Barrie, Ontario-based cannabinoid company MediPharm Labs said it is cutting its workforce by approximately 30% .
The move came after the company reported negative first-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 3.1 million Canadian dollars ($2.3 million).
In addition to MediPharm itself, the job cuts also cover Vivo Cannabis, a Toronto, Ontario-based cannabis producer MediPharm acquired in April.
A MediPharm spokesperson did not immediately reply to a query from MJBizDaily on the number of affected employees.
However, as of Dec. 31, 2022, MediPharm and Vivo collectively employed 285 people, according to regulatory filings, implying upwards of 85 people could be affected.
In a news release, MediPharm said the workforce reduction is expected to save over CA$4 million on an annualized basis.
In the first quarter ended March 31, the company’s first-quarter negative EBITDA of CA$3.1 million followed red ink totaling CA$5.7 million a year earlier.
MediPharm’s sales rose to CA$5.8 million, up 20% over the same quarter one year ago.
Most of MediPharm’s sales in the January-March quarter were in Canada.
By jurisdiction, the company’s revenue was:
- CA$3.9 million in Canada.
- CA$51,000 in Australia.
- CA$1.2 million in Germany.
- CA$575,000 in other, unspecified places.
MediPharm’s sales in the Canadian adult-use and wellness sector were C$3.5 million in the first quarter, up from CA$2.5 million in the same period last year.
International medical cannabis sales amounted to CA$1.8 million, up from CA$1.3 million in the first quarter last year.
MediPharm’s three biggest expenses in the quarter were:
- CA$3.1 million for inventory recognized in cost of sales.
- CA$3.1 million for employee benefits.
- CA$1.2 million for consulting and professional fees.
The Barrie company ended the quarter with CA$20.2 million of cash.