Canadian cannabis giant Canopy Growth on Wednesday said it was closing five production sites and laying off some 220 workers in an attempt to improve profit margins.

Canopy Growth, number one in the industry in a country where pot has been legal since late 2018, recently announced that it was seeking to cut costs by around CAN$150-200 million (US$117-156 million) to accelerate "our path to profitability," the company said in a statement.

Operations will cease at greenhouses in the provinces of Newfoundland, New Brunswick, Alberta and Ontario, as well as outdoor cannabis growing operations in Saskatchewan, the company said.

These greenhouses represent 17 percent of the company's total indoor cannabis production, while the outdoor site was Canopy's only one in Canada.

"We are confident that our remaining sites will be able to produce the quantity and quality of cannabis required to meet current and future demand," said Canopy Growth CEO David Klein.

In Canada, cannabis sales have been legal since late 2018
In Canada, cannabis sales have been legal since late 2018 AFP / Chris Roussakis

The decision by the company -- which is 51 percent owned by US alcoholic beverage group Constellation Brands and has a market capitalization of CAN$13 billion -- was poorly received by investors.

On the Toronto stock exchange Canopy shares closed the session down five percent, ending at CAN$34.91.

Canada was the second nation, after Uruguay in 2013, to legalize the recreational use of cannabis.

Canadian cannabis sales soared at the start of the coronavirus pandemic in March.

However the spike in sales was not enough of a boost for a young industry in trouble and still struggling to reach profitability.

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