- Cannabis companies have been hit with a wave of layoffs, amounting to well over 3,100 jobs lost across both startups and public companies.
- The job cuts come amid a broader downturn in the sector, and the coronavirus pandemic has only exacerbated the problem.
- On the private side, a tight funding environment has made it difficult for growth-stage cannabis startups to raise capital.
- Click here for more BI Prime stories.
The once red-hot cannabis industry is coming back down to earth.
Since last fall, cannabis companies — including venture-backed startups like Pax and public giants like Canopy Growth — have announced a series of job cuts, amounting to well over 3,100 workers in the sector as a whole.
The North American Marijuana Index, which tracks a basket of cannabis and cannabis-related stocks, has tumbled almost 20% this year, building on 2019's rout.
California cannabis startup Caliva cut 20 corporate roles in March. Embattled cannabis retailer MedMen let go of 170 employees in April, according to a securities filing.
Canopy Growth in April cut 200 workers in its corporate offices in Canada, the US, and the UK. In March, the cannabis giant closed two greenhouses — eliminating 500 positions — and canceled plans to build a third greenhouse in Ontario while shifting to cheaper outdoor growing operations.
Canopy Growth CEO David Klein told Business Insider in an interview he expects to further reduce headcount at the company in the coming months.
The reasons for the job cuts across the industry include lower-than-expected retail revenues in Canada and legal states like California, legislative and regulatory hurdles that make accessing capital much more difficult than in other industries, and illnesses linked to vaping.
On top of that, the economic recession and store closures related to the coronavirus pandemic have made the operating environment for cannabis companies even tougher.
It has also become tough for companies to raise money, thanks to cratering share prices for public companies and a shortage of investors for private firms. Industry analysts and experts say the operating environment for cannabis companies has entered a uniquely challenging phase, as companies contend with the aftermath of a period of rapid growth.
Business Insider is tracking these job cuts here and will keep updating as we learn more:
Got a tip? Contact this reporter via email jberke@businessinsider.com, or Twitter DM @jfberke. Encrypted messaging app Signal number available upon request.
This article was published on October 25 and has been updated with new information.
Canopy Growth — 700 layoffs
Company: Canopy Growth
What it does: Canadian cannabis cultivator and retailer
Cuts: Roughly 700 positions
What went wrong: Canopy Growth in April cut 200 positions from its corporate office in Canada, as well as workers in the UK. The terminations come as new CEO David Klein told Business Insider he's focused on cutting costs at the company.
In March, Canopy Growth announced the closure of two indoor cannabis growing facilities in Aldergrove and Delta, British Columbia, resulting in approximately 500 positions eliminated.
Canopy Growth also said in March it no longer plans to bring a third greenhouse online, and said it will shift some its resources to cheaper, outdoor-grown cannabis.
Klein told Business Insider he expects further headcount reductions in the coming months.
Aurora Cannabis — 500 layoffs
Company: Aurora Cannabis
What it does: Canadian cannabis cultivator
Cuts: 500 layoffs, including 25% of the company's corporate workforce
What went wrong: Longtime Aurora Cannabis CEO Terry Booth stepped down and the company cut 500 employees, including 25% of its workforce, it announced on February 6.
Michael Singer, Aurora's executive chairman, will take over as interim CEO while the board searches for a full-time replacement, the company said in a statement.
Booth isn't the only Aurora executive to depart the company in recent months. In December, Cam Battley, Aurora's chief corporate officer and the company's most public figure, stepped down from his role.
Aurora also took a $740 million to $775 million goodwill write-down, mainly related to assets the company acquired in Denmark and South America, "given market current cannabis market conditions and the slower than expected near-term industry growth," according to the statement.
The company is also cutting back spending on travel and entertainment, IT projects, sales and marketing initiatives, and other areas.
