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Mass Layoffs Continue in Cannabis Industry – Globally



What’s one great way to tell if an industry is doing well? More jobs open up, and salaries improve. What’s a great way to know there are problems? When more and more jobs get cut. That’s where we are today, as mass layoffs continue in the cannabis industry, signaling a host of problems, with no solution in sight.

Industry issues

When the industry first started it was a true free-for-all. The predictions for market growth were off-the-charts, and it seemed like every big international company wanted to swoop into newly legalized locations to take advantage of this new reported cash cow of an industry. Everyone wanted in. Lots of people made investments. We all waited with baited breath to see who among us would become the new weed industry millionaires.

Now, we’re a few years in, and the landscape has changed, along with expectations. CBD has faded out into almost nothing, medical markets are getting eclipsed by recreational markets, which themselves are still often eclipsed by black markets. Prices remain high in many places due to insane taxing, and governments have been slow to pick up on this as an issue. Overproduction has (let’s be honest, predictably) come into play, causing prices to plummet in every venue. And the once thriving industry, is now showing its cracks, with sales plummeting in many places.

Last year the reports started really rolling in about industry closures and layoffs. Smaller names were already having a hard time making it in due to expensive regulation, extreme competition, and extra costs like slotting fees at dispensaries; making it seem like a game for the big dogs only. But even they’re having issues. And now as 2023 gets underway, the mass layoffs continue, both in the US, and around the world.

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Mass layoffs in the cannabis industry – global

Clever Leaves Holdings is a Colombian cannabis company with operations in Portugal. On January 23rd of this year, the company announced restructuring plans that include cutting nearly ¼ of its staff. Clever Leaves is in the medical space, creating pharmaceutical-grade products. This restructuring means winding down all operations in the Portugal location. In fact, the company wants to move everything back home to cut costs, saying:

“By exclusively cultivating and producing our cannabinoid products in Colombia, we aim to leverage our existing cost efficiencies in the country as we ramp our dry flower offering,” said Andres Fajardo, CEO of Clever Leaves. “We believe this transition will allow us to optimize our production infrastructure and drive increased cost savings, positioning us to compete more effectively in the global medicinal cannabis market.”

As of the end of September, the company had $12.1 million in assets in Portugal. The facility included cultivation, post-harvesting, and manufacturing activities; though it sounds like all of this will eventually end. It’s also not the only company operating out of Portugal that wants to cut back. On January 17th, cannabis giant Tilray Brands announced it too was looking to cut about a quarter of its staff. The facility in Cantanhede is also a medical cannabis products facility. Said a Tilray spokesperson to MJBizDaily:

“A total of 49 jobs will be affected in the production, manufacturing, quality, quality control (laboratory), cultivation, supply chain, facilities, warehousing, logistics, procurement, and IT. These changes, which are in line with Tilray’s rightsizing to meet the needs of the current economy and the state of legalization across medical and adult-use cannabis, will take place over the next three months.”

To give an idea why this is happening, consider that in the quarter ending November 30th, 2022, the company posted a $61.6 million net loss. Tilray is a public company and can be found on the NASDAQ and Toronto Stock Exchange under TLRY. Clever Leaves also had huge losses of $37.3 million, in the first three quarters of last year. It only earned $13.2 million in the same time frame. Clever Leaves is publicly traded under CLVR on NASDAQ.

In Canada, Delta 9 announced that it would temporarily lay off 40 people. This is interesting wording as it implies the company does believe it will be able to reverse these layoffs. Realistically, maybe it will, but a stronger reality might be that none of these jobs are coming back for any of these companies. This cut in the company’s Winnipeg facilities accounts for 40% of its staff.

Fellow Canadian company The Flowr Corporation (OTC:FLWPF) a cultivation services enterprise with locations in several countries, made some big changes last year to keep from bankruptcy. It cut employees to the tune of $4 million in savings, accounting for 40% of its workforce. Along with this, it made a deal to sell off its subsidiary Flowr Forests, a 16 acre property for cultivation. This is considered a non-core asset, and makes the company $3.4 million in revenue.

Mass layoffs in the cannabis industry – US

The US might not have federally legal weed, but it is home to the biggest cannabis industries. However, things aren’t doing better within the borders of the US, than they’re doing outside them. One of the big ones to announce major cuts of late? Columbia Care, Inc., which operates in several states, and owns Green Leaf Medical LLC, which is about to make a bunch of people jobless. How many? 73. As of February 28th.

According to the company: “In order to meet the appropriate supply and demand levels of the market, it was necessary for us to reduce the workforce at our cultivation and production facility.” It continued, “We are hopeful that with adult use on the horizon, this facility will be back up to full capacity in the future.” It’s pretty clear this cut is indeed due to a lack of business.

Leaflink, a wholesale tech platform out of New York, is also cutting jobs. Late last year it was reported that 80 employees were sent looking for new work. Much like the other companies to make cuts, the company explained: “Unfortunately, as the cannabis industry continues to face headwinds and the current macroeconomic environment, we needed to take the next step in our evolution to continue supporting the industry.”

