The world’s largest cannabis company Canopy Growth Corporation is scaling down its global operations. The North American-based firm plans to close its hemp farm in New York, cease operations in Africa, and shut down another facility in Saskatchewan.
According to an announcement made on Thursday, April 16, 2020, the company stated the decision is meant to significantly minimize costs and save cash. The latest moves, which include scaling down operations in Colombia, will send home some 85 full-time employees of the company, five of whom served at the 1000-acre US hemp farm.
Difficult but necessary
In an e-mail sent to CNN Business, Canopy Growth spokesperson wrote:
We have made the difficult but necessary decision to close our Waterpoint Hemp Farm based in Springfield, New York. Like many other growers in the state, Waterpoint Hemp Farm produced an abundance of hemp in 2019, which does not commensurate with current market demand or the regulatory delays surrounding hemp extracts.
However, Canopy Growth’s plans to establish a hemp industrial park in Kirkwood remain intact, according to the representative. The proposed venture supported by New York Senator Chuck Schumer and other lawmakers, is a $150 million investment intended to create hundreds of jobs.
Canopy Growth intends to establish a cannabis processing and extraction plant on the site. This will lead to the production of cannabis compounds like Cannabinoids from hemp. Once implemented, the venture is likely to attract other players in the hemp industry interested in utilizing other by-products such as seeds and fibers.
Slowing down activities
According to Kirkwood town supervisor Gordon Kniffen, Canopy Growth appeared to be moving forward with its plans, albeit at a slower pace. Speaking to CNN Business, he said he’s not been in touch with Canopy Growth for a while.
David Klein is Canopy Growth CEO. Regarding the proposed changes, he said:
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. 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.
Klein is a former director at Constellation Brands (STZ), which is the largest investor at Canopy Growth.