MedMen — over 490 layoffs
Company: MedMen
What it does: Cannabis cultivator and retail chain
Layoffs: 190, or 20% of its employees, on November 15. An additional 20% were laid off on December 11, amounting to more than 40% of its corporate workforce over the course of a month. 128 positions terminated in February, and another 170 terminated in April, per a securities filing.
What went wrong: The hits keep coming for the cash-starved MedMen. The company announced it laid off 190 employees in November, including 80 corporate-level employees, in a push to be cash-flow positive by the end of 2020. The company laid off an additional 20% on December 11.
And in February, MedMen terminated 128 employees, according to a Canadian Securities Exchange filing.
In April, MedMen said it cut 170 positions and added 9 in the month, per a securities filing.
MedMen is also planning to sell off stakes it bought in cannabis brands — which it says will net the company $8 million – and has engaged Canaccord Genuity to "explore strategic alternatives" for cultivation licenses and stores "not deemed critical to the company's retail footprint."
The layoffs come amid a months-long restructuring plan put into place by the company's board and former CEO Adam Bierman. MedMen has engaged a turnaround firm, FTI Consulting, to assist with the process.
On top of all that, MedMen announced earlier in November that it was selling its stake in Treehouse, a cannabis real estate investment trust.
In the past few months, MedMen has been hit with a litany of lawsuits and top executives departing, including David Dancer, the former CMO, and Michael Kramer, the former CFO.
Caliva — approximately 220 employees
Company: Caliva
What it does: California-based cannabis retailer
Cuts: More than 200 workers — mostly drivers — were cut in February. The company cut 20 employees from its corporate office on March 30, Business Insider reported.
What went wrong: The California cannabis startup Caliva laid off 20 employees in its corporate office on March 30, the company confirmed to Business Insider.
The cuts mostly affected employees in the retail-management division, the company said. These layoffs haven't previously been reported.
Elizabeth Cooksey, a former top executive at the online fashion company ModCloth who joined Caliva as the company's head of retail in March last year, was among those cut, the company confirmed.
In February, Caliva cut ties with cannabis delivery service Eaze and plans to let go of around one-third of its workforce, CEO Dennis O'Malley told Business Insider. O'Malley said that Caliva plans to build up its own ability to sell cannabis products and deliver them to consumers, instead.
The vast majority of the more than 200 employees cut at Caliva will be full- and part-time drivers who delivered cannabis orders placed via Eaze, Caliva CEO Dennis O'Malley told Business Insider in an interview. Caliva said it plans to hire some of them back into other roles at the firm, as it ramps up its own sales and delivery operation. They can also pursue jobs with other Eaze partners.
The employees were notified of the cuts early in the morning on February 4, though their contracts run through the end of March, Caliva said. O'Malley did not say how many roles would be open for the affected workers to apply to.
Many Caliva drivers are full-time employees with 401k plans and healthcare benefits. O'Malley said he "fully expects" drivers re-hired by Caliva to retain the same benefits.
Hexo Corp - 200 layoffs
Company: Hexo Corp
What it does: Cannabis producer based in Gatineau, Quebec.
Layoffs: 200 workers on October 28, or a quarter of workforce. Chief Marketing Officer Nick Davies and Chief Manufacturing Officer Arno Groll were among those laid off.
What went wrong: The company cited the slow rollout of retail stores in Canada, delays in government approval for cannabis derivative products, and early signs of pricing pressure on cannabis as reasons for the layoffs and stock declines.
The company said it was shutting down several facilities as well.
"The actions taken this week are about rightsizing the organization to the revenue we expect to achieve in 2020," CEO Sebastian St-Louis said in a statement.
On November 15, Hexo released a statement saying there was a "limited amount" of unlicensed cannabis grown at a cultivation facility the company acquired from Newstrike Brands, and some of that illicit cannabis made its way into the regulated market.
CannTrust - 140 layoffs
Company: CannTrust
What it does: Cannabis producer based in Ontario, Canada.
Layoffs: Laid off 140 employees on October 27, or a quarter of its remaining workforce. In August, the company laid off 180 employees, or 20% of its workforce.
