SNDL cuts over 30% workforce at Kelowna manufacturing facility

Canadian cannabis producer SNDL (SNDL) on Tuesday said it has reduced more than 30% of the workforce at its Kelowna manufacturing facility as part of a cost-cutting measure.

The Alberta-based company said its third-quarter profitability was impacted by a C$52 million non-cash goodwill impairment, as well as C$6 million in other impacts, mostly driven by inventory adjustments.

SNDL, which posted a 2.5% decline in net revenue during the third quarter, said its cannabis operations segment remained below expectation.

“While the quarter was impacted by inventory issues arising from the first half, we are taking decisive action to simplify the portfolio, reduce costs and concentrate resources on product categories where SNDL’s manufacturing capabilities, distribution reach and retail insights can support sustainable returns,” the company said, as per a filing.

The company stated that benefits from these cost reductions taken during the quarter are expected to begin contributing to results in Q4.

SNDL said most of the revenue decline in the third quarter was attributable to its exit from the “unprofitable domestic dried flower category” and its “increased focus on higher-value products.”

The company also said it is initiating a strategic review of the Cannabis Operations segment, which can include a range of alternatives, including from potential asset divestitures to larger productivity initiatives.