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Friday, April 19, 2024
Cannabis business faces bumpy road one year in

The cannabis business in Canada is facing falling stock prices, revenue shortfalls, staff layoffs and senior management shakeups as the industry shakes down, painting a portrait of a sector in upheaval, one year into legalization.  

Niagara Region is not immune to those speedbumps, hard on the heels of a year of rapid expansion, but the biggest player, Tweed Farms in Niagara-on-the-Lake, says it is holding steady, with 270 employees, and a million square feet of greenhouse space.

The company has no plans to reduce staff or operations at its huge facility on Concession 5 in NOTL, according to Jordan Sinclair, vice-president of communications for Canopy Growth Corporation, which owns Tweed Farms.

The “key challenge is the lack of retail stores,” explained Sinclair.

“This is most true in Ontario, where we have one store per 600,000 residents. Ontario has 24 stores, while Alberta, for example, has 324 stores.”

However, Sinclair said, “it’s a good problem to have, because it’s a simple solution. We’ve been spending a lot of time in recent weeks in any arena available, advocating for more retail stores.” 

The other factor that is expected to give the industry a lift is the legalization of edible marijuana products, referred to as cannabis 2.0 within the business.

Products will be legally available to consumers beginning mid-December.

“We will have a full suite of products for consumers, ranging across various categories, including vape, beverage and edibles such as infused chocolate,” said Sinclair. 

Meanwhile, Hexo Corp. has announced the closing of its plant in Beamsville.

As part of “rightsizing our operations, we are winding down operations at the Beamsville facility. We retain the ability to bring it back online to adjust to any increase in demand in the future,” Isabelle Robillard, vice-president of communications for Hexo Corp., said in an email response.

“We have yet to share numbers for individual locations … the total number of positions cut is just under 200” across all of its operations, she said. 

CannTrust, which also has operations in Niagara, has also announced reductions.

The company is “temporarily streamlining its workforce by up to 140 people through phased layoffs at both Pelham and Langstaff facilities by the end of 2019. This is the result of significantly reduced operations following Health Canada’s partial suspension of the company’s licences,” senior vice-president Jane Shapiro said in a statement  to The Lake Report.

CannTrust ran afoul of Health Canada last summer, violating its licence conditions by growing more plants than it was licensed for.

“Ongoing work at the Pelham facility continues to focus on remediation-related activities. Once the licences are reinstated, the company looks forward to rehiring its workforce, resuming production and once again delivering high-quality products to customers and patients,” added Shapiro. 

The cannabis business is a “brand new industry and it’s having teething pains,” surmised Hugo Chesshire, director of policy and government relations for the Greater Niagara Chamber of Commerce.

“It would be naive to expect smooth sailing. It’s to be expected in a new industry there may be some bumps,” he said.

In the meantime, Sinclair is unequivocal about Canopy. 

“We’re solid, we have cash on hand to weather the short-term challenges, and we have no intention of making any changes to our operations at Tweed Farms in NOTL.” 

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