What went wrong: The company is seeking to pare back expenses following the revelations that it was growing illicit cannabis in one of its facilities. In July, Health Canada opened an investigation into the illicit growing. The federal agency suspended CannTrust's growing license in September.
The company's former CEO, Peter Aceto, stepped down amid the fallout as well. Earlier this month, CannTrust was forced to destroy $77 million worth of cannabis in order to regain regulatory approval in Canada.
Tilray — more than 140 jobs
Company: Tilray
What it does: Canadian cannabis cultivator
Cuts: 10% of total workforce, or approximately 144 employees
What went wrong: Tilray cut 10% of its workforce in a bid to reduce costs and help the Canadian cannabis producer achieve profitability.
"Tilray restructured its global organization to meet the needs of the current industry environment and for continued growth in 2020 and beyond," Tilray CEO Brendan Kennedy said in a statement provided to Business Insider. "By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry, which will drive value for our investor and employee shareholders."
"The tough decision to eliminate roles has not been taken lightly. We're extremely grateful to our past and current employees for their contributions," the statement reads.
Supreme Cannabis —105 jobs
Company: Supreme Cannabis
What it does: Canadian cannabis cultivator
Cuts: Approximately 105 layoffs, including one-third of the company's corporate workforce
What went wrong: Supreme Cannabis laid off 15% of its workforce, including one-third of corporate positions, in an effort to prioritize "near-term" growth, the company said in a statement.
"Recent staff reductions were an extremely difficult decision for myself and the Board, but I believe them to be necessary to create a more agile, focused and profitable organization for the long-term benefit of all of Supreme Cannabis' stakeholders," the company's interim CEO, Colin Moore, said.
Supreme is yet another publicly traded cannabis company to lay off employees in recent weeks.
The company's former CEO, Navdeep Bhaliwal, left his position in January after revenue declines in the first quarter.
BNN Bloomberg first reported the layoffs.
Weedmaps - 100 layoffs
Company: Weedmaps
What it does: Online cannabis dispensary director based in Southern California.
Layoffs: 100 employees, or a quarter of its workforce in October.
What went wrong: Weedmaps CEO Chris Beals said in a Medium post the layoffs were the result of the slow rollout of legal cannabis dispensaries in California and other legal states like Massachusetts.
"Additionally, both the overall tech and cannabis capital markets have experienced tightening through 2019 that has limited the ability to predictably leverage outside capital to fuel growth during rapid expansion periods," Beals said.
Weedmaps has faced regulatory scrutiny over listing illicit cannabis dispensary and delivery services on its site and app. In September, the company released a plan to remove all unlicensed dispensaries from its database by requiring them to provide their state license numbers.
Pax Labs - 65 layoffs
Company: Pax Labs
What it does: Maker of cannabis vaporizers, based in San Francisco.
Layoffs: 65 workers, or 25% of its workforce in October.
What went wrong: Fallout from the spate of vape-related lung injuries — which have caused 34 fatalities in the US so far— has affected the cannabis industry.
Prior to that, Pax had been something of an investor darling this year, landing a $420 million funding round in April from a range of institutional investors including Fidelity and Tiger Global Management. The round, first reported by The Information, pushed the company into unicorn territory, valuing it at $1.7 billion.
Pax in September let go of its CEO, Bharat Vasan, after a little over a year on the job.
In an interview with Business Insider in January, Vasan said the company was talking to bankers about a potential IPO in 2020. That seems to not be the case anymore, according to statement Pax gave to Crunchbase News.
"[A]ny talk of an IPO timeline was premature," Pax's head of communications, Dianne Gleason, said.
Emerald Health Therapeutics — 65 layoffs
Company: Emerald Health Therapeutics
What it does: Canadian licensed cannabis producers
Layoffs: 65 employees or 33% of its workforce, since August 1.
What went wrong: The Vancouver-based cannabis cultivator announced on October 30 that it had laid off 20 employees, bringing its total number of laid off employees to 65 since August 1.
