Lift & Co. offloading assets as COVID-19 shakes the cannabis sector

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Lift’s struggles are in part a reflection of the cannabis sector as a whole, which, now in its second year of legalization in Canada, has failed to meet investors’ expectations. “Leading up to (the pandemic), the cannabis industry was facing quite a lot of headwinds,” said Rishi Malkani, lead partner of Deloitte Canada’s cannabis division. “You had seen difficulty accessing capital, there were supply challenges … there was difficulty distributing (supply). You had a lot of management turning over and founders shown the door.”

Lack of available capital is what’s creating pressure on already precarious companies

Companies in the sector laid off some 600 employees in the last few months of 2019, according to a job tracker of the industry by Business Insider; that number has soared during COVID-19, with over 3,100 layoffs as of June 3. “The legal cannabis industry is new. They’re still figuring out how to operate,” said Malkani. “And then (COVID-19) comes around and throws a whole other wrench into the industry.”

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