SNDL Inc. is consolidating all cultivation activities to its facility in Atholville, New Brunswick as part of an effort to enhance “competitiveness and profitability” of its cannabis operations, the company announced Thursday. 

The move follows the centralization of SNDL's manufacturing, processing and production operations to Kelowna, British Columbia.

"In the past year, we've transformed our facility footprint with a clear goal of achieving profitability in our cannabis operations by 2024," said Tyler Robson, SNDL president, cannabis. "As a result, we have taken the difficult but necessary steps to simplify operations throughout our business, which includes the closure of our Olds, Alberta facility. Through our facility reorganization, we expect to capture increased margins from more sustainable fixed operating costs and leverage strategic procurement opportunities to achieve material cost reductions. This initiative reinforces SNDL's commitment to long-term sustainable cash flow through streamlined manufacturing operations and reduced reliance on high-cost cultivation, ensuring we deliver on both our customer and shareholder promise."

SNDL expects optimizing its facility footprint to result in over $10 million in annual savings through a reduction in fixed overhead, power costs and labor efficiencies. These cost savings are in addition to the previously announced $18.2 million of annualized cost savings since the acquisition of The Valens Company Inc. on Jan. 17. 

In connection with the Olds facility closing, SNDL expects to record any related non-cash impairment charges during the fourth quarter of 2023.

The Atholville facility will continue to focus on cultivation, research and development, and supply chain efficiencies, with an aim to realize additional cost savings while ensuring no disruptions to the availability of SNDL's current product portfolio. In line with this strategic transition, SNDL expects to expand its operations in Atholville.