The staff reductions included the company's CFO, Rob Hill and COO, Sean Rathbone.
"Although such decisions are difficult, we will evolve our strategy, structure, and capabilities as necessary to be able to capitalize on key trends in the changing cannabis sector," Dr. Avtar Dillon, the executive chairman of Emerald Health's board, said in a statement.
GenCanna — 65 layoffs
Company: GenCanna
What it does: Kentucky-based hemp and CBD producer
Layoffs: 65 layoffs in December
What went wrong: GenCanna was an early entrant to the hemp market. Founded in 2014, the company has remained private but hired Goldman Sachs in September to advise on a potential initial public offering or other "strategic alternatives."
The company started 2019 with 162 employees and ended the year with 224 employees after the layoffs, excluding seasonal farmworkers, Business Insider reported.
"With hemp at the intersection and cutting edge of federally legal cannabis and agriculture, ebbs and flows are to be expected," Steve Bevan, the company's president and executive chair, said. "During 2019, pricing for products declined across the industry, due to less-than-predicted demand while constraints — common in new agriculture — were greater than expected."
Bevan pointed to increasing automation of the hemp and CBD supply chain as one of the reasons for the layoffs.
"Because of significant advances in technology, we need fewer people to do more," Bevan said.
Leafly — 54 layoffs
Company: Leafly
What it does: Cannabis website, media, information, and editorial company
Layoffs: 40% of the workforce
What went wrong: Leafly laid off 40% of its workforce on March 23, the company confirmed to Business Insider.
"We're heartbroken to have to let so many talented people go in such an uncertain time," Leafly CEO Tim Leslie said. "COVID-19 has rocked global financial markets and put further capital investments we were expecting on pause."
In November, Leslie said Leafly was freezing hiring, limiting travel for employees, and reining in its holiday party, in a memo obtained by Business Insider.
Like other companies in the burgeoning cannabis sector, Leafly is reckoning with a capital crunch in the cannabis industry after a period of rapid growth.
Zenabis — 40 layoffs
Company: Zenabis
What it does: Canadian cannabis producer
Layoffs: 40 layoffs on January 7, or 10% of the workforce
What went wrong: Vancouver-based cannabis producer Zenabis laid off 40 workers, or roughly 10% of its workforce on Tuesday, reports BNN Bloomberg.
Zenabis is completing its ramp-up phase of major financing and construction, and is now a significant cultivator of cannabis," Jonathan Anthony, director of corporate communications for Zenabis, told BNN Bloomberg. "Now, in 2020, Zenabis is shifting its attention to supply chain efficiency and execution. We have the right team to make Zenabis a profitable, viable long-term industry leader."
Like other cannabis companies, Zenabis has struggled to turn a profit in Canada's retail cannabis market.
CannaCraft —40 layoffs
Company: CannaCraft
What it does: California cannabis cultivator and retailer
Layoffs: 40 employees or 16% of its workforce.
What went wrong: CannaCraft laid off 40 employees or 16% of its staff in November. The company cited "slower-than-anticipated growth" of the legal cannabis market in California, per Marijuana Business Daily.
Founded in 2014, CannaCraft raised a $34.9 million Series A funding round in April.
Acreage Holdings — 40 workers
Company: Acreage Holdings
What it does: US cannabis cultivator and retailer
Cuts: 40 eliminated positions
What went wrong: Acreage Holdings eliminated 40 positions in late February in a "strategic reassessment" of its spending, Business Insider reported.
A source with direct familiarity with the cuts said they extended across the organization and weren't concentrated in one specific team or department. Acreage Holdings has well over 250 employees, a company spokesperson said.
"As the life cycle of our business continues to mature, we continually assess our resources against our corporate strategic objectives," Acreage Vice President of Communications Howard Schacter said in a statement. "When we conducted our last assessment we identified functions across certain departments and in our Form Factory business unit in places that are not as critical today as when they were first acquired."
