Following the close of the market on Tuesday, Canadian cannabis producer Tilray (NASDAQ: TRLY) said it was restructuring and cutting roughly 10% of its workforce. The stock was moving almost 2% higher on the news in pre-market trading to $18.50.
“By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry, which will drive value for our investor and employee shareholders,” said Chief Executive Brendan Kennedy in a statement.
“Tilray restructured its global organization to meet the needs of the current industry environment and for continued growth in 2020 and beyond,” read the statement.” These changes include an approximately 10% reduction in staff.”
“The tough decision to eliminate roles has not been taken lightly. We’re extremely grateful to our past and current employees for their contributions,” Kennedy said.
Kennedy also noted that the company would focus on its international medical cannabis business, science and research, the domestic recreational market and Manitoba Harvest hemp foods, a company it acquired last year for $420 million.
The company made its first shipment to Israel at the beginning of January through an agreement with Canndoc Ltd. a wholly-owned subsidiary of InterCure Ltd. (TASE: INCR), through its wholly-owned subsidiary, a Portugal Unipessoal Lda. Tilray has also agreed to purchase up to 5 tonnes of GMP certified whole flower from Canndoc beginning in mid-2020. If future Israeli regulations allow, the whole flower will be shipped to Tilray’s Portugal facility and turned into a GMP-certified finished product to distribute across Europe. Otherwise, the whole flower will be developed into finished medical cannabis and distributed as a Tilray-Canndoc branded GMP-certified finished product in Israel to further support local supply needs
The news comes just two weeks after the company named two strategic hires: Jon Levin as Chief Operating Officer, who was formerly with Revlon, and Michael Kruteck as Chief Financial Officer, who was formerly with Molson Coors and Pharmaca. Mark Castaneda, Tilray’s current CFO, will take on the role of Strategic Business Development and continue to advise the company and assist in Kruteck’s transition.