With the cuts, 33 percent of corporate employees will be let go and operational positions will be reduced by about 13 percent.
The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF) is the latest in a growing number of Canadian cannabis firms to slash its staff in an effort to increase profits.
After the end of trading on Tuesday (February 11), the Ontario-based cannabis producer said it is planning to cut a total of 15 percent of positions across the organization.
With the cuts, about a third of its corporate employees will be let go as the firm focuses on “near-term revenue generating opportunities and creating a more nimble and effective corporate structure,” Supreme said in a release. Operational positions will be reduced by about 13 percent.
“Recent staff reductions were an extremely difficult decision for myself and the Board,” Interim CEO Colin Moore said in a statement, “but I believe them to be necessary to create a more agile, focused and profitable organization for the long-term benefit of all of Supreme Cannabis’ stakeholders.”
The company has taken some significant hits in the open market in 2020. Year-to-date, Supreme is down over 35 percent, opening on Wednesday (February 12) at a price per share of C$0.44. Over the past year, Supreme has slipped dramatically by nearly 77 percent.
Sundial Growers (NASDAQ:SNDL) has streamlined its team as well, confirming late last month that it was cutting less than 10 percent of its workforce at its operations in Alberta in response to difficult market conditions and slow store rollouts, a complaint shared by several cannabis firms in Canada.
Supreme said that, along with the cuts, it’s planning on rationalizing its vendor contracts and support services.
It’s all a part of a broader optimization plan on the part of the firm that was announced in January; it involves rightsizing production and reducing capital expenditures while Supreme focuses on the Canadian market. The beginning of the shift to profitability also came with the departure of previous CEO Navdeep Dhaliwal, who was succeeded by Moore, the former president of Starbucks Canada.
While it targets the industry at home, Supreme plans on dropping its investment in its UK and European cannabis investment platform, Supreme Heights. It will hold onto some of its other international assets with its Truverra business and investment in Lesotho-based medical cannabis producer MG Health.
Supreme will announce its financial results for the second quarter of its fiscal 2020 year after the end of the trading session on Thursday (February 13).
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Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.