The Globe and Mail reports in its Friday edition that amid a downturn in the sector, Canada's legal pot companies are rolling back their cultivation footprint. The Globe's Mark Rendell writes that Aurora Cannabis announced Thursday that it is deferring "for the foreseeable future" the completion of a 1.6-million-square-foot growing facility in Medicine Hat and is halting construction work on a greenhouse in Denmark. Hexo, which last month reported a sharp drop in revenue, closed one of its greenhouses in Ontario and laid off 200 employees. Green Organic Dutchman Holdings announced in October that it was delaying indefinitely the completion of a 1.3-million-square-foot greenhouse in Quebec.
The move to reduce cultivation capacity is a dramatic shift from a year ago. In the lead-up to legalization, Canadian marijuana companies expanded their real estate footprints at an extraordinary pace, buying old vegetable greenhouses and building indoor growing operations worth tens or hundreds of millions of dollars.
What the recent wave of earnings has shown, however, is that growers are producing far more cannabis than provincial wholesalers are able to sell along to legal stores. Ontario has only 24 legal outlets.
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