Cannabis company lays off 50 workers in Alberta amid industry struggles

Atlas Global is laying off around 50 workers and shutting down a cannabis facility in rural Alberta.

The site in the hamlet of Gunn, Alta., about 60 kilometres northwest of Edmonton, both grew and packaged cannabis. The company announced last week it will move all packaging operations to Chatham, Ont. 

In a news release Friday, Atlas Global CEO Bernie Yeung said shutting down the Alberta facility was difficult but necessary. 

"Ceasing operations in Gunn, Alberta is an important step towards executing on our objective of reducing costs, streamlining operations and increasing margins," he said.

The cuts come amid an industry slump marked by layoffs in the past year at Edmonton-based Aurora Cannabis and Calgary-based SNDL.

Angela Duncan is the mayor of Alberta Beach, just south of Gunn. She said Atlas workers live throughout the surrounding region, including in her community.

She said tourism keeps the economy in Lac Ste. Anne communities stable, but creating jobs is challenging.  

"Attracting investments and business into rural Alberta is always a bit of a struggle," said Duncan.

Unreliable broadband connections and a lack of health-care coverage are scaring off businesses, she said. 

"Rural Alberta lacks a lot of social support that you would see in your large urban centres."

CBC News spoke to several former Atlas Global employees but is not identifying them because they signed a non-disclosure agreement with their former employer. 

They said they were surprised to lose their jobs and that the announcement has upended their lives. Employees say they've been asked not to return to the facility and to make an appointment if they need to collect personal belongings.

Atlas Global did not respond to a request for comment.

'The balance sheets do not look good' 

Layoffs in Gunn follow recent cannabis industry cost-cutting and job losses throughout Alberta. 

Calgary-based company SNDL, formerly Sundial Growers, announced in February it was cutting 85 jobs from its facility in Olds, Alta.

In 2022, Aurora Cannabis said it was cutting at least 12 per cent of its workforce and shutting down a facility in Edmonton. 

Kieley Beaudry, with the Alberta Cannabis Micro Licence Association, blames Alberta's regulatory environment for the industry struggles. 

"Right now, the business model where we are paying half of our revenue to government … makes it very, very difficult," she said.

Beaudry also works as a cannabis mergers and acquisition specialist, and she said she expects lean times to continue. 

"We have not yet seen the bottom," said Beaudry. "The balance sheets do not look good." 

Lower tax rates and easier access to credit are preconditions to a thriving cannabis industry, she said.

In a statement, Alberta Gaming, Liquor and Cannabis (AGLC) said cannabis is a relatively new industry in Canada and Alberta, and it will continue to evolve. 

The agency also pointed out that Alberta has 758 licensed retailers, one of the largest numbers of cannabis retailers per capita in the country, which indicates Alberta's industry is highly competitive.