More layoffs in Canada’s cannabis sector this morning. Embattled grower Canntrust Holdings Inc announced last night that it was laying off 140 workers, a quarter of its workforce, between late October and the end of the year. Canntrust lost its licence to produce and sell cannabis in September, months after Health Canada found it was growing pot in illegal spaces. The Ontario-based producer also said earlier this month that it would destroy about $12 million worth of plants and about $65 million worth of inventory, as it seeks to get its licence back. It plans to rehire when it regains regulatory compliance. The news follows staff cuts at Quebec-based cannabis producer Hexo, which announced yesterday it was slashing 200 jobs across the company, including some executives. Hexo shares have fallen over the past few weeks after it issued a revenue warning. The company cut its forecast for the quarter ending July 31, by about 40%. Original Source

Gatineau cannabis company Hexo lays off 200 workers

Hexo made the announcement Thursday, saying the layoffs were necessary for its long-term stability.

Hexo is one of Canada’s largest cannabis companies and a major employer in Masson-Angers, about 40 kilometres northeast of Ottawa.

As of last May the company had 1,072 employees, according to its financial filings.

“This has been my hardest day at Hexo Corp.,” said Sébastien St-Louis, chief executive and co-founder of the company, in a statement. “While it is extremely difficult to say goodbye to trusted colleagues, I am confident that we have made sound decisions to ensure the long-term viability of HEXO Corp.”

The layoffs are across departments and locations and include executives, said the statement. Besides its main plant in Gatineau, Hexo has facilities in Belleville, Montreal, Niagara and Brantford.

Earlier this month, the company announced that revenue for the quarter was lower than expected and withdrew its financial outlook for 2020, which had predicted up to $400 million in net profit.

Hexo began life as Hydropothecary, a Health-Canada approved grower of medical marijuana. Now Hexo also sells recreational cannabis across the country. It’s a major supplier to Quebec’s government-run shops.

In its statement, Hexo cited a number of reasons for the layoffs: the delay in opening retail cannabis stores; regulatory uncertainty; pricing pressures; and “jurisdictional decisions to limit the availability and types of cannabis derivative products (that) have contributed to an increased level of unpredictability.”

In Ontario and Quebec stores have been slow to open since Canada legalized recreational marijuana a year ago. Customers can buy online, but many prefer to shop in person.

Only 24 cannabis stores are operating in Ontario and 22 in Quebec.

Many Canadians also continue to buy their weed on the black market, where prices are considerably lower. The latest Statistics Canada survey found that legal cannabis on average was $10.23 per gram, compared to $5.59 per gram on average in the illicit market.

Hexo fought back earlier this month with an announcement it plans to sell a “value brand” called Original Stash for $4.49 a gram.

The company also faces regulatory challenges in Quebec.

The province has moved to ban the sale of cannabis-infused sweets and confectionaries. In its financial filings, Hexo said it is developing candies and chocolates.

Health Canada just approved the sale of such edible products, along with cannabis drinks, concentrates like the liquids found in vape pens, and topicals like lotions. Those products are expected to be on sale by the end of the year. However, Quebec wants more restrictive regulations.

Hexo also has a joint partnership with Molson Coors Canada to develop cannabis-infused drinks under the brand Truss. Truss has announced one drink, a CBD-infused spring water, and five more to come under the brand. Original Source

CannTrust cutting as many as 140 jobs as it works to regain cannabis licenses

Troubled cannabis company CannTrust Holdings Inc. is temporarily cutting as many as 140 people — roughly one quarter of its workforce — as it works to comply with Health Canada regulations.

The company says there will be a series of phased layoffs between late October and the end of the year. The cuts are expected to result in monthly cash savings of about $400,000 and cost up to $800,000 in severance payments if the employees are not recalled within 35 weeks.

The savings will be dependent on the timing of employee recalls pending reinstatement of the company's licenses by Health Canada, CannTrust says.

CannTrust has been mired in turmoil since it disclosed in July that Health Canada had discovered illicit cultivation in unlicensed rooms at its Pelham, Ont., greenhouse. Its licenses to produce and sell cannabis were suspended in September.

The company submitted a detailed remediation plan to Health Canada on Oct. 21. It expects to complete the work described in the plan by the end of the first quarter of 2020.

CannTrust also says a special committee has completed its investigation into the causes of its non-compliance with the Health Canada regulations and made its report to the board of directors. Original Source