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On December 9, 2020, Canopy Growth Corporation announced the closure of five of its Canadian production sites “as part of its plan to reduce operating costs, improve margins and align its production capacity with the current demand of the industry.” The site closures include: St. John’s, Newfoundland and Labrador, Fredericton, New Brunswick, Bowmanville, Ontario, Birch Hills, Saskatchewan and Edmonton, Alberta. Consequently, the Company expects to incur pre-tax charges of approximately $350-400 million, consisting of approximately $320 million of non-cash asset impairments relating these production sites in the third quarter of the Company’s fiscal year ending March 31, 2021. The remaining charges of up to $80 million are cash charges primarily attributable to employee severance, contract and existing obligation terminations, outside services and other related cash shutdown costs, which are expected to be substantially recorded in the third and fourth quarter of the Company’s fiscal year ending March 31, 2021. The Company expects the closures to result in annual cost savings in excess of $50 million.
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