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Calgary-based cannabis producer-retailer SNDL says it’s once again pruning its workforce as part of a money-saving restructuring effort.

On Tuesday, the company once known as Sundial Growers said it’s trimming 106 full-time positions, the latest slim-down for the firm and one in a long line of such moves within the Alberta-based legal cannabis sector.

In a press release, SNDL said the “restructuring project (is) aimed at reducing corporate overheads and improving the efficiency of its organizational structure to position the company for future growth.”

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It goes on to say the effort is expected to result in $20 million of annual savings “driven primarily by the optimization of corporate overhead spending. The restructuring will require a one-time investment of $11 million over the next 18 months.”

The restructuring will consolidate the company’s operations into a single unit, said Zachary George, CEO of SNDL.

“We are committed to enhancing our organizational effectiveness by streamlining processes while leveraging technology and automation,” he said.

While a licensed producer, SNDL is also one of the largest cannabis and liquor retailers in Canada, operating outlets such as Value Buds, Firesale Cannabis, Spiritleaf, Ace Liquor and Liquor Depot.

According to its U.S. securities filings, the company and its subsidiaries employed 2,516 people as of Dec. 31, 2023.

Cannabis industry has seen layoffs over the years

In February of last year, SNDL announced it was cutting 85 jobs.

That followed another blow to Alberta’s pot industry when Edmonton-based Aurora Cannabis trimmed off 12 per cent of its workforce in June 2022, a restructuring effort after announcing it was closing three of its facilities.

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Those job losses in the industry extended outside Alberta when Canopy Growers of Smiths Falls, Ont., announced in February 2023 it was laying off 800 employees — 35 per cent of its workforce — and shuttering its facility, formerly a Hershey plant.

Those in the industry say high rates of government taxation and regulation along with a still-thriving black market have stifled the sector ever since recreational cannabis was legalized in October 2018.

But there have also been admissions that some companies have over-extended themselves.

And the industry finds itself with a massive glut of cannabis on its hands, which has dramatically lowered product value and led to a destructive price war.

‘Things need to change’

Last March, the final report of the review of the federal Cannabis Act was released but many in the industry say its 54 recommendations and 11 observations fall far short of ensuring their problems are addressed.

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The review panel encourages the federal government to review its excise tax model that was created at a time when the price of dried cannabis flower was significantly higher than it is today.

But the president of the Cannabis Association of Canada, which represents licensed producers, says he’s seen no indication that will happen anytime soon.

“We’re five years into a period of retrenchment — a lot of these companies are down to the bone,” said Paul McCarthy.

“There is hope if the government comes to the realization that if this sector stands a chance, things need to change.”

With the federal excise tax, producers are effectively paying a 30 to 40 per tax on their product, which is ultimately ruinous when cannabis has gone from $10 a gram to around $3, he said.

While there were many wildly optimistic, speculative investors who jumped into the industry at the start of legalization, most of those are long gone, said McCarthy.

“The people left are sophisticated players and they can’t make it work,” he said.

Governments must also crack down far more seriously on the illicit operators, whose market share is difficult to calculate, though some estimates place it at 40 per cent, said McCarthy.

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X (Twitter): @BillKaufmannjrn

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