(This story was updated to reflect new information on the restructuring of Aurora’s executive leadership team.)
Aurora Cannabis is shutting down five smaller production facilities and cutting roughly 700 employees as part of a corporate transformation plan over its next two quarters, with the goal of centralizing production and manufacturing at “larger-scale and highly efficient sites.”
Aurora’s decision is the latest in a trend that has seen large Canadian producers mothballing excess facilities.
The Edmonton, Alberta-based company’s affected facilities are:
- Aurora Prairie in Saskatoon, Saskatchewan.
- Aurora Mountain in Mountain View County, Alberta.
- Aurora Ridge in Markham, Ontario.
- Aurora Eau in Lachute, Quebec.
- Aurora Vie in Pointe-Claire, Quebec.
In a news release issued Tuesday, Aurora said parts of the Aurora Vie facility “will remain operational to allow for the manufacturing of certain higher-margin products.”
Production and manufacturing will eventually be centralized at the Aurora Sky and Polaris facilities in Edmonton, the Aurora River facility in Bradford, Ontario, and the Whistler Pemberton facility in Pemberton, British Columbia.
“As part of the transition, the Company also intends to immediately ramp up cannabis production at its Nordic facility in Europe from which it believes (it) can adequately service the European market with EU-GMP (European Union-Good Manufacturing Practice)-certified product,” Aurora said.
The future of the closed facilities has yet to be determined, according to Aurora spokeswoman Michelle Lefler.
“At the time of facility closures, we will evaluate next steps in accordance with fulfilling shareholder obligations,” she wrote in an email to Marijuana Business Daily.
Aurora’s cuts also include layoffs of production and administrative employees.
Selling, general, and administrative staff will be cut by about 25%, “most with immediate effect,” and production staff will be reduced by about 30% over the next two quarters.
The layoffs will affect approximately 700 Aurora staff, according to Lefler.
The Alberta company said the job cuts “include a restructuring of the executive leadership team and the recently announced retirement of President Steve Dobler.”
Aurora confirmed Shane Morris was no longer with the company. Morris was promoted to chief product officer in November.
The facility closures come with asset-impairment charges worth up to CA$60 million ($44.4 million) in Aurora’s current quarter, the company said.
Aurora also plans to record a CA$140 million charge for “the carrying value of certain inventory, predominantly trim, in order to align inventory on hand with near-term expectations for demand.”
Interim CEO Michael Singer said in the release that “both the Canadian facility rationalization and inventory revaluation are expected to improve gross margins and accelerate our ability to generate positive cash flow.”
Aurora reported a net loss of CA$137 million in its most recent quarter.
The company’s decision to shutter the five facilities is the latest closure carried out by a big Canadian cannabis producer.
Some examples include:
- Canopy Growth closing two British Columbia greenhouses.
- Hexo Corp. completing the sale of a large greenhouse it acquired from Newstrike.
- Tilray closing an Ontario facility.
- Aurora selling an Ontario greenhouse at a discount.
As far back as 2017, Canadian producers had bankrolled more than enough canopy to meet demand for the recreational market, but some publicly traded companies continued to build and buy more cultivation space in the ensuing years.
Solomon Israel can be reached at firstname.lastname@example.org