Neptune Wellness, the company behind cannabis brands Mood Ring and PanHash, intends to divest its Canadian cannabis business in an attempt to rebrand itself as a consumer packaged goods company.

The move, announced today, would include the sale of Neptune’s Sherbrooke, Quebec facility, and staff layoff. The company says the facility is appraised at $21 million.

The move would mean laying off 50% of Neptune’s workforce, accounting for an over 30% reduction of total payroll costs and an estimated annual cost savings of CAD$5.8 million. 

“Today’s decision, while difficult, is a step that is necessary to best position Neptune for long-term success,” said Julie Phillips, Neptune’s Chair of the Board in a company press release. 

“Together with management, the Board has worked carefully to explore all possible avenues and we are confident that the decision to exit the Canadian cannabis sector and realign focus on our consumer goods brands is the best next move for both the Company and its shareholders.”

Neptune managed an array of cannabis products sold under Mood Ring and PanHash, with products supplied by cannabis growers across the country, including several micro cannabis cultivators and producers. 

With the planned divestiture of its cannabis business, Neptune is renewing its focus on the core brands – Sprout Organics and Biodroga Solutions – that align closely with future consumer trends and show a greater potential for future growth and profitability.

While the number of federally licensed cannabis producers continues to increase, many large companies have shut down facilities in the last few years as companies struggle to meet initial investor expectations.

Featured image via pancakenap.com