A major cannabis producer closed two cannabis greenhouses in the Lower Mainland, leaving 500 people without work.
The announcement by Canopy Growth Corp. Wednesday said it would close a 1.3 million sq. ft. greenhouse in Aldergrove and a 1.7 million sq. ft. greenhouse complex in Delta.
“These actions are part of the company’s effort to align supply and demand while improving production efficiencies over time,” Canopy Growth said in a statement.
The move, which came nearly 1.5 years after recreational cannabis was legalized in Canada, came because of challenges with the pot market.
“The Canadian recreational market has developed slower than anticipated, creating working capital and profitability challenges across the industry,” the company said.
Both operations were first up and running in February 2018, and accounted for approximately 3 million sq. ft. of licensed production space.
In recent years, the Aldergrove facility has come under fire from nearby residents bothered by its bright lights, odours, and noise emanating from the 30-acre operation.
CEO David Klein said the decision to downsize was not taken lightly and that it was necessary to allow the company to “maintain our leadership position for the long-term.”
Canopy Growth plans to refine its efforts to focus on outdoor production sites, which in turn, will be of less cost for the company – which operates 11 licensed cannabis production sites with over 4.7 million square feet of production capacity.
Federal regulations permitting outdoor cultivation were introduced after Canopy Growth made significant fiscal investments in Canadian greenhouse production, it said.
In addition to Wednesday’s closures, the company announced it no longer plans to operate a third greenhouse as planned in Niagara-on-the-Lake, Ontario.