Blaming a tepid market that grew “slower than anticipated,” Canopy announced it will close its Aldergrove and Delta greenhouses, both in BC, and laid off 500 workers. It also canceled plans to build a greenhouse on the 60 acres it purchased in Ontario.
MJ Biz Daily, Vice, BNN Bloomberg

The Aldergrove and Delta greenhouses were Canopy’s largest in BC, with a combined 3M square feet of production space. Closing them will cost the company an impairment of between $700M and $800M in fiscal Q4 2020.

  • In November, Canopy had 5.4M square feet of licensed capacity. The cuts reduce that capacity by 55%.
    Twitter–David George-Kosh
  • Brock University professor Michael J Armstrong noted prior to legalization, LPs made decisions like greenhouse acquisitions in the hope of dominating an industry that hadn’t yet appeared. Now each LP must adjust to “the market share it actually got.”

BMO analysts estimated Canopy invested $500M in BC Tweed, which they said “highlights the undisciplined capital spending by previous management.”
Yahoo Finance

  • The decision highlights the risks lingering after many LPs’ pre-legalization rush to acquire as many production facilities as they could, often at greatly inflated rates.