Acreage reported its fourth-quarter earnings in February, which included a $50.5 million loss while bringing in $21 million in revenue — well below most analyst estimates. The company attributed the losses to delays in cannabis store openings across the states in which it operates.
Eaze - 36 layoffs
Company: Eaze
What it does: Cannabis delivery platform, based in San Francisco.
Layoffs: 36 workers or 20% of its staff in October. The company also replaced its longtime CEO, Jim Patterson, with Rogelio Choy, formerly the startup's COO.
What went wrong: Eaze is facing a protracted legal battle with Toronto-based cannabis company DionyMed, after DionyMed alleged Eaze was using shell companies to hide credit card charges for cannabis products.
In August, Business Insider broke the news that Eaze was seeking to raise another $50-75 million at a $300-400 million valuation on top of the $65 million the company had raised in December.
The startup has been forced to scale back its lofty ambitions of delivering $1 billion worth of cannabis. The company said in documents obtained by MarketWatch that it would sell about $412 million worth of cannabis products on its platform in 2020.
Greenlane Holdings — 31 layoffs
Company: Greenlane Holdings
What it does: Cannabis vape and accessories distributor
Cuts: 31 eliminated positions
What went wrong: Like many other cannabis and cannabis-adjacent companies, Greenlane CEO Aaron LoCascio pointed to the recent industry turmoil as a reason for the layoffs, in a memo obtained by Business Insider.
"As rapidly as we grew along with the boom of the legal cannabis industry and the swift rise of JUUL, we have also been challenged by the recent and strong headwinds facing the industry," LoCascio said in a memo. "While difficult, we truly believe the changes we are making are necessary and present an opportunity to position our company for a stronger future," the memo reads."
Greenlane's stock has lost 88% of its value since it went public in April, plummeting below $2 a share.
Zenabis — 22% workforce reduction
Company: Zenabis
What it does: Canadian cannabis cultivator
Layoffs: 22% of total workforce, including 33% of positions in its Vancouver headquarters.
What went wrong: Zenabis said in March that it would reduce its overall headcount by 22%, including cutting 33% of jobs in its Vancouver corporate headquarters, in an effort to cut costs.
"With our collective efforts, we continue to execute on our plan with a focus to achieve operational excellence as well as become cash flow positive in 2020. Various measures are being taken to ensure continued execution of our plans, which include expanding our exports into the European medical cannabis market and a rationalization of our cost structure," Zenabis CEO Kevin Coft said in a statement.
In the statement, Zenabis said "persistent competition from the low-cost illicit market" in Canada will continue to put pricing pressure on cannabis cultivators.
Harvest One — 20% of workers
Company: Harvest One
What it does: Canadian cannabis cultivator
Cuts: Eliminated 20% of its workforce
What went wrong: Harvest One said it had eliminated 20% of its workforce since November, and instituted a "comprehensive salary reduction program at the senior management level" in order to cut costs company-wide.
"In light of industry challenges, Harvest One realigned its strategy to focus on our core strengths of brands and distribution and undertook significant cost cutting initiatives to rightsize the organization," Harvest One CEO Grant Froese said in a statement.
Sundial — less than 10% of its workforce
Company: Sundial Growers
What it does: Canadian cannabis cultivator
Cuts: Less than 10% of employees, CEO, COO, and executive chairman departed
What went wrong: Sundial Growers laid off "less than 10% of employees" in January in an effort to cut costs.
Former CEO Torsten Kuenzlen, COO Brian Harriman, and executive chairman Ted Heller left the company on January 30 as well, Sundial said in a statement.
"As mentioned in our January 30 news release, we have implemented several streamlining and efficiency initiatives to position the Company for long-term, sustainable growth. These initiatives include work force optimization, along with enhancement of facility workflows and processes, realignment of product lines and product formats to areas of stronger demand and a heightened discipline in cost management," a Sundial spokesperson told Business Insider in an emailed statement.
