Canopy unloads British Columbia cannabis greenhouses at large loss

Smiths Falls, Ontario-based Canopy Growth sold off two facilities in British Columbia that it once touted as the largest cannabis greenhouses in the world.

In a regulatory filing this week, the company said it completed the sale of its production facilities in Aldergrove and Delta in December and January, respectively, for a combined 40.6 million Canadian dollars ($31.5 million).

In July 2018, Canopy spent nearly 500 million Canadian dollars ($393 million) to acquire the remaining one-third interest of the BC Tweed joint venture it didn’t already own.

That deal brought “the two largest federally licensed cannabis facilities in the world into full Canopy Growth ownership,” Canopy said at the time, referring to the two greenhouses.

Previous to that, Canopy said it invested CA$644 million to expand the growing capacity at the greenhouses as well as its Fredericton facility, the construction of a distribution center and a beverage production facility.

Canopy ultimately closed the greenhouse facilities last year to “align the company’s cultivation capacity with projected demand.”

The BC Tweed greenhouses had a mammoth 3 million square feet of growing area.

One of the facilities experienced a large fire last year.

Some of the largest cannabis producers in Canada, including Canopy, built more greenhouses than the industry needed in the months before and after Canada ended marijuana prohibition in late 2018.

Many of the producers have since sold off the greenhouses for a fraction of what they put into them.

In December 2020, Canopy ceased operations at facilities St. John’s, Fredericton, Edmonton and Bowmanville as part of a strategic review that resulted in the loss of approximately 220 full-time jobs.

Canopy spent much of 2020 implementing a strategic plan to “improve efficiencies” in its global operations.

That included ceasing more cultivation in Africa, Canada, Colombia and the United States.

Canopy pivoted to a different approach to develop some markets overseas.

“We are still working to develop markets in Australia and certain countries in South America by focusing on an asset-light model which emphasizes use of third-party licenses,” Canopy noted in a regulatory filing.

Canopy’s strategy, through its international Spectrum Therapeutics brand, encompasses “continuing the medical sales that began in Australia in May 2019 and supporting Australian patients through imports until our domestic facilities are fully operational.”

Canopy’s shares trade as CGC on the New York Stock Exchange and WEED on the Toronto Stock Exchange.

Matt Lamers is Marijuana Business Daily’s international editor, based near Toronto. He can be reached at [email protected].

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