As reported by the Israeli Cannabis Magazine
Dozens of employees of the long-standing cannabis company Tikun Olam will be laid off after the company decided to close the cultivation activity on its two farms in Kfar Yehoshua and in Benaot HaKar. The layoffs come against the background of very difficult results in the annual reports that showed a loss of approximately NIS 35m (£7.7m) per year
The first cannabis company in Israel, which has been growing cannabis since the beginning of the 2000s, decided to reduce loss-making activities and become a sort of marketing brand only, marketing goods produced in satellite farms of third parties.
Tikun Olam will stop growing cannabis altogether and close its two failed cultivation farms, which were unable to produce quality goods despite tens of millions of shekels being invested in them.
As part of the attempt to reduce loss-making activity, Tikun Olam will lay off dozens of the company’s employees, including of course the farm workers, but also management staff and some veteran employees.
The company will continue, at least for the time being, to operate its pharmacy in Tel Aviv and its packaging plant in Aza’et Tziporit in the north of the country, but there will likely be cuts there as well in order to try to stop the losses.
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This decision comes after the company’s announcement of its intention to merge with another veteran cannabis company, Ball Pharma, which also recently announced the cessation of cultivation activities and its intention to sell or close its plant.
As a reminder, it was recently revealed in the annual reports of the company that it lost about NIS 35m a year, after the previous year it lost about NIS 33.2m . In total, the company’s stock has fallen by about 84% within a year.
Despite the huge amounts of cash flowing through the company, some of which were wasted on excessive salaries for the company’s managers, including former Teva Israel CEO Avinoam Sapir, the company ultimately failed.
The intention to close the cultivation activity has been known in the industry and to Israel Cannabis Magazine for about three months or more, but the company’s managers denied it in response to various inquiries and even claimed that these were lies. Now it turns out that they were true.
To the company’s credit, it is not the only one that failed. In fact, the majority of the annual reports of the cannabis companies on the stock exchange were not good, to say the least, and apart from Intercure and Seach, none reported a net profit.