Nfld. & Labrador

Canopy Growth pulls plug on St. John's facility, and 4 more, despite assurances of 'full steam ahead'

The production facility was set to open in the White Hills area of St. John's, which would have made it the company's largest site in Atlantic Canada.

Other sites in Fredericton, Edmonton, Bowmanville to close; 220 people out of a job

The 150,000-square-foot facility was set to open in the White Hills area of St. John's, which would have made it the company's largest site in Atlantic Canada. (Mark Quinn/CBC)

Canopy Growth is folding in several provinces, including Newfoundland and Labrador — which means the St. John's production facility won't even open its doors. 

That dramatic development comes just nine months after Liberal MHA Bernard Davis, then industry and innovation minister, said he had been told by top company executives plans were on track. 

"I spoke to the management of Canopy. They assured me that they are full steam ahead with the process, that we have a $90-million facility at East White Hills Road," Davis said in March. 

The 150,000-square-foot facility was set to open in the White Hills area of St. John's, which would have made it the company's largest site in Atlantic Canada.

Wednesday's development came via media release from the company. 

"These decisions are never easy and we want to thank the employees impacted for the contributions they made to Canopy Growth, as well as the government of Newfoundland and Labrador for supporting Canopy Growth as we worked to build this production facility," said Jordan Sinclair, Canopy Growth's vice-president of communications, in the statement.

Sinclair would not be doing interviews, said a spokesperson. 

Other sites where Canopy Growth will stop operations include Fredericton, Edmonton, and Bowmanville, Ont.

In total, 220 employees will be out of a job. 

WATCH: Mark Quinn reports on how Canopy Growth's closure is playing out with N.L. politicians: 

"This was a difficult decision but I believe it is the right one," David Kline, CEO of Canopy Growth, is quoted as saying in the media release. 

The company said the closures, and job cuts, will save between $150 million and $200 million, which will contribute to "accelerating our path to profitability," said the media release.

Numbered company and a controversial deal

The original deal between the N.L. government and the company generated controversy when it was struck in December 2017. The government offered $40 million in tax remittances in exchange for Canopy establishing a production facility in the province and a guaranteed supply to the local market.

Industry Minister Andrew Parsons said the provincial government has not given the company anything at this point, clarifying rumours that government had given the company $40 million.

A drone captured this image of the Canopy Growth cannabis production facility in St. John's, which won't even open its doors, as the company is pulling out of operations in Newfoundland and Labrador and other provinces. (Submitted by Jordan Sinclair)

"What it is there's a $1.9 million that's been paid through remittances, which is a complex process. But that $1.9 million, which has been paid, will be paid back to government before the weekend," Parsons told reporters on Wednesday. 

"Right now this process has cost us zero dollars. This hasn't cost us a cent. Do I like the fact that there's an empty building over there where we were hoping to have a bunch of people working? Of course that's disheartening."

The facility was expected to produce 12,000 kilograms of dried cannabis per year, create 146 jobs and ensure at least 8,000 kilograms would be available for distribution and sale in Newfoundland and Labrador alone.

Canopy's lease payments would have been nearly $5 million per year over five years, with the option to buy the facility at the end of the term.

One aspect related to the deal that dominated provincial politics for weeks in the province — and detailed in this CBC Investigates story — was the fact that a numbered company bought the land shortly before leasing it to Canopy. 

The deal even become one of the issues Auditor General Julia Mullaley said her office would investigate, calling it "an important public policy issue" at the time.

Grim developments for other Canopy sites

It was in March, when Davis made his comments, that Canopy Growth axed 500 employees and closed two warehouse production facilities in British Columbia. 

It was Tory MHA Lloyd Parrott who raised the issue, and said the company's reassurance was of little comfort. 

One month before the B.C. facilities were shut, a Yorkton, Sask., site was also closed. The company detailed other changes at that time, which included ceasing farming operations in Springfield, N.Y., and at its cultivation facility in Colombia. 

PC Leader Ches Crosbie calls the project a failure on the government's part to create jobs, growth and the hope that there is an economic future in the province. 

"The people who are going to suffer are the people who would have had the jobs and the rest of us who would have benefited from the taxes paid by a viable enterprise," he said. 

"This enterprise was never viable without the subsidies the Liberals put up for it."

Parsons said the fold up is not a failure on the province's part, citing other Canopy closures across the country. 

"This is a company that got too big, too fast and I think they will admit this," he said.

"I feel bad for the employees of the company. But this is a nation-wide issue that they're facing right now as a fairly large publicly traded company."

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