A shipment of Sundial's cannabis was rejected by a partner after bits of debris — including rubber gloves — were found in the product, MarketWatch reported in August.
Flow Kana — 20% of employees
Company: Flow Kana
What it does: California cannabis distributor
Layoffs: 20% of employees (number of employees not disclosed).
What went wrong: Flow Kana, a California cannabis distributor, announced it was laying off 20% of its workforce on Thursday, November 14. The company did not disclose the exact number of employees affected.
Flow Kana blamed the lack of retail cannabis stores in California and said the "realities and size of the market" has proven to be much smaller than initially anticipated.
In a statement provided to the Sacramento Bee, Flow Kana CEO Mikey Steinmetz said the "alarm bell is ringing" for California cannabis companies and urged the state to help remedy the situation.
Grupo Flor – 30 layoffs
Company: Grupo Flor
What it does: California cannabis cultivator and retailer
Layoffs: 30 employees or 35% of its workforce.
What went wrong: Grupo Flor laid off 30 employees earlier in November after a planned investment fell through. The company also put its plans to invest in a Colombia cultivation center on hold.
"It's not the end of the world. It's just a difficult time in the industry for everybody," Grupo Flor CEO Gavin Kogan told Marijuana Business Daily.
Canndescent — 16 layoffs
Company: Canndescent
What it does: California cannabis retail brand
Layoffs: 16 layoffs on September 5
What went wrong: The California cannabis company Canndescent quietly laid off 16 employees and froze hiring for six open positions just before closing a funding round in September, according to a memo obtained by Business Insider.
The memo, written by Canndescent's chief people officer, Kerry Arnold, was sent on the evening of September 5.
Five days after the memo went out, Canndescent closed a $27.5 million Series C funding round that gave the startup a valuation of $200 million to $300 million, Business Insider reported at the time.
"Sadly we too have been impacted by the drying up of capital markets," Sedlin said in an emailed statement to Business Insider. "As a result we've had to make difficult decisions with regards to valued personnel. These decisions are never easy. We remain hopeful California regulators will act swiftly and partner with our industry to preserve as many jobs as possible through sensible public policy."
Pasha Brands — 12 layoffs
Company: Pasha Brands
What it does: Canadian cannabis brand
Layoffs: 12 layoffs on November 21, or 24% of the workforce.
What went wrong: Vancouver-based Pasha Brands in December announced it is laying off a dozen employees across its communications and client services divisions.
"Yesterday the company made the difficult, but necessary choice, to lay off some of its employees in both its communications and client services divisions. At the same time as letting some go, it has repurposed other employees, who will focus on commercializing these iconic pre-legalization brands," Pasha Brands CEO Jason Longden said in a statement.
Mile High Labs — 20 layoffs
Company: Mile High Labs
What it does: Colorado-based CBD manufacturer
Layoffs: 20 staffers in January, or roughly 10% of total workforce
What went wrong: Mile High Labs laid off 20 staffers on Thursday, concentrated among entry-level sales roles, the Colorado-based CBD manufacturer's chief financial officer, Jon Hilley, told Business Insider in an interview.
"It's part of the learning process as you go from a company of 30 people to 250 people in under a year," Hilley said. "The business has to evolve."
Mile High Labs purchased an $18 million CBD manufacturing facility in Broomfield, Colorado, and relocated the company's operations there last fall.
Westleaf — 11 positions
Company: Westleaf (now known as Decibel Cannabis Company)
What it does: Canadian cannabis retailer
Cuts: 11 eliminated positions
What went wrong: Westleaf eliminated 11 positions as part of a company-wide cost-cutting effort, it said in a February statement.
"Despite the headwinds the industry currently faces, consumer demand for quality cannabis products is strong and we are optimistic about the future of the industry" said Ben Sze, President and CEO of Westleaf. "We will continue to be fiscally disciplined and uncompromising in our quest to forge a meaningful relationship with consumers."
After combining with We Grow BC, the combined company announced that it will rebrand to become Decibel Cannabis Company.