Reuters — Pot producer Hexo Corp. said Tuesday it will close three production sites in Canada in early 2022, affecting 155 employees, as part of its integration plans following recent acquisitions.
Gatineau, Que.-based Hexo said it will cease operations at its Kirkland Lake and Brantford facilities in Ontario at the end of January and at Stellarton in Nova Scotia at the end of February.
Other pot producers including Canopy Growth, Tilray, Sundial Growers and Aurora Cannabis have also cut their workforces, emphasizing a push toward faster profitability as investors grow impatient.
Read Also
Artificial intelligence put to work on extension
Farm Credit Canada and Results Driven Agriculture Research (RDAR) have unveiled a generative artificial intelligence tool called Root
Profits have been wearing thin at most pot firms, weighed down by fewer-than-expected retail stores, cheaper rates on the black market and sluggish overseas growth.
Last week, rival Canopy Growth posted a bigger second-quarter loss, citing domestic supply challenges and slower revenue growth in the U.S.
But with more than three years into Canada’s legalization of recreational cannabis, demand for pot and related products is surging and to tap into it, Hexo bought privately owned Canadian cannabis producers Redecan and 48North Cannabis Corp. in September.
Earlier this year, Hexo also said it was taking over Zenabis Global for $235 million, giving it access to the European medical cannabis market.
The two Ontario plants to be closed came to Hexo via the 48North acquisition; the Stellarton site came by way of Zenabis.
Once the three affected plants are closed, cannabis cultivation, processing and distribution will be centralized at Hexo’s “core facilities,” the company said.
Hexo’s U.S.-listed and Canadian shares fell over three per cent each in morning trading.
— Reporting for Reuters by Rithika Krishna in Bangalore. Includes files from Glacier FarmMedia Network staff.
