Further to this conversation regarding over supply, low prices, leverage etc.
From today's Globe. This company is completely exposed to the same industry issues.

Rochelle Pancoast recalls feeling disappointed upon finding out last year that Aurora Cannabis Inc., 

ACB-T -4.11%decrease
 
 one of the largest cannabis producers in Canada, was shutting down its flagship growing facility in Medicine Hat.

 

The greenhouse, Aurora Sun, was projected to be one of the largest in the world, the size of 21 football fields, with the capacity to produce 230,000 kilograms of cannabis in a year. It would have created close to 700 jobs in Medicine Hat, a town of 60,000 people in southern Alberta.

Last week, as part of its quarterly earnings report, the company disclosed it was in the middle of a pending sale of Aurora Sun that would yield it approximately $47-million. That’s a far cry from the $250-million Aurora had pumped into its Sun operation over the years, mostly to purchase and reconfigure it into a high-tech cannabis plant. It was never fully operational.

“The town did benefit from the construction and building phase. But it is never easy to get your hopes up for hundreds of jobs to be posted, and then not see them materialize,” said Ms. Pancoast, a management analyst with the City of Medicine Hat.

Amid sluggish earnings, stagnant demand and an overall market saturation, some of the largest cannabis companies in Canada have spent much of the past two years downsizing and consolidating their operations.

They’ve done this primarily by shuttering sprawling greenhouses across the country, which were once a measure of a company’s success – the larger and more technologically advanced a greenhouse was, the more capital a company could attract from investors. It was because of this formula that the recent sector-wide contraction has been disproportionately felt in small towns, where most of the biggest greenhouses are located, and among migrant workers, who many companies hired in large numbers.

“Layoffs are happening especially among the larger operators who had overbuilt production capacity and are now shutting down and divesting those assets,” said John Kagia, chief knowledge officer at the cannabis research firm New Frontier Data. “We expect this pattern to continue as the Canadian market works towards equilibrium between capacity and demand.”

Alongside disclosing the potential sale of its Sun greenhouse, Aurora announced it was closing another flagship facility, Aurora Sky in Edmonton. That shutdown would affect 13 per cent of the company’s work force.

Indeed, four of the largest cannabis companies – Canopy Growth Corp., Aurora, Tilray Inc. (which merged with Aphria Inc. last year) and Hexo Corp. – have shed thousands of jobs since hiring peaked in 2019, mainly because they are now closing greenhouses, company filings show.

Job losses at four major cannabis companies
By reported year
 Aurora
 Canopy Growth
 Tilray
 Hexo
05001,0001,5002,0002,5003,0003,5004,0004,500201720192021201720192021201720192021201720192021
THE GLOBE AND MAIL, SOURCE: COMPANY REPORTS
DATA
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Date Aurora Canopy Growth Tilray Hexo
2017-06-01 171      
2018-06-01 967      
2019-06-01 2779      
2020-06-01 2731      
2021-06-01 1761      
2022-06-01 1479      
2017-03-01   546    
2018-03-01   1033    
2019-03-01   3211    
2020-03-01   4434    
2021-03-01   3259    
2022-03-01   2850    
2017-05-01     150  
2018-05-01     300  
2019-05-01     620  
2020-05-01     1200  
2021-05-01     2100  
2022-05-01     1700  
2017-07-01       89
2018-07-01       220
2019-07-01       1260
2020-07-01       798
2021-07-01       1277
2022-07-01       815

JOB LOSSES AT FOUR MAJOR CANNABIS COMPANIES

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Some companies, such as Hexo and Tilray, saw a bump in overall employee count in 2020 and 2021, but that was largely due to acquisition activity. They subsequently resumed layoffs.

 

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Hexo, for example, purchased two smaller producers, 48North Cannabis Corp. and Zenabis Global Inc. in 2021, and then shut down three growing facilities associated with those producers, laying off 155 workers in the process. The facilities were located in Kirkland Lake, Ont., Brantford, Ont., and Stellarton, N.S.

When Tilray and Aphria merged last summer, one casualty was Tilray’s medical-cannabis facility in Nanaimo, B.C., which at one point employed more than 300 workers.

