Tantalus Labs future uncertain after laying off a majority of their staff in Maple Ridge

The future of a leading company in cannabis cultivation is unknown after it laid off a majority of its employees – including those at its Maple Ridge location on Wednesday, June 28.

Tantalus Labs was a business that prided itself on producing high-quality cannabis products using sustainable cultivation methods, including pure rainwater, full spectrum light, and elite genetics. It has filed a Notice of Intent for Restructuring, (NOI), in Canadian Federal Court.

Tantalus founder Dan Sutton made the announcement “with a heavy heart” in a statement on behalf of the company.

“Notwithstanding years of advocacy with government, we have been unsuccessful in achieving excise tax reforms that would permit a business of our scale to continue to operate successfully in its current form within the Canadian cannabis industry,” he said.

Sutton said he had to lay off a substantial majority of his team, retaining only a few key employees who will be able to help with the “complexity” of the restructuring process. He would not say how many employees he had to lay off.

However, mid- 2019, Tantalus was issued a permit by the City of Maple Ridge – grudgingly – to expand their cannabis greenhouse growing facility from one to two greenhouses – an additional 50,000 square feet.

And Sutton told The News in November 2019 that Tantalus employs 100 operators in both technical and non-technical positions.

It is unclear whether the Maple Ridge location will be shuttered or remain open.

Jeff Sweetnam, owner of Spiritleaf, a privately owned cannabis retailer in Maple Ridge, said he heard about the layoffs at Tantalus after people started calling his business looking for employment in the industry.

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He said the restructuring of Tantalus will have no impact on his business overall, but it will mean they have one less local supplier for cannabis products – and, he said, part of their passion is supporting local, small, and B.C.-based businesses in the cannabis industry.

“I think it shows that Cannabis in Canada is in a very tough position – taxation and Health Canada regulations have not adjusted to the realities of the industry,” said Sweetnam.

“Many licensed producers and independent retailers across the country are shutting down or in difficult financial positions,” he said, echoing the fact that steep taxes from the government and the lack of timely review of the issues facing the industry by Health Canada and the federal government created an untenable situation for the business.

And, he added that he feels for those effected by the sudden loss of their jobs.

Many people expressed their shock at the layoffs online.

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Sutton claimed Tantalus had been successful in delivering a 45 per cent revenue growth from the first to the second quarter in 2023 – leading revenue-per-employee, and multiple category-leading products enjoying commercial success nationwide.

“Despite continued market success by firms like Tantalus, the regulatory and taxation environment is persistently so burdensome that even today, five years into recreational legalization, free cash flow in the Canadian cannabis industry remains systemically challenged,” said Sutton, adding that his company is not alone.

He said in a recent survey of 120 small cannabis cultivators across Canada, 85 per cent indicated that they believe their businesses will become insolvent over the next six months.

No company of any size has been able to consistently demonstrate a sustainable business model given an excise tax rate of 25-45 per cent of gross sales, noted Sutton.

“This is a difficult day for Tantalus employees, shareholders, and creditors, and our only consolation is the knowledge that each individual on our exceptionally talented team worked tirelessly to persist as long as we could in these challenging conditions.

“We begin this process of restructuring with the mission to find a path forward for our brand and winning products to continue to deliver value to customers and distributors nationwide,” said Sutton, encouraging any firm seeking their expert operators to reach out to talent@tantaluslabs.com for placement assistance.