent of its workforce. A company spokesperson said the staff cuts will help the company save between C$70 million and C$90 million.
Aurora revealed its plans for continued cost-saving initiatives as part of its most recent quarterly results.
“Our plan is working and we remain firmly on track to achieving a positive Adjusted EBITDA run rate by the first half of fiscal 2023,” CEO Miguel Martin said.
At the time, Aurora said it expected to save on expenses by way of “asset consolidation, operational and supply chain efficiencies, and other reductions in (selling, general and administrative expenses) expenses.”
The cannabis producer has announced facility closures and other reductions in costs as it attempts to reach a positive flow in its finances. This trend has affected most of the bigger cannabis firms in Canada.
Sundial pursuing distressed cannabis assets
Among the assets Sundial is pursuing are an indoor facility in New Brunswick and other facilities that are currently decommissioned.
“The (New Brunswick) facility received EU GMP certification, providing a license to the facility to export internationally to Israel, Malta, the United Kingdom, and the EU,” Sundial said.
According to financial documents from cannabis firm HEXO (NASDAQ:HEXO,TSX:HEXO), which owns Zenabis, Zenabis was responsible for C$11.1 million in net revenue during its latest fiscal quarter.
"We are committed to creating continuity for the Zenabis Group's operations and employees and assisting Zenabis in good faith with its restructuring,” Sundial CEO Zach George said. “This process has just begun, and we will provide more information as it becomes available."
Cannabis company news
- Organigram Holdings (NASDAQ:OGI,TSX:OGI)told shareholders it has reached a settlement as part of a class-action lawsuit related to a medical cannabis recall in December 2016 and January 2017. The firm will pay C$2.3 million, which it said it already accrued in previous fiscal year.
- Avicanna (TSX:AVCN,OTCQX:AVCNF)sold its Colombian subsidiary Sativa Nativa for approximately C$675,000 with an additional C$130,000 pending “specific short-term milestones.” Lucas Nosiglia, president of Avicanna LATAM, said this decision will increase efficiencies along its supply chain and allow the company to refocus on its core business.
- The Valens Company (NASDAQ:VLNS,TSX:VLNS)secured an integrated logistics solution with Coldhaus Distribution. “Having a major partner like Coldhaus we believe will help accelerate our growth in key markets and create long-term meaningful relationships with retailers and consumers throughout the distribution territory as we increase visibility of our branded cannabis products,” Tyler Robson, CEO of Valens, said.
- The Flowr Corporation (TSXV:FLWR,OTC Pink:FLWPF)confirmed a staff reduction of 40 percent, adding C$4 million in costs. Additionally, the firm sold Flowr Forest, a “non-core asset,” for C$3.4 million. “These cost cutting measures and sale of non-core assets are vital to getting the company to profitability,” said Tom Flow, interim CEO of Flowr.
Don't forget to follow us @INN_Cannabis for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.