Canadian marijuana grower and producer OrganiGram Holdings (NASDAQ:OGI) is downsizing. The company announced in a corporate update on Monday that it is reducing its number of employees by around 25%, letting go of around 220 workers.
At the moment, 84 OrganiGram employees have been furloughed. The company said they will be brought back if and when required.
Regarding the new reductions, OrganiGram wrote in the update that "[t]hese decisions are never easy to make, but we are committed to ensuring the Company is appropriately sized relative to market conditions."
"With a reduced workforce, the Company believes it can continue to meet current and anticipated near term demand levels," it added.
OrganiGram also said that it will grow less cannabis than its main facility in the province of New Brunswick was designed for. It did not specify its new projected amount.
Finally, the company has opted to delay filing its latest set of quarterly results. It is using the blanket injunctive relief provided by Canadian securities regulators to push the deadline roughly one week later. The company's Q3 ended on May 31, and its filing is due July 15.
Investor expectations should be muted for the quarter. OrganiGram said that due to the coronavirus pandemic and "changing market dynamics" that have affected the wholesale segment in particular, it will likely post a decline in net revenue when compared with its Q2 performance. It did not get more specific, nor did it provide any estimates for profitability.
This wasn't exactly music to investors' ears. The cannabis company's share price fell by 3.7% on Monday, in contrast to the overall growth of the wider stock market.