– Pot producer HEXO Corp said on Tuesday it will close three production sites in Canada, affecting 155 employees, as part of its integration plans following recent acquisitions.
In the coming months, HEXO said it will cease operations at Kirkland Lake and Brantford facilities in Ontario and Stellarton in Nova Scotia.
Other pot producers including Canopy Growth, Tilray Inc, Sundial Growers Inc and Aurora Cannabis have also cut their workforce, emphasizing a push towards faster profitability as investors grow impatient.
Profits have been wearing thin at most pot firms, weighed down by fewer-than-expected retail stores, cheaper rates on the black market and sluggish overseas growth.
Last week, rival Canopy growth posted a bigger second-quarter loss, citing domestic supply challenges and slower revenue growth in the United States.
But with more than three years into Canada’s legalization of recreational cannabis, demand for pot and related products is surging and to tap into it, HEXO bought privately owned Canadian cannabis producers Redecan and 48North Cannabis Corp in September.
Earlier this year, HEXO also said it was taking over Zenabis Global Inc for C$235 million, giving it access to the European medical cannabis market.
Hexo’s U.S.-listed and Canadian shares fell over 3% each in morning trading.
(Reporting by Rithika Krishna in Bengaluru; Editing by Shinjini Ganguli)