Curaleaf closing South Jersey grow facility amid effort to streamline operations (updated)

As part of an effort to streamline business, Curaleaf Holding Inc. plans to close one of its two cannabis grow facilities in South Jersey.

After the Massachusetts-based multistate operator (MSO) winds down cultivation at its Bellmawr location, growing operations will be consolidated at the company’s site in Winslow.

In a statement to NJBIZ, the company said, “Curaleaf is phasing out cultivation at our Bellmawr, N.J., location to meet current business needs and will utilize that location for other operations at this time. This allows us to consolidate our production of key product platforms with our Winslow facility and will streamline processes to increase output.”

The MSO, which is licensed to sell medical and recreational cannabis at its dispensaries in Edgewater Park, Bordentown and Bellmawr, says the Winslow grow facility “has the capacity to support New Jersey’s overall market demand.”

Curaleaf did not confirm how many positions would be impacted by the closure in Bellmawr but said it “values the dedication” of the team and “will work to identify other opportunities within its overall operations” for those workers.

The company also said the changes do not impact retail operations at its Bellmawr dispensary and that the storefront will continue serving both medical patients and adult-use customers.

The Bellmawr cultivation phaseout could impact as many as 40 workers, NJ Advance Media reported. According to the outlet, employees were trying to unionize with the United Food and Commercial Workers Local 360 and filed a complaint alleging that Curaleaf management had interfered with the effort three weeks ago.

The union represents hundreds of thousands of cannabis industry workers in dispensaries, labs, manufacturing, processing, delivery and grow facilities across the U.S. – including employees at Curaleaf’s Edgewater Park store.

Hugh Giordano, UFCW Local 360’s director of organizing, told NJBIZ, “The UFCW opposes any company laying off workers – it hurts the worker, their families and especially the community. The purpose of legalizing cannabis was to promote economic justice, laying off workers goes directly against that principle, especially when bragging about quarterly growth and strong balance sheets of hundreds of millions of dollars – as many companies do.”

He continued, “The UFCW believes this is not a coincidence. The workers at the Bellmawr Cultivation site wanted to unionize with the UFCW and because of what the UFCW believes to be illegal and anti-union tactics used against these cultivation workers, we have filed a complaint with the NLRB and are going through the arbitration process.”

“As far as the company wanting to find these workers jobs, the UFCW is hearing from workers within the facility that these cultivation workers are not guaranteed a job, and will have to reapply. Meaning all those years of hard work and dedication – out the door … The UFCW has also heard from worker sources that the other facilities are understaffed, which means they could guarantee all those workers jobs today!” he said.

Cutting costs

In response to slowing sales growth in some places, price compression and capital challenges, cannabis companies have been cutting operational costs—or, in some cases, leaving markets entirely.

Within the past two months, Curaleaf announced plans to exit production and cultivation facilities in California, Colorado and Oregon. Additionally, the company said it will consolidate activities in Massachusetts to a single facility, resulting in one closure.

Curaleaf, the largest publicly traded cannabis company in the world, operates in 23 states with 106 dispensaries, 23 cultivation sites and more than 30 processing sites.

“While these states have contributed to the growth of select and other Curaleaf wholesale brands, the company acknowledges the difficult operating environment in these investment states and will instead place a laser focus on cash generation in its core revenue-driving markets moving forward,” the company said in a Jan. 26 press release.

“Curaleaf began aggressive cost-cutting measures in these states in 2022 through facility closures and reductions in workforce. These adjustments were necessary for the future success and profitability of the business and were made as a result of recent legislative decisions, price compression and lack of enforcement of the illicit market,” it added. “Concurrent with these actions, the company has reduced its payroll by 10% which, when coupled with other cost savings initiatives, it expects to realize $60M in gross run-rate expense savings in 2023, exceeding its initial savings target by 50%.”

Editor’s note: This story was updated at 12:46 p.m. ET March 27, 2023, to include a statement from UFCW Local 360.