Truelieve, a company offering medical cannabis products and services out of Tallahassee Florida, and which operates in many states, also made a similar announcement at the end of last year. Workers were cut from its McKeesport Pennsylvania cultivation facility, numbering approximately 36. This is technically small potatoes considering the company employs in the neighborhood of 8,000, but its also not the first cut. The company laid off workers in three Florida locations: Midway, Monticello, and Quincy, as well.

While the cut was blamed on “Trulieve’s $2.1 billion acquisition of Arizona-based multistate operator Harvest Health & Recreation in 2021,” it also came on the heels of the company posting a quarterly loss of $115 million.

Yet another Florida company, Springbig, a technology company for weed-specific marketing software, cut 23% of its workforce (37 employees) late last year. The company is trying hard to turn a profit amid an industry that seems harder and harder to turn a profit in. These cuts were meant to save $200,000 in the short term, and 21% in the first three quarters of 2023.

Springbig had just merged with Tuatara Capital Acquisition, in order to get on NASDAQ; trading under SBIG. The company’s shares have plummeted from $4.50 last June, to 82 cents at the end of 2022. Prior to the drop it had reported $24 million in yearly revenue, with a $275 million valuation, as per Green Market Report.

If you’re a big reader of cannabis news, then the publication Leafly is likely familiar to you. Well, even Leafly Holdings is having problems. In October of last year, it was reported that the cannabis resource and marketplace, would cut 56 jobs, or 21% of its staff. Leafly, traded under LFLY on NASDAQ, is looking to save approximately $16 million a year, saying, “These reductions will help preserve our ability to respond to opportunities as this industry continues to mature and expand, and allow us to more effectively manage our capital.”

Previously mentioned layoffs in the cannabis industry

This is unfortunately not the first time I’ve reported on cannabis industry layoffs. Last year made one thing very clear: the market is not as sound as many wanted to believe; and the overall market predictions in place, are falling short of reality.

Some of the big layoffs already reported on, include Weedmaps, which cut about 25% of its staff; Curaleaf Holdings, which just got rid of 220 employees; Akerna, which released 1/3 of its staff, or 59 workers; Dutchie, which removed 8% of its workforce, amounting to 67 jobs lost; Canopy Growth which sold all its retail locations, and cut 245 jobs last year; and Aurora Cannabis which cut 12% of its workforce as a part of corporate restructuring to save money.

With the biggest names in cannabis faltering, it brings up the question of who can survive. More companies to let employees go recently, include California’s Eaze, which laid off around 25 employees last year; Lume, a cannabis company out of Michigan closed four out of 30 of its stores; and Nature AZ Medicine, an Arizona medical cannabis company, cut up to 100 employees as a result of medical sales falling.

There’s nothing saying that 2023 won’t turn into a banner year for cannabis sales, and there’s nothing saying that all of these companies won’t recoup their losses, or hire back the numbers they lost. But right now, things aren’t looking fantastic for cannabis industry growth, and these layoffs are a good indication that more bad news might be coming.


Will the cannabis industry rebound? Or are these mass layoffs an indication that the weed industry has hit a wall? And maybe most important to ask, if it can be saved, what kind of changes are necessary in order to facilitate this?

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Aurora CEO Gets $6.7 Million – Cannabis | Weed | Marijuana




Aurora Cannabis Inc.’s CEO is getting a 38 percent raise to $6.7 million amid cost-cutting and share slumps.

Aurora Cannabis is trading 99% below all-time highs, making it one of the worst-performing companies on the TSX. The company’s shares lost 52 percent of their value in fiscal 2023. But this guy gets a 38 percent raise.

With a market cap of $240 million, what would possibly justify the Aurora CEO getting $6.7 million?

Aurora CEO Gets $6.7 Million

Aurora CEO Gets $6.7 Million

Aurora’s CEO, Miguel Martin, joined the company in September 2020. Over the past three fiscal years, he’s made $16.1 million in compensation while the company has lost $2.6 billion.

In an email to The Globe, Aurora said, “Corporate performance metrics were either met or exceeded, which is reflected in the annual short-term incentive pay component of total compensation.”

Whether that’s true or not – investors are spooked.

Consider Aurora’s biggest miscalculation to date: that large, “sea-of-green” grow facilities were the wave of the future.

On the eve of legalization, they had a $2-billion market cap. So they bought up everything they could: nutrient companies, greenhouses, and smaller cannabis companies like CanniMed and MedReleaf.

Aurora even built a 75,000-square-metre greenhouse they (incorrectly) believed would supply a third of all Canadian cannabis.

But it turns out Canada’s cannabis consumers prefer mom-and-pop craft cannabis. Aurora Cannabis has never been profitable.

They recently closed a production facility in Denmark, sold one in Medicine Hat, and they’re shifting their focus to medical cannabis.

While the Aurora CEO gets $6.7 million, the company reports losses. Aurora expects positive free cash flow by the end of fiscal 2024.

Aurora CEO Gets $6.7 Million – How?

Aurora CEO Gets $6.7 Million

How do Aurora and its CEO justify a $6.7 million compensation amid cost-cutting and share slumps? Probably the same way they justified their visions of legalization – by appealing to fantasy.

