Canopy Growth says it has entered into an agreement to sell its Hershey Drive facility in Smiths Falls, Ontario, back to Hershey.
The cannabis producer famously purchased and took over the facility when licensed in 2013.
Earlier this year, the company announced it was laying off 800 workers and would move to an “asset-light model,” moving cannabis flower production from Smiths Falls to its Mirabel, Quebec facility. Rumours have been circulating for months that Hershey would be repurchasing the factory.
The facility will be sold to Hershey Canada, Inc. for approximately $53 million.
“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” said David Klein, Chief Executive Officer of Canopy Growth. “Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk. Once again, we have demonstrated Canopy Growth’s ability to achieve significant organizational and operational change to position the Company for future growth in the Canadian market.”
“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” added Jason Reiman, Chief Supply Chain Officer, The Hershey Company.
Once the sale is complete, the Smiths Falls facility will be the seventh property sold by Canopy Growth for an aggregate gross of approximately $155 million since April 1, 2023. Canopy says the proceeds of the sale will pay down their senior secured credit facility.
The sale of the facility follows the centralization of post-harvest manufacturing at the Company’s former beverage facility in Smiths Falls and the consolidation of all flower cultivation in the Company’s purpose-built sites in Kincardine, Ontario, and Kelowna, British Columbia.
Canopy’s stock fell below $1 a share earlier this year, causing it to be delisted from the TSX.
