By Steve Gelsi
Canadian cannabis companies laid off about 6,000 people — or about 30% of their collective workforce — as the COVID-19 pandemic and oversupply took its toll on the industry, according to a study by MJBizDaily.com.
Aurora Cannabis /zigman2/quotes/203734337/delayed CA:ACB -5.16% /zigman2/quotes/210559470/composite ACB -4.89% shed 1,357 jobs, Canopy Growth /zigman2/quotes/200603886/composite CGC -1.80% /zigman2/quotes/224330431/delayed CA:WEED.WT 0.00% cut 1,173 positions, Tilray /zigman2/quotes/209129655/composite TLRY -5.09% /zigman2/quotes/226578748/delayed CA:TLRY -5.82% reduced its work force by 616 and Sundial Growers Inc. /zigman2/quotes/213489825/composite SNDL -4.68% cut 670 jobs, according to the study.
All told, the job reductions amounted to about 30% of a total of 20,000 positions in the cannabis sector, the MJBizDaily reported.
Not all companies laid people off. Out of the 50 companies in the study, 23 of them added a combined 1,697 jobs including High Tide /zigman2/quotes/201958100/composite HITI -3.53% /zigman2/quotes/222662325/delayed CA:HITI -2.83% , which added 342 jobs and 266 hires by Pure Sunfarms (Village Farms International /zigman2/quotes/207525872/composite VFF -2.39% ).
The study of public filings also revealed that the country’s cannabis sector drew in more than $112 million in government money to keep or rehire employees. Most of the job figures were from 2020 filings since many of the companies have not yet filed figures for 2021 employment.
The layoffs came after the cannabis sector spent billions to build cultivation facilities but ended up destroying cannabis they could not sell. The supply glut also led to the sale of properties at a fraction of their construction cost.
Investors have reacted by bidding down shares of cannabis companies this year. Canopy Growth shares are down by 50% year-to-date. Aurora Cannabis shares have lost 16.8% in value in 2021 and the Cannabis ETF /zigman2/quotes/213173823/composite THCX -2.03% is off by 11.2%. Bucking the trend, Tilray shares are up 32% and Sundial is up 57%.