Growing pains: Cannabis retailer Tweed lays off 12% of Manitoba staff

Cannabis retailer Tweed has cut 12 per cent of its Manitoba workforce in a round of layoffs the Ontario-based brand describes as a result of learning how to operate legal weed storefronts.

Tweed reduced the total staff at its three Manitoba stores from 73 to 64 over the past week, almost eight months after Canada legalized the sale and possession of recreational cannabis.

Tweed is owned by Canopy Growth Corporation, Canada's largest cannabis company, which employs approximately 3,000 people. Canopy operates two Tweed stores in Winnipeg — in Osborne Village and Transcona — and one each in Brandon, Dauphin and Portage la Prairie.

Canopy made no changes to staffing levels at four other cannabis stores it operates in Manitoba under another brand, Tokyo Smoke. The publicly traded company, which sold medical cannabis prior to recreational legalization, describes the Tweed layoffs in Manitoba as growing pains.

"This is the first time we've operated retail stores, so this is just a reflection of us learning a little bit about staffing and how much of the team is required to run the business," said Canopy vice-president Jordan Sinclair in a telephone interview.

"Now that we've got six months of experience behind us, we understand how much of the team needs to be there on a daily basis to run the store."

The provincial Liquor, Gaming and Cannabis Authority, which regulates cannabis retailers, is not concerned with staffing levels at the stores.

"We allow the market forces to operate on their own," LGCA spokesperson Lisa Hansen said.

Layoffs not a reflection of demand

Sinclair said the layoffs at Tweed do not reflect on the demand for legal cannabis in Manitoba or the way the province chose to regulate the retail weed market.

He also said the supply issues that have hampered cannabis retailers across Canada had no bearing on the layoffs, and said he's still confident in the prospects for future growth.

Competing Manitoba cannabis retailers agreed with the sunny outlook.

"If I could open another 10 stores this year, I would certainly do that," said John Arbuthnot, CEO of Delta9, which operates two Winnipeg stores and one in Brandon.

"Generally, the industry consensus seems to be there will be positive movement over the long term."

Delta9's first Winnipeg store, in St. Vital, sold $2.8 million of cannabis during the first three months of 2019 alone, said Arbuthnot, describing this sales figure as an industry-leading mark.

At the same time, he acknowledged retail-cannabis profit margins are thin. Delta9 is profitable, he said, because the company is vertically integrated — it also produces and distributes cannabis.

National Cannabis Access, which operates nine retail stores in Manitoba under the Meta brand, is also looking to expand, vice president Matt Ryan said.

The firm operates four Winnipeg stores and one each in Brandon, Thompson, Portage la Prairie, Morden and Opaskwayak Cree Nation. Ryan said he hopes the province will license five more Meta stores under what he describes as a retail-friendly regulatory model.

"I would say from our perspective, Manitoba was ahead," he said, referring to the fact other provinces were unable to allow cannabis retailers to open on the first day of legalization.

Since legalization in October, Manitoba cannabis retailers have sold 4.12 million grams of cannabis, Manitoba Liquor and Lotteries spokesperson Susan Harrison said.

That's equal to the weight of a large car — or a small elephant.