Another Canadian cannabis company has fallen victim to the weak market, with Zenabis Global (TSX:ZENA) announcing a significant cut to its workforce.
On Wednesday (March 11), the Vancouver-based licensed producer (LP), which has operations across Canada, confirmed it has let go of 22 percent of its overall workforce.
Shares of the company quickly fell in Thursday’s (March 12) trading session following the news. Zenabis opened at C$0.06, but midway through the trading day the firm had seen a drop of 21.43 percent in value, resulting in a price per share of C$0.05.
In a statement, Zenabis CEO Kevin Coft said the firm is aiming to become cash flow positive in 2020 through this operational efficiency measure.
Given the current climate for cannabis sales in Canada, the company does not plan to expand or create more growing options for itself; it believes its current capacity is enough to meet demand.
Although Zenabis expressed excitement about the expected growth Canadian cannabis sales could see from an increase in the availability of edible and infused products, the company told investors it anticipates that sales from the unregulated cannabis market will continue to impact wholesale prices, as well as the legal cannabis market’s expansion.
Zenabis joins a growing list of marijuana operations in Canada that have had to face cuts amid the financial realities of the capital markets.
Most recently, Canopy Growth (NYSE:CGC,TSX:WEED) announced plans to shut down operations at two facilities located in Aldergrove and Delta, BC. It also terminated approximately 500 positions.
In February, Tilray (NASDAQ:TLRY) confirmed it would let go of about 10 percent of its workforce. Similar reductions have been seen at Aurora Cannabis (NYSE:ACB,TSX:ACB) and The Supreme Cannabis Company (TSX:FIRE,OTCQX:SPRWF).
Charles Taerk, CEO of Faircourt Asset Management, a sub-advisor to Ninepoint Partners’ cannabis-focused fund, told the Investing News Network (INN) that the cuts from Canopy in particular were no surprise and will actually be beneficial to the firm in the long term.
“I think that there are many companies that are finding it difficult to operate in this capital-constrained environment,” he told INN.
Zenabis became part of another larger trend in the Canadian cannabis market when its CEO suddenly departed. In December, the firm notified investors that Andrew Grieve was out as its executive leader.
“Most of these cuts for costs will actually turn out to be positive and help the lifespan of these companies,” Nawan Butt, a portfolio manager at Purpose Investments, previously told INN in a wide-ranging conversation about the cannabis market.
Zenabis was also in the news last year when it faced pressure in the markets as it attempted to defend a rights offering plan.
Don’t forget to follow us @INN_Cannabis for real-time news updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
American cannabis sales hit US$17.5 billion in 2020, a research group’s new study shows.
Meanwhile, a Canadian cannabis producer began offering CBD beverages in the US, another move that shows how interested Canadians are in the overall US cannabis market at the moment.
Some pretty important news out of health and wellness; beverage and natural products company BevCanna Enterprises Inc. (CSE:BEV, Q:BVNNF, FSE:7BC) this week. For those of you following the Company with us, stay tuned.
As investors continue to prioritize cannabis opportunities in the US, market watchers expect mergers and acquisitions (M&A) to play a role in the future for Canadian companies.
A consolidation trend has been expected in the Canadian cannabis space for some time now based on the size of the market compared to the number of operations in the country.
BioHarvest Sciences Inc. Unveils the Unique Polyphenolic Content of Its Upcoming Olive-Based Nutraceutical
The product will include polyphenols known to have significant health benefits.
BioHarvest Sciences Inc. (CSE: BHSC) (“BioHarvest” or the “Company”) has reached an important milestone in its development program of additional Nutraceuticals. The olive-based Nutraceutical product scheduled for market availability in the second half of 2022 will contain the following unique matrix of polyphenols: hydroxytyrosol, trosol, and verbascoside. These compounds are the major polyphenols in naturally grown olives and are responsible for the high antioxidant activity of olives and olive oil. Importantly, the BioHarvest olive-based Nutraceutical product will provide all the benefits of olives and olive oil with a low calorie count per serving.
Cresco Labs (CSE:CL) (OTCQX:CRLBF) (“Cresco” or the “Company”), one of the largest vertically integrated multistate cannabis operators in the United States, announced today that it will report financial results for the fourth quarter and full year ended December 31 st , 2020 on Thursday March 25 th , 2021 before the market opens.
The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday March 25 th , 2021 at 8:30am Eastern Time (7:30am Central Time).