IMAGE CREDIT: ALYSON MARTIN
For the past month, several major cannabis companies have pointed the finger at COVID-19 for ended deals, layoffs, and halted operations. Cannabis Wire is keeping track.
Long before the coronavirus hit, cannabis companies were having a rough time. The end of 2019 brought deflation of a bubble that, starting in mid-2018, swelled and sent cannabis stocks soaring month after month. Soon enough, regulatory realities and delays set in, and the returns on investments looked more distant and uncertain.
The start of 2020 has been marked by seemingly endless layoffs and cutbacks, and while it’s unclear exactly how much of that is continued fallout from 2019 and how much is due to coronavirus, the pandemic certainly has played some role. Or so the companies have started to say, as of one month ago.
So here at Cannabis Wire, we’re keeping track of every layoff, cutback, or other announcement in which the company points to COVID-19 as a contributing factor.
The company, which is behind the Mission brand stores in a handful of states, including Illinois and Massachusetts, wrote in an announcement at the end of March, “given the ongoing uncertainty in the market and the economy due to Covid-19, the Company will suspend further formal guidance at this time. The Company expects to provide reinstated guidance for both 2020 and 2021 when it has more visibility into the operating environment.”
That same announcement had some rough updates, but they weren’t necessarily coronavirus-related: headcount reductions between 40-45% (both corporate and overhead for Mission shops), estimated to save $7-8 million a year; “Delaying projects that require significant capital expenditures with uncertain near-term benefits;” and “divestiture,” for $6 million, of the company that managed a Mission shop in Arizona.
The company noted that the headcount reduction was four months in the making, and that one of its delays, a manufacturing facility in California, was due to market factors in the state “prior to the COVID-19 pandemic.”
In early April, Acreage announced that it had: furloughed 122 employees (including corporate); temporarily closed a shop in Maryland, a shop in North Dakota, and a wholesale operation in Iowa, among other operations in California, Oregon, and Washington; killed two pending acquisitions, including Greenleaf Compassionate Care Center in Rhode Island and Deep Roots Medical in Nevada; the resignation of executive vice president and chief people officer Steve Hardardt
Howard Schacter, Acreage VP of communications, told Cannabis Wire, “The significant impact of the COVID-19 pandemic and other uncontrollable factors have greatly shifted the cannabis landscape. Temporarily closing our North Dakota Botanist location is one of several moves we’ve made this week that are all intended to enable our company to maintain its business goals of profitability, conserve cash and to execute on our strategic plan.”
Published: April 10, 2020
Founder & Interim Editor of L.A. Cannabis News