A year on from recreational legalization, another licensed cannabis producer has bad news for employees and shareholders. British Columbia-based medical and adult use producer Emerald Health Therapeutics, Inc. (TSXV: EMH; OTCQX: EMHTF) today revealed it has culled 33% of its overall workforce.
That move comes in the midst of an industry-wide severe cash crunch that has seen licensed producers trimming their workforces, leaving newly constructed greenhouses inoperable, and slowing down previous rapid expansion plans.
In addition to culling 65 staff members since the summer, today Emerald Health fired an additional 20 employees in a company wide reorganization meant to reduce expenses.
Those staff reductions include members of senior management, with the company’s Chief Financial Officer, Chief Operating Officer, and Director of Finance all departing in this latest wave.
Emerald Health’s board chairman Dr. Avtar Dhillon commented on the employee reduction news this morning:
While still serving on the board, Dhillon is additionally stepping down from his role as President of the company, with that position now being filled by Chief Executive Officer Riaz Bandali.
Emerald isn’t the only company suddenly shifting gears and downsizing in the wake of poor quarterly report numbers. HEXO Corp (TSX: HEXO; NYSE: HEXO) culled 200 employees from its roster a handful of days before posting an $85 million loss for fiscal 2019.
Just before the company’s licenses were revoked by Health Canada over an unlicensed grow scandal, CannTrust Holdings Inc (TSX: TRST; NYSE: CTST) also let 180 employees go in early September.
With major producers in both the U.S. and Canada running out of cash and hanging on through new lending, insider private placements, or drastic reductions in costs, additional rounds of layoffs are expected in the coming months as cannabis companies seek a path towards profitability.
Like most licensed producers over the last year, Emerald has also suffered on the stock front. EMHTF has dropped from a high of $3.86 back in March and is currently trading at $0.60 a share this morning.
In other company news, Emerald Health just completed a first full shipment of adult-use dried cannabis flower and CBD oil to the Nova Scotia Liquor Corporation last week.
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