Calgary, Alberta-based SNDL is cutting 85 jobs as a part of a plan to deliver approximately 9 million Canadian dollars ($6.7 million) in cost savings, making it the latest Canadian cannabis firm to cut staff.
CEO Zach George said in a Monday announcement that SNDL made the decision to ax staff and activity in Olds, Alberta, to improve efficiency, citing massive overproduction in the Canadian market.
“We estimate that more than 1 billion grams of flower are sitting in Canadian vaults today,” George said.
“Oversupply and excess capacity have resulted in high-quality flower being widely available and sold well below the marginal cost of production.”
MJBizDaily previously reported that the total amount of stored cannabis by licensed producers, wholesalers and retailers had reached 1.4 billion grams (1,543 tons), citing the latest Health Canada data.
SNDL’s layoffs come as cannabis producers across Canada have shed close to 1,000 jobs so far this year in a race to break even as funding dries up.
Canopy Growth announced last week it is closing its flagship cultivation facility in Smiths Falls, Ontario, and cutting 800 positions.
Sundial changed its corporate name to SNDL – its ticker symbol on the Nasdaq exchange ticker symbol – last year.
“Using available and existing biomass, we will be better equipped to leverage the current pricing environment to materially improve our cost of goods sold and margins,” SNDL’s George said in the statement.
“We are taking a proactive approach with our cultivation and manufacturing strategy to evolve with the market while continuing to deliver exceptional products across a variety of product and price segments.”
SNDL said it expects the cost savings to help it exceed the company’s previously announced savings target as a result of the acquisition of manufacturer The Valens Co., which it bought for CA$138 million last year.
SNDL also said it expects to record net revenue for the fourth quarter of 2022, which it expects to report at the end of March 2023.
Matt Lamers can be reached at firstname.lastname@example.org.