“There were quite a few technical and professional positions that were lost when Tilray closed down,” said Kim Smythe, president and CEO of the Greater Nanaimo Chamber of Commerce. “Very unfortunate because that’s the sort of brain trust we would have liked to keep in our city.”

Nanaimo Mayor Leonard Krog told The Globe and Mail that one reason why Tilray was such an appreciated employer in the city was because it hired people with a range of skills – those who tended to cannabis plants, along with those who studied their medicinal properties.

“Tilray kind of just faded away. They are irrelevant now. The last time I drove past the facility there was a ‘For Lease’ sign up,” he said. Tilray did not respond to a request for comment on layoffs in Nanaimo.

Nanaimo in 2022, however, has a much more diverse economy than it did decades ago, with a record-low unemployment rate mainly due to a property and tourism boom Vancouver Island has experienced over the years.

Other towns haven’t been as lucky. In March, Cronos Group Inc. announced it would close a greenhouse in Stayner, Ont., in the township of Clearlake, just south of Collingwood. The plant employed at least 200 workers, in a town with a population of roughly 14,000.

In an interview with local media at the time, Clearview Mayor Doug Measures said he was shocked to hear the facility was closing and was not given advance notice by Cronos. He called it a great loss to the community. Cronos did not respond to a request for comment on the layoffs.

For migrant cannabis workers on temporary foreign work permits, layoffs can have dire consequences. They stand to lose benefits such as access to health care and the ability to work in Canada altogether if they cannot find another employer willing to sponsor them on the same permit.

“Migrant workers who are injured on the job or who are terminated are the most vulnerable in terms of losing their permits,” said Chris Ramsaroop, a lecturer at the University of Toronto’s Caribbean Studies program and an organizer with the non-profit group Justice for Migrant Workers.

The group has spent much of the past year and a half helping about 60 migrant workers who were terminated by the cannabis company PharmHouse Inc. when it filed for bankruptcy protection in late 2020.

Two former PharmHouse workers spoke with The Globe on condition of anonymity because they were still looking for work and feared repercussions from prospective employers. They described dreadful working conditions at PharmHouse’s greenhouse in Leamington, Ont., including intolerable heat from UV lights used to help boost cannabis-plant growth, and child-sized beds in bunkhouses with poor heating where they stayed in the winter.

One of those workers was hospitalized for dehydration in 2020 owing to the immense heat, and was subsequently laid off when PharmHouse filed for creditor protection in September, 2020. He has yet to find legal, permanent employment.

Some of these workers are now part of a lawsuit in the bankruptcy process to recoup money they say PharmHouse owes them. Roughly 90 per cent of the company’s low-skilled employee base was made up of migrant workers, according to the former PharmHouse workers.

PharmHouse’s trustee, EY Canada, did not respond to a request for comment.

There is no official measure of the number of jobs in the cannabis sector that have been gained or lost over the years, and the data available often don’t line up with anecdotal evidence of job losses. Greenhouse jobs appear to have shrunk, but the burgeoning number of cannabis retailers, especially in Ontario, could have offset that loss.

Data from Statistics Canada show that from January, 2020, to February, 2022, there was actually a 13-per-cent increase in the number of jobs classified as “cannabis product manufacturing.”

But data from the job site Indeed.com showed that the number of Canadian job postings mentioning cannabis-related terms declined 27 per cent between May, 2021, and this May. That decline, however, mainly reflected the fact that cannabis job postings have grown slower than job postings in the rest of the economy, said Indeed Canada economist Brendon Bernard.

For Shawn Pankov, mayor of Smiths Falls, Ont., the home of Canopy and a town that was revitalized when the company took over an abandoned Hershey chocolate factory, the cannabis boom-bust cycle causes some worry.

Canopy announced in April it was in the process of cutting 243 jobs, approximately 10 per cent of its work force; 75 of those will come from the Smiths Falls facility, which employs roughly 950 people. In a statement, the company said decisions around layoffs are never easy to make, but called Smiths Falls the “cornerstone” of its production footprint.

“There is always a concern that companies rightsizing their business could contribute negatively to the town,” Mr. Pankov said. “But we also know that businesses are responsible