(Reuters) -Canopy Growth Corp said on Thursday it would shed assets in Canada and reduce its workforce by about 60% as part of the pot producer’s efforts to reduce costs and turn profitable.
U.S.-listed shares of Canopy tumbled nearly 9% in premarket trade after the company also reported a bigger quarterly loss.
The company has been cutting costs through layoffs, exit from some international markets, store closures and divestiture of its retail business across Canada.
“The right-sizing of our Canadian business is expected to significantly reduce our cash costs,” Chief Financial Officer Judy Hong said in a statement.
Hong said the company expects to deliver at least quarterly breakeven adjusted EBITDA in its Canadian cannabis business in fiscal 2024.
In Canada, Canopy is exiting cannabis flower cultivation in Ontario, ceasing the sourcing of cannabis flower from the Quebec facility, and moving to a third-party sourcing model for cannabis beverages, edibles, vapes, and extracts.
The headcount reduction will affect 800 positions, of which 40% immediately, the company said.
The company sees saving C$140 million to C$160 million over the next 12 months from its latest cost-cutting measures. It also expects to record related pretax charges of C$425 million to C$525 million in the current quarter and the first half of fiscal 2024.
The Ontario-based company’s adjusted core loss widened to C$87.5 million ($65.29 million) in the quarter ended Dec. 31, from C$67.4 million a year earlier.
($1 = 1.3401 Canadian dollars)
(Reporting by Ankit Kumar; Editing by Maju Samuel)