Less than two weeks after acquiring a debt position in Delta 9 Cannabis and entering a stalking-horse agreement to purchase distressed edibles maker Indiva, Canadian operator SNDL is enacting a restructuring plan.
The Alberta-based cannabis and alcohol company, seeking to reduce corporate expenses and improve efficiencies, will eliminate 106 positions as part of wide-ranging cost-cutting measures, according to a Tuesday news release.
The restructuring is expected to generate more than $20 million in annual cost savings, though it will require a one-time investment of $11 million over the next 18 months, SNDL said.
The company projects annualized savings by mid-2025, though it could see earlier benefits by the third quarter of 2024.
As part of the reorganization, SNDL is consolidating its cannabis business segments into a single unit under Tyler Robson.
“This restructuring project and segment consolidation are critical steps in our journey towards better capital deployment, improved agility, focus, and profitability, and will free up resources to invest in profitable growth opportunities,” SNDL Chief Executive Zachary George said in a statement.
“We are committed to enhancing our organizational effectiveness by streamlining processes while leveraging technology and automation.”
Earlier this month, SNDL acquired the debt of Delta 9 Cannabis for 28.1 million Canadian dollars and agreed to purchase Indiva.
Delta 9 has struggled for profitability, invoking layoffs and other cost-cutting measures the past few years.
In the Indiva acquisition, SNDL agreed to buy “all of the issued and outstanding shares of Indiva and the business and assets of the Indiva Group” for an estimated price of CA$25 million-CA$28 million.
Indiva, Canada’s leading producer of cannabis edibles, is seeking to sell assets to repay creditors under bankruptcy protection laws granted by the Ontario Superior Court of Justice under the CCAA.
