Organigram Holdings Inc. (TSX: OGI) said it expects to impose a round of temporary layoffs as the Canadian cannabis producer scales back operations during the COVID-19 outbreak.
After taking a look at production and staffing levels at its Moncton facility, the New Brunswick-based company said it has decided its workforce will have to be “materially reduced” to facilitate social distancing during the coronavirus pandemic.
Although the producer didn’t provide specifics on how many of its 800 staffers would be temporarily laid off, it did say the move “will result in corresponding production and packaging reductions.”
Organigram said it will reallocate its remaining workforce as needed, use inventory already on-hand and focus on leveraging its most automated lines of production.
“We continue to monitor this rapidly changing situation and will make the decisions necessary to ensure the safest environment for our employees and their families as well as protecting the best interests of our business and our stakeholders,” CEO Greg Engel said in a statement.
COVID-19: Patient Support and Shipping Updates:
We remain committed to patients during this time. For updates on potential impacts to package delivery service, or other factors likely to affect delivery/supply during this period, visit our Latest section. https://t.co/p4aS1lsbOR
— Organigram (@discoverOGI) March 20, 2020
The company said it will remain focused on delivering products to its medical cannabis patients, while also keeping its staff safe during this uncertain period.
A spokesperson for the producer told Mugglehead last week that it’s seen “significant growth recently on patient orders.”
He said the company was currently reviewing its continuity business plan to prepare for an emergency situation, which could cause production shutdowns and disruptions to supply chains and sales channels.
Organigram was among 74 representatives from the Canadian cannabis industry that sent a letter to Ottawa late last week calling on the Trudeau government for equitable access to $10 billion in federal COVID-19 stimulus funding. Thus far, cannabis has been left out of federal bailout packages for Canadian businesses.
Canopy Growth (TSX: WEED) and Lift & Co. (TSX-V: LIFT) are other Canadian cannabis operators that have also announced temporary shutdowns and layoffs due to the corornavirus outbreak.
Organigram also said Monday it gained Health Canada licensing for its two-floor production facility to support new extraction capabilities as well as packaging of flower, pre-rolls and cannabis 2.0 products.
Top image via Organigram