NEWS BRIEF

Organigram becomes latest cannabis producer to slash jobs, production target

Canadian marijuana producer Organigram cut its workforce by about 25% and said production levels will be below capacity “for the foreseeable future.”

Organigram described the cuts in a news release as “an effort to better align its production capacity to prevailing market conditions.”

The New Brunswick-based company first warned that the COVID-19 pandemic could lead to layoffs and production decreases in late March.

Subsequently, Organigram temporarily laid off about 400 employees in early April. At the time, those layoffs represented about 45% of the company’s workforce.

The layoffs, announced Friday, will affect about 220 employees, Organigram said, “including a small number who are not on temporary layoff.”

Eighty-four Organigram workers are still on temporary layoff, meaning they could be recalled.

The company now employs 609 people, including the 84 workers on temporary layoff.

Organigram is cultivating “less than the target production capacity of cannabis its Moncton campus was originally designed for, with a focus on bringing new cultivars to market and increasing the tetrahydrocannabinol and terpene profile of its dried flower to meet emerging consumer demand,” the news release noted.

However, Organigram said it “believes it can continue to meet current and anticipated near-term demand levels” despite the job cuts.

Organigram also delayed the filing of its third-quarter interim financial statements by about a week, until July 21.

The company expects to report decreased net revenue from its second quarter, “impacted by insignificant wholesale revenue being recorded in the quarter.”

Organigram is the latest Canadian producer to slash its cultivation output, following similar moves by Aurora Cannabis, Canopy Growth, Hexo and Tilray.

Most large Canadian cannabis producers spent years building production capacity that was never needed.

Organigram trades as OGI on the Toronto Stock Exchange and the Nasdaq.

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