Canopy Growth sells former Smiths Falls, Ont. chocolate factory back to Hershey Canada

Hershey Canada appears to be returning to Smiths Falls, Ont.

Canopy Growth Corp. says it has entered an agreement to sell its Hershey Drive facility in the eastern Ontario community to Hershey for $53 million.

“Our intent to purchase the Hershey Drive property in Smiths Falls is another example of the strategic investments we’re making in our supply chain network and our Canadian operations to support growth,” Jason Reiman, Chief Supply Chain Officer with The Hershey Company, said in a statement.

Canopy Growth’s decision to sell the Hershey Drive facility comes months after the cannabis company announced plans to layoff 800 workers and close its 1 Hershey facility. Approximately 350 of the 800 layoffs affected the Smiths Falls area.

One Hershey was Canopy Growth’s main site for flower and edibles production, and housed office space. 

Since April 1, Canopy Growth has sold seven of its properties. The company says net proceeds from the sale of the Smiths Falls facility will be used to pay down the company’s senior secured credit facility.

“We are pleased to have reached an agreement with Hershey on this important sale. This is the latest milestone in our focused effort to reduce costs and further enhance our balance sheet,” David Klein, Chief Executive Officer of Canopy Growth, said in a statement.

“Each of the steps we have taken as part of our transformation to a simplified, asset-light operating model supports our ability to deliver in-demand products from brands our customers love, with greater agility and less execution risk.”

Canopy Growth says it will retain its Smiths Falls-based post-harvest manufacturing facility.

In 2013, Tweed Inc. set up its corporate headquarters in the abandoned Hershey’s chocolate factory in Smiths Falls. In 2015, Tweed was renamed Canopy Growth after a merger with Bedrocan Canada.

Hershey Canada announced in 2007 it would phase out production of its products at the Smiths Falls plant, eliminating hundreds of jobs.

A spokesperson for The Hershey Company confirms to CTV News Ottawa that it has signed an agreement to purchase the 700,000 sq. ft. facility, but said it is premature to discuss plans for the future.

“This project is a strategic acquisition and is another step in our continuing investment in our supply chain network to enable our leading snacking powerhouse vision,” Todd Scott, Hershey’s senior communications manager, said in an email.

“The facility provides us with the flexibility to support growth across the CMG portfolio.”

Hershey Canada’s headquarters are located in Mississauga, Ont. The company has plants in Saint-Hyacinthe and Granby, Que.

With files from The Canadian Press