CannTrust Holdings Inc. will temporarily let go of 140 employees after the Canadian government suspended its license to produce and sell cannabis.
The Vaughan, Ontario-based cannabis producer expects the layoff to save about C$400,000 each month, but the company will face severance costs of up to C$800,000 if the employees are not recalled within 35 weeks. CannTrust previously announced that it would reduce its workforce by 20% to save up to C$9 million in annual costs.
The news follows Health Canada's decision to suspended CannTrust's licenses after it found the company was growing cannabis in five rooms at its Pelham, Ontario-based greenhouse facility, even though it was not authorized to do so. The company fired its CEO over the violations.
Earlier this month, CannTrust announced plans to destroy assets and inventory worth about C$77 million to further its efforts to regain full regulatory compliance. Before that, it said it was undertaking a strategic review that could potentially result in full or partial sale of the company.