The Company announces the closure of two Canadian
greenhouses, representing a significant step forward in aligning
the Company's cultivation capacity with projected demand.
Company expects to record estimated pre-tax charges of
approximately $700-800MM in Q4 Fiscal
2020, as the Company completes its organizational & strategic
review.
SMITHS FALLS, ON, March 4, 2020 /PRNewswire/ - Canopy Growth
Corporation ("Canopy Growth" or the "Company") (TSX: WEED) (NYSE:
CGC) announced today that the Company plans to close its facilities
in Aldergrove and Delta, British Columbia, resulting in the
elimination of approximately 500 positions. In addition, the
Company no longer plans to bring a third greenhouse online in
Niagara-on-the-Lake, Ontario.
These actions are part of the Company's effort to align supply and
demand while improving production efficiencies over time.
The greenhouses in B.C. account for approximately 3 million
square feet of licensed production space and were put into
commission, beginning in February
2018, after a period of phased retrofitting to help Canopy
Growth scale up to supply the new Canadian adult-use market. Nearly
17 months after the creation of the legal adult-use market, the
Canadian recreational market has developed slower than anticipated,
creating working capital and profitability challenges across the
industry. Additionally, federal regulations permitting outdoor
cultivation were introduced after the Company made significant
investments in greenhouse production. The Company now operates an
outdoor production site to allow for more cost-effective
cultivation, which will play an important role in meeting demand on
certain products that rely on cannabis extracts. Following an
organizational strategic review of production capacity and
forecasted demand, the Company announced today that these
facilities in Aldergrove and
Delta, British Columbia are no
longer essential to its cultivation footprint.
"When I joined Canopy Growth earlier this year, I committed to
focusing the business and aligning its resources to meet the needs
of our consumers," shared Canopy Growth CEO, David Klein. "Today's decision moves us in this
direction, and although the decision to close these facilities was
not taken lightly, we know this is a necessary step to ensure that
we maintain our leadership position for the long-term. Along with
the rest of the management team, I want to sincerely thank the
members of the team affected by this decision for their work and
commitment to building Canopy Growth."
Along with this announcement, the Company expects, based upon
information currently available to management, to record estimated
pre-tax charges of approximately $700-800MM in the quarter ending March 31, 2020 reflecting today's announcement as
well as additional changes related to its organizational and
strategic review.
All figures reported above with respect to the quarter ending
March 31, 2020 are preliminary and
are unaudited and subject to change and adjustment as the Company
prepares its consolidated financial statements for the year ending
March 31, 2020. Accordingly,
investors are cautioned not to place undue reliance on the
foregoing information. The Company does not intend to provide
preliminary results in the future. The preliminary results provided
in this news release constitute "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and "forward-looking information" within the
meaning of applicable Canadian securities legislation, are based on
several assumptions and are subject to a number of risks and
uncertainties. Actual results may differ materially. See "Notice
Regarding Forward Looking Statements".
About Canopy Growth Corporation
Canopy Growth
(TSX:WEED, NYSE:CGC) is a world-leading diversified cannabis, hemp
and cannabis device company, offering distinct brands and curated
cannabis varieties in dried, oil and Softgel capsule forms, as well
as medical devices through Canopy Growth's subsidiary, Storz &
Bickel GMbH & Co. KG. From product and process innovation to
market execution, Canopy Growth is driven by a passion for
leadership and a commitment to building a world-class cannabis
company one product, site and country at a time. Canopy Growth has
operations in over a dozen countries across five continents.
Canopy Growth's medical division, Spectrum Therapeutics is
proudly dedicated to educating healthcare practitioners, conducting
robust clinical research, and furthering the public's understanding
of cannabis, and has devoted millions of dollars toward cutting
edge, commercializable research and IP development. Spectrum
Therapeutics sells a range of full-spectrum products using its
colour-coded classification Spectrum system as well as single
cannabinoid Dronabinol under the brand Bionorica Ethics.
Canopy Growth operates retail stores across Canada under its award-winning Tweed and Tokyo
Smoke banners. Tweed is a globally recognized cannabis brand which
has built a large and loyal following by focusing on quality
products and meaningful customer relationships.
From our historic public listing on the Toronto Stock Exchange
and New York Stock Exchange to our continued international
expansion, pride in advancing shareholder value through leadership
is engrained in all we do at Canopy Growth. Canopy Growth has
established partnerships with leading sector names including
cannabis icons Snoop Dogg and Seth
Rogen, breeding legends DNA Genetics and Green House Seeds,
and Fortune 500 alcohol leader Constellation Brands, to name but a
few. Canopy Growth operates eleven licensed cannabis production
sites with over 7.5 million square feet of production capacity,
including over one million square feet of GMP certified production
space. For more information visit www.canopygrowth.com
Notice Regarding Forward Looking Statements
This news
release contains "forward-looking statements" within the meaning of
the United States Private Securities Litigation Reform Act of 1995
and "forward-looking information" within the meaning of applicable
Canadian securities legislation. To the extent any forward-looking
information in this news release constitutes "financial outlooks"
within the meaning of applicable Canadian securities laws, such
information is being provided as preliminary financial and
operational results for the quarter ending March 31, 2020 and the reader is cautioned that
this information may not be appropriate for any other purpose and
the reader should not place undue reliance on such financial
outlooks. Often, but not always, forward-looking statements and
information can be identified by the use of words such as "plans",
"expects" or "does not expect", "is expected", "estimates",
"intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or state that certain
actions, events or results "may", "could", "would", "might" or
"will" be taken, occur or be achieved. Forward-looking statements
or information involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of Canopy Growth or its subsidiaries to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements or
information contained in this news release. Financial outlooks, as
with forward-looking information generally, are, without
limitation, based on the assumptions and subject to various risks
as set out herein. Our actual financial position and results of
operations may differ materially from management's current
expectations and, as a result, our results may differ materially
from the information provided in this news release. Examples of
such statements include statements with respect to the Company's
organizational and strategic review and forecast of demand; the
Company's focus on aligning its resources to meet the needs of
consumers; and the estimated pre-tax charges to impact the
Company's financial position during the quarter ending March 31, 2020. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information, including preliminary financial
results are subject to the completion of the Company's financial
closing procedures and have not been audited or reviewed by the
Company's independent registered public accounting firm; changes in
cannabis industry growth and trends, including changes in the
Company's forecasted demand for cannabis and associated changes in
consumer preferences and demands; changes in general economic,
business and political conditions, including changes in the
financial markets; the global regulatory landscape and enforcement
related to cannabis, including political risks and risks relating
to regulatory change; compliance with extensive government
regulation, including the Company's interpretation of such
regulation; public opinion and perception of the cannabis industry;
and such risks contained in the Company's annual information form
dated June 25, 2019 and filed with
Canadian securities regulators available on the Company's issuer
profile on SEDAR at www.sedar.com. Although the Company believes
that the assumptions and factors used in preparing the
forward-looking information or forward-looking statements in this
news release are reasonable, undue reliance should not be placed on
such information and no assurance can be given that such events,
including any preliminary financial results for the quarter ending
March 31, 2020 will occur in the
disclosed time frames or amounts or at all. The forward-looking
information and forward-looking statements included in this news
release are made as of the date of this news release and the
Company does not undertake an obligation to publicly update such
forward-looking information or forward-looking information to
reflect new information, subsequent events or otherwise unless
required by applicable securities laws.
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SOURCE Canopy Growth Corporation