By J Rodrigo Safdiye.
Canopy Growth Corp (NYSE: CGC), a Canada-based cannabis multinational, is laying off 15% of its workforce in Latin America, citing concerns around the region’s regulatory infancy and the company’s intent to focus on near-term revenue-generating investments, according to a report by Marijuana Business Daily.
The company has narrowed its Latin American workforce from 92 to 78 employees, Niklaus Schwenker, director of communications and strategy for Canopy Growth Latin America, reportedly said in an email.
The company completed “limited adjustments” to its Latin American structure “to streamline operations and prioritize key markets.”
One of the countries most affected by the layoffs is Argentina, although the company remains active through its regional team.
Colombia, however, remains a priority, as well as Jamaica.
Green Is Not Always Good
Regulations in the continent are still green. Canopy’s actions confirm the company shifted its priorities from market building to commercial sales and revenue-generating investments.
Although several Latin American countries have legalized medical marijuana since 2017, regulations are still uncertain and its internal market almost null.
This is stopping big businesses from making new investments due to a lack of meaningful revenue opportunities.
MJBizDaily also pointed out how many companies in Colombia have been unable to register cultivars, meaning they won’t be able to hit the market in the anticipated time frame.
Argentina legalized medical cannabis in 2017, but regulations are still almost nonexistent, failing in providing a clear path for big investors.
Brazil, Mexico and Peru are waiting for regulation and reforms, but there is no certainty, so companies are unable to materialize significant business opportunities.
Uruguay, the most advanced country in terms of cannabis regulation in the region, has grappled for years with short supply, something the government expects to improve as new suppliers become operational.
Jamaica steps up as one of the biggest potential markets in the Caribbean, but business opportunities are obstructed by a dysfunctional banking system and delayed export regulations.
Canopy Growth’s stock closed the week at $21.46, up 12.47% on Friday.
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