John Schroyer
Canadian marijuana cultivation firm Tantalus Labs laid off a majority of its workforce and filed a formal notice in federal court of its intent to restructure, according to several media reports.
Company founder Dan Sutton announced Wednesday that he had had to lay off a “substantial majority” of staffers from the British Columbia-based greenhouse cultivation business, which was founded in 2018. He said the regulatory and tax system in the nation was to blame for Tantalus’ and many other companies problems, StratCann reported.
“Despite continued market success by firms like Tantalus, the regulatory and taxation environment is persistently so burdensome that even today, five years into recreational legalization, free cash flow in the Canadian cannabis industry remains systemically challenged,” Sutton said.
Sutton added that a “recent survey” of 120 licensed cannabis farmers found that 85% expect to be insolvent this year for the same systemic reasons.
“No company of any size has been able to consistently demonstrate a sustainable business model given an excise tax rate of 25%-45% of gross sales,” Sutton said.
Sutton said that a handful of core employees that were vital to the restructuring process were kept on the payroll, and that the brand hopes to “find a path forward.”
Tantalus is the latest Canadian cannabis company to struggle, StratCann noted. Fire & Flower also filed in court for creditor protection, and Quebec-based Navaya Inc. filed a notice of intent in May to restructure with $34.7 million in liabilities. And Phoena Holdings, formerly known as CannTrust, announced in April that it was ceasing operations altogether.