Licensed producers like Aurora overestimated demand, oversupplied products, and in the process, destroyed profit margins.

Thrown in the fact that Canadians weren’t eager to abandon their “illicit” supply of cannabis farmers and vendors, you’ve got the perfect storm: Multi-billion-dollar write-downs and cumulative operating losses. 

Between 2020 and 2022, Aurora Cannabis reported losses of nearly $1 billion.

Aurora has raised equity capital numerous times, diluting shareholder wealth. Company-wide layoffs are the norm as the cannabis producer scales down its operations.

Hence, the shift to higher-margin medical cannabis. Still, the company loses money.

Is Now the Time to Buy Aurora Shares?

Aurora CEO Gets $6.7 Million

Putting aside the fact that the Aurora CEO is getting $6.7 million amid cost-cutting and falling stock – is now the time to buy Aurora stock?

They say it’s darkest before dawn.

Aurora expects to be profitable by the end of fiscal 2024. They’ve certainly been aggressive in their reorganization. In fiscal 2023, Aurora Cannabis reported a sales increase of 27%.

According to the company, the Aurora CEO’s $6.7 million deal is linked to Aurora’s share price and corporate performance metrics.

So is the point where the company turns itself around? Aurora has promised to achieve positive free cash flow before. What’s unique about this time?

Analysts expect the loss per share to narrow in 2024. What’s motivating them is the potential of European cannabis markets.

Aurora Cannabis is well-established in Europe, with a presence in Germany and France.

Still, Aurora Cannabis Inc.’s fundamentals are weak. They are a high-risk investment. There are other cannabis companies (especially south of the border) that are much better buys.

That said, some analysts expect to see the Aurora stock gain by 40% in the next twelve months. Which may or may not justify Aurora CEO’s $6.7 million compensation package.

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How Will German Legalization Affect Aurora? – Cannabis | Weed | Marijuana




How will German legalization of cannabis affect Canadian licensed producer Aurora?

Aurora Cannabis claims it is the second-largest medical cannabis producer in Germany. With the Germans posed to legalize by the end of the year, many expected big wins for the LP.

However, German news was less than optimal. With German officials bowing to European Union pressure, the first wave of German legalization will be low-scale, nonprofit social cannabis clubs.

Meaning, whatever traction Aurora hoped to get from Germany’s recreational legalization is now bust.

But where does that leave the large Canadian LP? The cannabis corporation may have the best balance sheet among its Canadian peers, but that’s not saying much.

How Will German Legalization Affect Aurora?

German legalization Aurora

Aurora Cannabis ended 2023 with a net loss of $67.2 million and $310 million in cash. The company has repeatedly screwed over shareholders by raising equity capital and diluting wealth.

The result has been a steady drop in stock prices. In fact, Aurora Cannabis’ current market cap is $385 million. That’s a 99% fall from their all-time highs.

So how will German legalization affect Aurora’s stock price? On the surface, a low-scale German effort appears like bad news. Germany’s population is twice the size of Canada’s. An Aurora presence in Germany could have helped boost revenues.

However, establishing a presence in Germany would have meant investing capital. Which begs the question: what capital? Investors may not stand for another round of dilution.

Meanwhile, Aurora Cannabis focuses on medical cannabis products. Where gross margins are higher than in recreational markets.

Aurora Cannabis’ losses in the last four years have totalled $1.2 billion.

Why Germany?

German legalization Aurora

Ever since an act of Parliament created Canada’s licensed producers, they’ve been eyeing up the German cannabis market.

But why? How does German recreational legalization or its current medical market affect Aurora and the other LPs?

On the surface, it’s pure economics. At one point, Germans were paying up to $18 per gram for medical cannabis, compared to the $8 average in Canada.

Second, as mentioned, Germany has about 46 million more people than Canada. As well, German insurance claims on cannabis are more common than in Canada. This is part of what led to Aurora’s acquisition of Germany’s most prominent cannabis distributor.

What About Germany’s Pilot Project?

German legalization Aurora

Germany will launch a regional pilot programme as part of the two-phase legalization plan. In select cities, the government will assign a commercial company to supply cannabis through dispensaries. This pilot will be a test to assess broader commercial sales within the country.

So how will Germany’s legalization pilot project affect Aurora Cannabis? Will Aurora be the commercial supplier?

The details of this test pilot programme are not yet known. But you can be sure Aurora executives are rubbing their hands at the prospect.

And can you blame them? They’ve spent millions trying to capture the European market.

As mentioned, Aurora’s German investments involved acquiring Europe’s largest medical cannabis distributor, Pedanios GmbH. They’ve also bought over 3,000 pharmacies. 

Aurora has put significant money into the European markets. But given their emphasis on medical cannabis, it doesn’t seem likely they’d supply Germans with recreational cannabis.

However, the “public health” model of cannabis legalization is about selling pharmaceutical-grade cannabis. It could be that the German government, like the Canadian government, is eyeing these medical producers as commercial suppliers of recreational cannabis. 

If that’s true, German legalization may breathe some life into Aurora. German legalization may give the company a second chance it doesn’t deserve.

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