Canadian cannabis company SNDL reducing workforce by more than 100 to cut costs

Dow Jones07-17

MW Canadian cannabis company SNDL reducing workforce by more than 100 to cut costs

By Steve Gelsi

The company is shedding staff as it moves ahead with plans for a U.S. cannabis entity

Canadian cannabis company SNDL Inc. said Tuesday it is reducing its workforce by 106 full-time employees as it looks to cut costs in the face of oversupply in the market.

SNDL (SNDL) said the job cuts will save an estimated $20 million-plus in annual costs from "optimization of corporate overhead spending."

The Calgary, Alberta-based company said the restructuring will take place over the next 18 months and cost about $11 million over that time period.

SNDL's stock ended Tuesday's trading unchanged.

The departure of personnel includes the Aug. 1 exit of Marcie Kiziak, chief executive of Nova Cannabis Inc. (CA:NOVC) (NVACF) The CEO job at Nova will go to Grant Sanderson, who is currently the company's chief operating officer. SNDL owns a controlling stake of 63% in Nova Cannabis as part of its footprint of 188 privately operated cannabis stores in Canada.

A company spokesperson did not reply to an email from MarketWatch inquiring about SNDL's total head count prior to the company's layoff announcement.

Along with the restructuring, SNDL has been buying up the debt of cannabis companies in both Canada and the U.S.

On July 5, it closed its C$28.1 million ($20.6 million) acquisition of the principal debt of Delta 9 Cannabis Inc. (CA:DN) (DLTNF) from sellers Servus Credit Union Ltd. and Connect First.

Also on July 5, SNDL announced a plan to acquire Indiva Ltd., a maker of cannabis edibles in Canada, through a stalking-horse purchase valued at C$25 million ($18.3 million) to C$28 million ($20.5 million), in a debt-restructuring deal.

In May, SNDL said its joint venture, SunStream USA Group, would move ahead in acquiring equity positions in U.S. cannabis assets.

The Nasdaq Stock Market confirmed that the proposed structure of Sunstream USA meets all applicable laws and Nasdaq listing rules, SNDL said on May 2.

SunStream USA controls a credit portfolio that includes Ascend Wellness Holdings (AAWH), Columbia Care Inc., Jushi Holdings Inc. (CA:JUSH) (JUSHF), SkyMint Brands and Surterra Holdings Inc.

Also on its list of acquisitions, SNDL in early 2023 closed its C$138 million ($100.9 million) acquisition of the Valens Co.

The acquisition of Valens gave the company manufacturing facilities in every material product segment in the cannabis space, and a procurement arm that "has enabled us to take advantage of oversupply and mispricing in the Canadian market in terms of biomass and flower," SNDL said recently.

Also read: Scotts Miracle-Gro's RIV Capital to merge with Cansortium in cannabis tie-up

-Steve Gelsi

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July 16, 2024 16:15 ET (20:15 GMT)

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Canadian cannabis company SNDL reducing workforce by more than 100 to cut costs

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