As part of the cost-savings plans indicated in its third-quarter results, Aurora Cannabis announced Thursday that it will close its Aurora Sky facility in Edmonton.
“We will continue to hire a talented team in Alberta, run an office in Edmonton, and remain committed to our business in Canada as a whole,” Michelle Leffler, vice president of communications for Aurora Cannabis, told Global News in an email.
This decision was not taken seriously. The company continues to make challenging and responsible changes to improve our business to meet the challenges and opportunities of the cannabis industry and position Aurora for long-term global success.
“Our patients and consumers in Alberta can continue to rely on Aurora as the premium cannabis provider they can trust,” wrote Leffler.
“Aurora’s roots will always be in Alberta. We are grateful to all Albertans for their continued support of our business. Most importantly, we want to acknowledge the hard work of our employees and thank them for their contributions.
“During this transition, we are committed to supporting all employees affected by this decision and will provide a full range of resources to assist them.”
For their part, officials at Edmonton International Airport are considering the affected staff and workers.
“Aurora Cannabis is a valued tenant at EIA, and we are sorry to see this announcement regarding their Aurora Sky facility,” said Myron Keane, Vice President of Air Services and Business Development at EIA.
“We need to have further discussions with the company before we can comment on what the future looks like for this building and the Environmental Impact Assessment.”
Aurora Cannabis invites Edmonton home with its global headquarters
Aurora Cannabis established its Edmonton headquarters in 2018.
The Edmonton-based company announced job cuts in December 2020. The workforce at Aurora Sky near Edmonton International Airport – one of the world’s largest cannabis facilities – was reduced by 75 percent. This means that 214 workers lost their jobs at that time.
Aurora Cannabis to close South Edmonton facility
In September 2021, the company announced that it would close its holdings in Aurora Polaris in Edmonton as part of a plan to streamline its operations.
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An Alberta business expert says this shutdown reflects how the cannabis market is evolving.
“When the market first started, we didn’t know what it would look like five years later, or even three years down the road,” said Kyle Murray, dean of Alberta Business School.
“It turns out – perhaps not surprisingly – that this price is very important to consumers. Although the Aurora Sky facility has been built with a lot of technology and to create a truly premium product, it is not as cost-effective as some of the others. In a market where consumers want Lower prices, this facility wasn’t really designed to offer.”
When the facility opened, Murray said, it was clear that it was built to produce an excellent product, but that it comes at a higher price and cost.
“I remember thinking at the time… it was really a high-end facility and would really require at least a portion of the market to be willing to pay higher prices.”
The cannabis industry is now adapting to what the market – and consumers – want, he said. He said that demand is not at the level of supply.
“Maybe, in the initial excitement, people overestimated the demand and how many people wanted the product and I think they underestimated how sensitive people were to price and how important price was in the decision.
“Demand is not what we initially thought it might be, prices are low and there is more pressure from the consumer for prices to go down.”
Aurora Cannabis is getting smaller part of the “right size” industry: Analyst
On Thursday, Aurora Cannabis outlined plans to save an additional $70 million to $90 million by the end of the first half of fiscal year 2023.
Its efforts to save cost of goods sold “now include the closure of the Aurora Sky facility in Edmonton (previously announced to be operating at approximately 25 percent capacity), in line with our diversified business portfolio, a prudent approach to capital allocation, and the strategy in the Canadian adult use market to focus on margin premium classes. the above “.
The financial update showed that Aurora Cannabis net medical cannabis revenue was up eight percent from the previous year. The company said revenue growth was driven by the international medical cannabis business.
Net consumer revenue from cannabis decreased to $10.3 million from $14.4 million in the prior quarter, primarily due to “industry-wide pricing pressures across our portfolio exacerbated by retail store closures in key counties.”
“During the third quarter, we continued to focus on our global medical cannabis business because it is both defensive and stable, with a cash margin in excess of 60 percent,” CEO Miguel Martin said in a Thursday press release.
“With regard to the Canadian adult use market, we continue to adapt to current conditions, are excited about future contributions from the Thrive team, and are committed to a continuous stream of innovation, including the development of our differentiated strategy.”
Edmonton-based Aurora Cannabis is laying off employees and closing 5 Canadian locations
In November 2020, Aurora Cannabis said it would indefinitely halt operations at its Aurora Sun drug in Medicine Hat, a decision that would result in the layoffs of about 30 employees.
In June of that year, the company laid off 700 workers and announced plans to cease operations at five facilities in Saskatchewan, Ontario, Alberta and Quebec.
A behind-the-scenes tour of the Aurora Sky
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