Canopy Growth (CGC) continues downsizing in corporate restructuring
Last week, 30 employees were let go at the company’s Ontario headquarters in an “ongoing strategic review of the business.” Since CEO David Klein joined in January 2020, Canopy Growth has been on an aggressive paring down of global cannabis operations to lower the company’s cost structure and reduce cash burn, hopefully, to put the company on a path towards profitability in the near-term.
This makes the fourth – but so far smallest – round of cuts in 2020. In March, about 500 employees were let go in the company’s closing of two greenhouses in British Columbia – their Aldergrove and Delta sites accounted for over 50% of Canopy’s cultivation operations in Canada. Then in mid-April, the company shaved off 85 full-time operations when it drew back its international operations in Africa, Colombia, and the United States. Soon after, 200 employees were laid off in their Canada, United Kingdom, and United States offices at the end of April.
Canopy Growth is on our Short Bias List.
iAnthus Capital Holdings (ITHUF) enters recapitalization agreement, leaving existing shareholders with 2.75% equity
Yesterday morning, iAnthus Capital announced that it had entered into a recapitalization agreement to solve its crippling financial troubles. The restructuring support agreement proposes two scenarios: in the first, current shareholders retain 2.75% of the company, while in the second, existing shareholders retain 0%. The transaction was entered into with 100% of the company’s secured lenders and over 91% of unsecured debenture holders, proposing a reduction of outstanding debt from $168.7 million (as of 6/30, excl. fees and interest) to $101.4 million (excl. $20 million in preferred equity).
The stock tanked 46.2% upon the announcement.
To combat the illegal market, Canada’s Northwest Territories reduces prices of legal marijuana.
The Northwest Territories Liquor and Cannabis Commission applied a 10% price cut across all legal marijuana products at the beginning of July. The commission hopes to curb the illegal sale of marijuana in the region and foster more robust consumer demand for the legal market through affordability. In the Northwest Territories, the regional government sells regulated cannabis out of five liquor stores to a population of roughly 45,000 people.
