(This is a developing story and will be updated as more information becomes available. )

Canopy Growth is ceasing more cannabis cultivation in Canada, Colombia, South Africa and the United States in a bid to “improve efficiencies” in its global operations, the once high-flying marijuana giant said Thursday.

The Smiths Falls, Ontario, company also said it is 85 full time positions.

Almost half of the workforce reduction is coming from its Colombian operations, Marijuana Business Daily has confirmed.

Canopy expects to incur a charge of up to 800 million Canadian dollars ($566 million) in the fourth quarter, it said in a press release.

Africa

Canopy Growth says it entered into an agreement to exit its operations in South Africa and Lesotho.

The company expects to transfer ownership of all of its African operations to a local business in the coming weeks.

Financial terms were not disclosed.

Canopy entered the African market in May 2018 with acquisition of Daddy Cann Lesotho, spending almost 30 million Canadian dollars ($21.5 million). 

Canada

As part of the downsize, Canopy is closing another cultivation facility in Canada.

Its indoor facility in Yorkton, Saskatchewan, will be shut down “to further align production in Canada with market conditions.”

Canopy acquired rTrees Producers Limited – renamed Tweed Grasslands – in April 2017. 

Total financial consideration of that acquisition was CA$31 million, according to a regulatory filing.

The rTrees’ facility consisted of 90,000 square feet in Yorkton, Saskatchewan at the time of the transaction, with the capacity to expand to over 300,000 square  feet.

Colombia

Canopy also says it will cease cultivation operations at its facility in Colombia and move to an “asset light model.”

Through Canopy LATAM, the Canadian firm acquired Colombian Cannabis S.A.S. (renamed Spectrum Cannabis Colombia S.A.S.) in July 2018.

The maximum value of the transaction was CA$61.3 million, pending four milestones. It is not clear whether the milestones were achieved.

Niklaus Schwenker, director of communications of Canopy Growth Latin America, told Marijuana Business Daily: “This was not an easy decision and the change will impact less than 40 of our team members and we are working with each employee to build a plan for how to manage this transition respecting them, their service, and this difficult global moment.”

Canopy expects to continue operating in Colombia is through an ongoing agreement with Procaps, sourcing existing raw material supply from existing cultivators.

Procaps produces over-the-counter medicines and nutritional supplements for a number of international companies, exporting to dozens of international markets.

“Leveraging added Colombia based raw material, we are continuing our contribution to the development of Colombia as a LATAM production hub and supporting the advancement of Colombia’s medical cannabis industry,” Schwenker said.

Canopy says Colombia will remain its production hub.

This is not the first downsize for Canopy in Latin America.

In November 2019, MJBizDaily reported that about 15% of the workforce in the region had been laid off.

United States

Canopy also says it is ceasing its farming operations in Springfield, New York, “due to an abundance of hemp produced in the 2019 growing season.”

“The company will continue using this supply to produce hemp-derived CBD products for the U.S. market,” its press release states.

The current downsize didn’t affect Europe, Christian Goertz, Director of Corporate Communications Europe, told MJBizDaily.

“When I arrived at Canopy Growth in January, I committed to conducting a strategic review in order to lower our cost structure and reduce our cash burn,” Canopy CEO said in a statement.

“I believe the changes outlined today are an important step in our continuing efforts to focus the Company’s priorities, and will result in a healthier, stronger organization that will continue to be an innovator and leader in this industry.”

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Originally posted on via Cannabis Industry News