Zenabis Global laid off almost a quarter of its workforce and plans to sell one of its cultivation and processing facilities in an effort to become cash flow positive this year, the Vancouver, British Columbia-based company said this week.
Zenabis cut its head office personnel by 33% and its overall workforce by 22%.
It also announced plans to sell its 25,000-square-foot facility in Delta, British Columbia.
Last August, Zenabis said it was in the process of converting the building to an extraction and testing facility.
“Zenabis believes that the current licensed or substantially completed facilities are sufficient to meet current market demand for the company’s recreational and medical products and no longer intends on pursuing further construction or conversion projects at this time,” it said in a statement this week.
The company reported a net loss of CA$18.5 million ($13.2 million) in its quarterly report last November, as well as an adjusted EBITDA loss of CA$6.3 million.
Many Canadian cannabis producers are struggling to stay afloat after massively overspending on cultivation facilities.
By the end of 2017, producers had bankrolled more than enough capacity to meet demand.
But federally licensed producers kept building.
In May 2019, Zenabis said it expected to be capable of producing 480,000 kilograms (1.05 million pounds) of dried cannabis equivalent per year “if all four cannabis growing facilities are fully built out and converted.”
That was approximately five times the amount of cannabis sold in the legal market that year, and about half of all the cannabis sold in Canada’s legal and illicit channels annually.
Zenabis still operates other facilities, including in Langley, B.C. and Atholville, New Brunswick.
Shares of Zenabis Global trade on the TSX Exchange as ZENA.