Zenabis stock has reached a new bottom after Zenabis Global (TSX:ZENA) (OTCPK:ZBISF) announced 40 new layoffs in its pursuit of profitability in 2020.
Zenabis Lays Off Approximately 10% of Staff
The struggling Vancouver-based firm announced the departure of approximately 10% of its overall headcount on Tuesday as the beleaguered cannabis producer continues to search for a pathway to profitability. The layoffs will be mainly focused on the firm's Vancouver office; however, the company also has an office in New Brunswick and employed a total of 489 staff as of June 2019. The news comes following a dismal year for Zenabis stock, which has seen it collapse over 97% in the last 12 months.
Jonathan Anthony, director of corporate communications for Zenabis Global, told BNN Bloomberg, “Zenabis is completing its ramp-up phase of major financing and construction, and is now a significant cultivator of cannabis [...] Now, in 2020, Zenabis is shifting its attention to supply chain efficiency and execution. We have the right team to make Zenabis a profitable, viable long-term industry leader." Zenabis stock is currently trading for just $0.165, having traded for over $6 this time last year.
Disastrous Year for Zenabis Stock
The announcement of the layoffs comes just a few weeks into the tenure of interim CEO Kevin Coft, who replaces Andrew Grieve upon the expiry of his contract. Coft was one of the company's founders prior to its amalgamation with Bevo Agro and had served as CEO in the previous iteration of the company prior to taking interim charge of the company in early December. Eric Rasmussen was also announced as the firm's new CFO on January 3, which drove some momentum in Zenabis stock, albeit short-lived.
Zenabis Global has been faced with a litany of problems in recent weeks, which have further compounded the disastrous performance of the company in 2019. A massively disappointing Q3, which saw revenue halve to $12 million CAD, was followed by reports that one of the company's facilities failed an EU quality compliance inspection. Zenabis stock extended its fall just before Christmas when the company was forced to recall a batch of mislabeled CBD softgels.
Can the firm's reinvigorated leadership turn the fortunes of Zenabis around?
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