Canopy Growth Announces Changes To Global Operations To Drive Strategic Focus

 

The Company continues to expect to incur approximately $700-800MM pre-tax charge in Q4 Fiscal 2020.

CANADA: Canopy Growth Corporation (“Canopy Growth” or the “Company”) (TSX:WEED, NYSE:CGC) today announced a series of global operational changes designed to further optimize production, better align supply and demand, and improve efficiencies in its global operations. As part of its ongoing strategic review of the business, the Company announced today the following changes to its operations:

  • Africa: Canopy Growth has exited its operations in South Africa and Lesotho, transferring ownership of all of its African operations.
  • Canada: The Company will shut down its indoor facility in Yorkton, Saskatchewan, to further align production in Canada with market conditions.
  • Latin America: Canopy Growth will cease operations at its cultivation facility in Colombia, moving to an asset-light model that leverages local suppliers for raw materials and Procaps for formulation and encapsulation activities as outlined in the previously announced agreement between the two companies. These activities will support the position of Colombia as the Company’s LATAM production hub and the ongoing development of its cannabis industry.
  • United States: Canopy Growth will cease its farming operations in Springfield, New York, due to current market demand for hemp.

“When I arrived at Canopy Growth in January, I committed to conducting a strategic review in order to optimize our cost structure and reduce our cash burn,” said David Klein, CEO, Canopy Growth. “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. I want to sincerely thank the members of the teams affected by these decisions for their contributions in helping build Canopy Growth.”

The Company continues to expect, based upon information currently available to management, to record estimated pre-tax charges of approximately $700-800MM in the quarter ending March 31, 2020. This relates to this announcement and previous announcements, as well as any additional changes made during the organizational and strategic review. The organizational changes announced today include a headcount reduction of approximately 85 full-time positions.

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”.

Analysts Forecast High Growth For North America Cannabis

IRELAND: The legal Cannabis revolution is only beginning. The 80+ years prohibition against its use is now ending and the tides are clearly turning. Despite being illegal for so long, more than 37 million people in the U.S. and millions more in Canada use Cannabis, both legally and illicitly.

The market for Cannabis in North America already is large and growing quickly. In 2018, more than $41 billion will be sold and by 2026 that figure will rise to $95 billion according to a new report, “North America Cannabis: New Markets, Competitors and Opportunities: 2018-2026 Analysis and Forecasts.

Authors state the Cannabis revolution offers new hope for many medical problems, a substitute for alcohol and tobacco, and unrivaled investment opportunities for individuals and companies wanting participation in this emerging market.

This report is focused on the U.S. and Canada (North America) markets for Cannabis, both legal and illicit. Specifically, this report covers:

  • North America Cannabis industry including market size and growth, price trends and competitive environment including the black market.
  • United States Cannabis market size and growth, regulation issues, market drivers, transition from illicit to legal, prices, user base, incidence of use, tax incentives, legal risks, financing issues, state metrics and characteristics, branding, derivative products, threats/opportunities to other industries.
  • Canada Cannabis industry including market size and growth, country metrics, regulation issues, comparisons with Colorado and California, black market, prices, market potential, production capacity, supply concerns, opportunities beyond cultivation, competitive environment.
  • Selected company profiles detailing product offerings, brands, facilities, operations, sales, distribution, prices, JVs, exports, expansion plans, yields, costs, patients, M&A activity, competitive advantages, strategies.

For more information about this report visit