1-3rd of Canada’s cannabis greenhouse capacity taken offline

Added on 10 November 2023

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1-3rd of Canada’s cannabis greenhouse capacity taken offline

One after another, many of Canada’s largest cannabis greenhouses and indoor grow operations have been sold or mothballed as the industry continues to search for a supply-demand equilibrium after years of overproduction.

The facilities, each costing anywhere from 100 million Canadian dollars ($73 million) to more than CA$500 million, are being closed for various reasons.

Some of the operations crashed into the cannabis industry’s hard macroeconomic realities: Canadian cultivators bankrolled and licensed too much cultivation capacity before and after adult-use legalization in 2018, which led to large-scale overproduction and plunging prices for low- to mid-quality products.

Companies also shuttered greenhouses because they failed to be as cost-effective as anticipated by both executives and investors.

And some were closed after companies, saddled with millions of dollars of debt – sometimes owed mostly to the Canadian government – became insolvent.

When cannabis producer Phoena Group, formerly known as CannTrust, was granted creditor protection and closed its facility in Niagara, Ontario, about 450,000 square feet of cultivation space was removed.

Photo by Sebastian Herrmann on Unsplash

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