The Chief Executive Officer (CEO) of Tilray has backed out on a deal to grow cannabis from its High Park Gardens facility in Leamington, Ontario. A British Columbia-headquartered cannabis cultivator, Tilray is the latest in a string of Canadian businesses to reveal it will be closing the doors of its grow facility. 

CEO Brendan Kennedy, issued a news release after markets closed on Tuesday, May 26. The greenhouse closure, he says, will ensure the company remains profitable amid one of the most unpredictable years in human history. 

High Park Gardens cannabis greenhouse closure “will immediately put Tilray in a better position to achieve our goals of driving revenues across our core businesses and working towards positive adjusted EBITDA by the end of 2020,” explained Kennedy, who has been the Canadian cannabis company’s CEO since January 2018.

A great deal of licensed plant-growing space will be going to waste as part of Tilray’s plans to shut-down High Park Gardens operations — one of the company’s many owned cultivation facilities. To be precise, the greenhouse that was relinquished by Tilray covered 406,000 square feet. 

Initially, the company intended on buying the cultivation space as part of a deal announced with Natura Naturals Holdings at the beginning of 2019; valued at CAD $70 million, which is equivalent to USD $50.8 million.

Two of Tilray’s cannabis cultivation sites in Ontario will continue operating

Although Tilray won’t be churning out as much cannabis as it may have anticipated at the start of 2020, the closure of its High Park Gardens greenhouse shouldn’t throw the company off-track; not too much, anyways. 

Why? Because the Canadian cannabis company will still be actively producing cannabis and extracts from its High Park Farms cultivation and processing facility in Enniskillen, Ontario. In addition to this, the company has confirmed that its High Park London processing and manufacturing facility in London, Ontario, will continue functioning as normal. 

Although projected profits from the High Park Gardens greenhouse have been flushed down the drain, the Leamington facility’s closure means that Tilray can retain net savings of approximately $7.5 million. An excerpt from the company’s news release says that it can “avoid significant ongoing capital expenditures” thanks to the closure of its Leamington cannabis growhouse, which will be shuttered within the next six weeks.

Kennedy says that Tilray’s officials are constantly assessing their needs and adjusting business practices to stay in alignment with the ever-evolving legal cannabis landscape. The Canadian cannabis company’s news release highlighted the company’s strong desire to continuously produce and provide consumers with “world-class products and deliver positive results for our stakeholders.”

“The decision to close a facility is never easy but we are confident that this will immediately put Tilray in a better position to achieve our goals of driving revenues across our core businesses and working towards positive adjusted EBITDA by the end of 2020,” continued Kennedy, adding that, “we are very confident our existing operations team will continue to serve our valued patients and customers with no interruption. On behalf of myself, the rest of our executive team and our colleagues across the organization, I’d like to extend my sincere gratitude to the team at High Park Gardens for their contributions to Tilray and High Park.”

Numerous Canadian cannabis cultivators ditched greenhouse deals this year

Plans to produce large quantities of cannabis for the legal industry have been deserted by numerous Canadian growers this year, with both Canopy Growth and The Green Organic Dutchman kissing goodbye to facilities of their own. Aurora Cannabis is another Canadian cannabis cultivator that was recently spotlighted in the news for selling off a growhouse in Exeter, Ontario.

Despite the fact that these companies may have made their decisions as a means of saving money, Aurora wasn’t overly lucky, what with the company taking a financial hit when it agreed to sell its greenhouse for less than the original purchase price. In Tilray’s case, production will stop and outgoing expenses can be saved. However, it remains uncertain as to whether or not the High Park Gardens facility – where operations came to an abrupt halt in early May following a positive employee COVID-19 test – will be sold.

“On behalf of myself, the rest of our executive team and our colleagues across the organization, I’d like to extend my sincere gratitude to the team at High Park Gardens for their contributions to Tilray and High Park,” concluded Kennedy.