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Canopy Growth Sells Smiths Falls Facility to Hershey Canada

The deal helps Canopy move towards an asset-light operating model.

Canopy

Canopy Growth has entered into an agreement to sell its Hershey Drive facility in Smiths Falls, Ontario, as part of the company's transformation to a simplified, asset-light operating model.

The plant will be sold to Hershey Canada for some CAD$53 million (about USD$40 million), but Canopy will retain its post-harvest manufacturing facility in the area

"This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet," said David Klein, Canopy Growth CEO.

According to Jason Reiman, chief supply chain officer at Hershey, the investment is another example of the strategic investments the company is making in its supply chain network.

Once the deal is closed, Canopy will have sold seven properties for an aggregate gross of approximately CAD$155 million since April 1, 2023.

The sale follows the centralization of post-harvest manufacturing at Canopy's former beverage facility in Smiths Falls, as well as the consolidation of all flower cultivation in purpose-built sites in Kincardine, Ontario, and Kelowna, British Columbia.

By centralizing core activities in purpose-built facilities and working with contract manufacturers for edibles, beverages and vape products, Canopy hopes to continue delivering products at improved margins while reducing execution risks and investment in permanent capacity.

The deal is subject to customary closing conditions.

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