Please ensure Javascript is enabled for purposes of website accessibility

Canopy Growth Announces Worker Furloughs, Dispensary Reopenings

By Eric Volkman – Apr 4, 2020 at 8:34PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company will temporarily let go of 200 employees while aiming to open company-owned retail stores.

Canopy Growth (CGC 4.41%) has enacted a set of temporary job cuts. A company official said in an interview with BNN Bloomberg published on Friday that it has furloughed 200 staff members at its retail outlets. However, at the same time it plans to reopen some of the company-owned stores in its native Canada.

The furloughs are, naturally, connected to the current SARS-CoV-2 coronavirus outbreak and its resulting economic slowdown. They come only a short time after Canopy Growth shuttered the 23 company-owned dispensaries located in the provinces of Manitoba, Saskatchewan, and Newfoundland and Labrador. It also closed the visitors' center at its Ontario headquarters building. 

In the article, the Canopy Growth representative didn't specify how many stores the company was aiming to reopen, nor where any were located.

Marijuana bud on fire.

Image source: Getty Images.

The status of dispensaries in Canada during the coronavirus outbreak is mixed. Most provinces are allowing them to stay open, considering them "essential" businesses in their community like grocery stores and traditional pharmacies. One glaring exception is Canopy Growth's home of Ontario, which did not include cannabis on its latest list of essential services, updated on Friday, April 3.

Marijuana companies are eager to remain open for business, since an extended shutdown could risk their very existence. Many are chronically unprofitable, and more than a few have significant cash flow difficulties. 

Although Canopy Growth still has rather full coffers because of the $4 billion investment Constellation Brands (STZ -2.25%) made in the company starting in 2017, it has struggled on the bottom line like many peers.

On Friday, Canopy Growth shares fell by almost 4%, a deeper fall than those recorded by the key stock market indexes on that day.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Canopy Growth Stock Quote
Canopy Growth
CGC
$2.84 (4.41%) $0.12
Constellation Brands, Inc. Stock Quote
Constellation Brands, Inc.
STZ
$231.26 (-2.25%) $-5.33

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.